S.A. No. 4 of 2004. Case: Cybaba's Netscripts Ltd. and Anr. Vs Mahesh Sahakari Bank Ltd. and Ors.. Mumbai Debt Recovery Tribunals

Case Number:S.A. No. 4 of 2004
Party Name:Cybaba's Netscripts Ltd. and Anr. Vs Mahesh Sahakari Bank Ltd. and Ors.
Counsel:For Appellant: Rishabh Shah, Adv., i/b., T.N. Tripathi, Adv. and For Respondents: Satish Shetye and Utangale, Advs., i/b., Utangale and Co.
Judges:K.J. Paratwar, Presiding Officer
Issue:Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2) and 17(1); Security Interest (Enforcement) Rules, 2002 - Rules 8(5), 9(2) and 9(5); Income Tax Rules - Rule 61
Citation:IV (2005) BC 241
Judgement Date:April 15, 2005
Court:Mumbai Debt Recovery Tribunals
 
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Judgment:

K.J. Paratwar, Presiding Officer

  1. This appeal under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "SRFAESI Act") pertains to Office Premises Nos. 201 to 208 on second floor, Kimatrai Building, 77/79, Maharshi Karve Road, Mumbai-400002.

  2. The appellants and respondent Nos. 4 and 5 are co-owners of the properties.

  3. The appellants had impugned notice dated 26th February, 2004 under Section 13(2) of the SARFAESI Act and also action of taking possession of the property hereunder. During the course of arguments, said issue is not pressed into service obviously because of limitation and because the respondent Bank produced record showing that the appellants themselves had handed over peaceful and vacant possession of the office premises. However, second part of the Appeal viz. challenge to the auction and acceptance and confirmation of the sale survives in this matter. The only ground is that the respondent Bank had fixed reserved bid at Rs. 1,43,29,000/- but sold the property for Rs. 1,01,15,000/- to the respondent No. 3. Thus, the sale was for much less amount than the reserve bid but without obtaining consent of the Borrower as contemplated by Rule 9(2) of the Security Interest (Enforcement) Rules, 2002.

  4. The respondent Nos. 1/2 by reply at Exh. 9 have controverted the above contention by submitting that the highest offer received was for Rs. 1,01,15,000/-. The respondent Nos. 1/2 accepted the offer and also issued Sale Certificate during the pendency of the appeal and have also executed registered Sale Deed.

  5. I have heard the arguments of the learned Counsel representing the rival parties. I have also gone through the record as is relevant for disposal of the appeal. The learned Counsel for the respondent has placed on record Written Submissions (Exh. 13).

  6. In the beginning the question of limitation has been raised by Mr. Shetye. The learned Counsel has submitted that this being a scale in execution, provision of Rule 61 of Income Tax Rules would apply. The relevant provisions further provides for deposit of the amount for challenging the sale and also require challenge to be made within 30 days. In my view, this is not sound argument since the sale by authorised officer under SRFAESI Act cannot be said to be in the execution. The sale is under special legislation i.e. SRFAESI Act and should accordingly be done in accordance with...

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