S. KARTHIK & ORS. versus N. SUBHASH CHAND JAIN & ORS.

S. KARTHIK & ORS. versus N. SUBHASH CHAND JAIN & ORS.

The Second Sale Notice dated 9.7.2012 was a continuation of the First Sale Notice dated 21.1.2012, and because the sale scheduled on 27.2.2012 under the First Sale Notice could not proceed solely due to interim orders obtained on the appellants' representations, there was no requirement to issue a fresh 30 days' clear notice before the sale on 20.7.2012; the sale having been confirmed and registered (sale certificate registered on 14.9.2012) extinguished the mortgagors' right of redemption; the DRAT correctly reversed the DRT insofar as setting aside the sale and imposition of costs, and the High Court rightly upheld DRAT; appeals are dismissed but orders for refund of surplus Rs.4.48...

Parties
Appellants: S. Karthik & Ors.; Respondent/auction Purchaser: N. Subhash Chand Jain; Respondent Bank: Indian Overseas Bank; Respondent No.3/mortgagor: Shanthi Sivasamy; Borrower: Ace Concrete Private Limited
Jurisdiction
India
Judgment Date
23 September 2021
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court (civil Appeal Nos. 5920 5923 of 2021)
Outcome
Appeals dismissed
Legal Topics
Enforcement of Security Interest Under Section 13 SARFAESI Act, Notice and Sale Procedure Under Rules 8 and 9 of the SARFAESI Rules, 2002, Right of Redemption and Extinguishment on Registration of Sale Certificate, Remedies Under Article 142 of the Constitution
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Banking and Finance Debt Recovery Enforcement of Security Interest Under Section 13 SARFAESI Act Notice and Sale Procedure Under Rules 8 and 9 of the SARFAESI Rules, 2002 Right of Redemption and Extinguishment on Registration of Sale Certificate Remedies Under Article 142 of the Constitution

Case Brief

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Parties

S. Karthik & Ors.

Appellants

N. Subhash Chand Jain

Respondent/auction Purchaser

Indian Overseas Bank

Respondent Bank

Shanthi Sivasamy

Respondent No.3/mortgagor

Ace Concrete Private Limited

Borrower

Procedural Posture

Civil Appeal / Judgment on Appeal From High Court (civil Appeal Nos. 5920 5923 of 2021)

Legal Issues

  1. 1 Whether the Second Sale Notice dated 9.7.2012 (sale on 20.7.2012) was invalid for failing to give a clear 30 days notice as required by Rules 8(6) and 9(1) of the SARFAESI Rules
  2. 2 Whether the Second Sale Notice was a fresh notice or a continuation of the First Sale Notice dated 21.1.2012
  3. 3 Whether the sale confirmed in favour of the auction purchaser is sustainable and whether the mortgagors' right of redemption was extinguished

Ratio Decidendi

The Second Sale Notice dated 9.7.2012 was a continuation of the First Sale Notice dated 21.1.2012, and because the sale scheduled on 27.2.2012 under the First Sale Notice could not proceed solely due to interim orders obtained on the appellants' representations, there was no requirement to issue a fresh 30 days' clear notice before the sale on 20.7.2012; the sale having been confirmed and registered (sale certificate registered on 14.9.2012) extinguished the mortgagors' right of redemption; the DRAT correctly reversed the DRT insofar as setting aside the sale and imposition of costs, and the High Court rightly upheld DRAT; appeals are dismissed but orders for refund of surplus Rs.4.48...

Court Disposition

Appeals dismissed

Orders

  • Appeals dismissed with costs
  • Appellants to pay costs of Rs.1,00,000 each to the Respondent Bank and to the auction purchaser