IN THE HIGH COURT OF JUDICATURE AT HYDERABAD

FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH

*****
Writ Petition No.20729 of 2018

Between

1. M/s. Concern Readymix, rep. by its Proprietor, Smt. Y. Sunitha

Reddy, Shri Y. Santhosh Reddy, R/o. H.No.14-13, Malkajgiri,
Hyderabad, Telangana; and another
… Petitioners
and

1. The Authorised Officer, Corporation Bank, Zonal Office,

5-9-88/18/88/2, 1st floor, Saphire Complex, Chappel Road,
Hyderabad, Telangana; and another
… Respondents

DATE OF JUDGMENT PRONOUNCED: 31-12-2018

HONOURABLE SRI JUSTICE V.RAMASUBRAMANIAN

AND
HONOURABLE MS. JUSTICE J.UMA DEVI

1 Whether Reporters of Local newspapers Yes/No

may be allowed to see the Judgments?
2 Whether the copies of judgment may be Yes/No
marked to Law Reports/Journals
3 Whether Their Ladyship/Lordship wish to Yes/No
see the fair copy of the Judgment?
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VRS, J. & JUD, J.
wp_20729_2018

*IN THE HIGH COURT OF JUDICATURE AT HYDERABAD

FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA
PRADESH

*HONOURABLE SRI JUSTICE V.RAMASUBRAMANIAN

AND
*HONOURABLE MS. JUSTICE J.UMA DEVI

+WRIT PETITION NO.20729 OF 2018

% Date: 31-12-2018

# BETWEEN:

1. M/s. Concern Readymix, rep. by its Proprietor, Smt. Y. Sunitha

Reddy, Shri Y. Santhosh Reddy, R/o. H.No.14-13, Malkajgiri,
Hyderabad, Telangana.

2. Smt. Y. Sunitha Reddy, W/o. Shri Y. Santhosh Reddy,

R/o. H.No.14-13, Malkajgiri, Hyderabad, Telangana.
… Petitioners
Vs.

2. The Authorised Officer, Corporation Bank, Zonal Office,

5-9-88/18/88/2, 1st floor, Saphire Complex, Chappel Road,
Hyderabad, Telangana.

3. Shri Katam Shyam Kishore, S/o. Late Ashirvadham,

R/o. Flat No.201, H.No.6-3-562/10, Erramanzil Colony,
Khairatabad, Hydrerabad – 82, Telangana.
… Respondents

!Counsel for the Petitioners : Mr. C.B. Ram Mohan Reddy

^Counsel for Respondent No.1 : Mr. Vedula Venkataramana Sr. counsel

Representing Mrs. V. Dyumani

^Counsel for Respondent No.2 : Mr. Aadesh Varma

<GIST:

> HEAD NOTE:

? Cases referred:
1. AIR 2014 SC 1710
2. (2017) 4 SCC 735
3. (2014) 5 SCC 610
4. 2018 Law Suit (SC) 232
5. 2018(9) MDSC 18
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VRS, J. & JUD, J.
wp_20729_2018

HONOURABLE SRI JUSTICE V.RAMASUBRAMANIAN

AND
HONOURABLE Ms JUSTICE J.UMA DEVI

WRIT PETITION NO.20729 OF 2018

ORDER: (per VRS,J.)

Challenging the dismissal of an appeal filed by them under Section

17 of the SARFAESI Act, 2002, the borrower and the guarantor have come

up with the above writ petition.

2. We have heard Mr. C.B. Ram Mohan Reddy, learned counsel for

the petitioners, Mr. Vedula Venkata Ramana, learned Senior Counsel

appearing for the 1st respondent-bank and Mr. Aadesh Varma, learned

counsel appearing for the 2nd respondent.

3. The case on hand has a checkered history, as can be seen from

the following:

a) The 1st petitioner was sanctioned a term loan, way-back in May

2011, for the establishment of a Readymix Concrete Unit. He was also

sanctioned a cash credit limit.

b) The 1st petitioner committed default in repayment and the

account was classified as NPA on 31.10.2016.

c) Therefore, a demand notice dated 07.11.2016 was issued under

Section 13(2). A possession notice was issued on 24.03.2017.

d) Thereafter, a sale notice under Rule 8(6) was issued on

10.07.2017. It was actually a notice under Rule 8(6) as well as notice

under Rule 9(1). However, the date of auction was fixed as 18.08.2017,

which was beyond 30 days of the date of the notice.

e) Since the auction failed, a fresh notice dated 23.08.2017 was

issued fixing the date of auction as 15.09.2017. Since the same also
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VRS, J. & JUD, J.
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failed, a fresh notice dated 21.09.2017 was issued fixing the date of

auction as 12.10.2017.

f) The third auction also failed forcing the Bank to issue a 4th notice

dated 23.10.2017 fixing the date of auction as 16.11.2017. The same also

failed and hence a 5th notice was issued on 20.11.2017 fixing the auction

on 21.12.2017.

g) The same also failed forcing the Bank to issue a 6th notice on

12.12.2017. The same also failed forcing the Bank to issue a 7th notice on

29.12.2017 fixing the auction on 19.01.2018.

h) Fortunately for the Bank, the auction was successful on

19.01.2018 and the 2nd respondent became the highest bidder for a sum

of Rs.3,10,38,000/-.

i) Immediately, the petitioners approached the Debts Recovery

Tribunal by way of an appeal under Section 17 of the SARFAESI Act, 2002

in S.A.No.30 of 2018. But before any interim order could be passed by the

Debts Recovery Tribunal, a sale certificate was issued by the Bank in

favour of the 2nd respondent on 05.02.2018. Therefore, the Debts

Recovery Tribunal passed a limited interim order on 05.02.2018 directing

the 2nd respondent not to create any third party interest.

g) Eventually, the appeal filed by the petitioners in S.A.No.30 of

2018 was renumbered as S.A.No.159 of 2018 and after hearing both

parties, the Debts Recovery Tribunal dismissed the appeal by a considered

order dated 08.06.2018. As against the said order, the petitioners have an

effective alternative remedy of appeal to the Debts Recovery Appellate

Tribunal, but the petitioners have chosen to come up with the above writ

petition, by-passing the alternative remedy.

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VRS, J. & JUD, J.
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4. The auction sale was challenged by the petitioners before the

Tribunal, on three substantial grounds, viz., – (1) that after the

amendment to Section 13(8) of the SARFAESI Act, 2002, by the

Amendment Act No.44/2016 w.e.f. 01.09.2016, the Authorized Officer was

required to give 30 days time from the date of issue of notice under Rule

8(6) before the issue of the sale notice under Rule 9(1), but the 1st

respondent issued a single notice under both the rules thereby violating

the mandate of law; (2) that the property brought to sale was admittedly

an agricultural land and hence Section 31(i) of the Act was attracted; and

(3) that though the valuation report taken by the bank way-back in May

2011 showed the market value at Rs.4,62,50,000/- and the valuation

report dated 20.05.2017 showed the market value at Rs.6,80,43,555/-,

the Bank fixed the reserve price at Rs.3,09,38,000/- thereby violating the

law laid down by the Supreme Court in J. Rajiv Subrahmaniyam v.

Pandiyas1.

5. The Tribunal rejected the first contention on the basis of the

judgment of the Supreme Court in Canara Bank v. M. Amarender

Reddy2. The second contention was rejected by the Tribunal on the basis

of an affidavit of the second petitioner himself, submitted at the time of

sanction of the loan, that the property was not being used any more as

agricultural land and that he will have no objection for proceeding against

the property under the SARFAESI Act, 2002. The third contention was

rejected on the ground that the Bank had obtained a fresh valuation.

6. In other words, all the three contentions raised by the

petitioners to the auction sale, were dealt with by the Tribunal and were

rejected for reasons recorded. Once it is found that a quasi judicial

1
AIR 2014 SC 1710
2
(2017) 4 SCC 735
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VRS, J. & JUD, J.
wp_20729_2018

Tribunal created under a special enactment has considered all the issues

and arrived at a conclusion for reasons recorded in the order, the role of

this Court in writ jurisdiction is extremely circumscribed. It must be

remembered that the jurisdiction under Article 226 is a supervisory

jurisdiction, to keep the Tribunals and other authorities within their

bounds. We are not exercising an appellate jurisdiction over the orders of

the Tribunal. We do not find any perversity in the findings of the Tribunal.

The legal and factual issues raised by the petitioners have been properly

addressed to by the Tribunal. Therefore, even in extreme cases where we

may be persuaded to take a different view, we would not.

7. Despite the above restrictions on the scope of our jurisdiction

under Article 226, we shall nevertheless deal with all the three contentions

raised by the petitioners.

8. The first contention revolves around the non-availability of a gap

of 30 days between the date of issue of notice under Rule 8(6) and the

sale notice under Rule 9(1). Though certain decisions of this Court and of

the Supreme Court are relied upon by Mr. C.B. Ram Mohan Reddy,

learned counsel for the petitioners, we shall first take note of the statutory

provisions before considering the precedents.

9. Sweeping changes were made to the SARFAESI Act, 2002 by the

Enforcement of Security Interest and Recovery of Debts laws and

Miscellaneous Provisions (Amendment) Act, 2016 (Act No.44 of 2016).

Sub-section (8) of Section 13 was substituted by a new sub-section under

this Amendment Act. Actually there are no substantial differences between

the unamended sub-section (8) and amended sub-section (8). This can be

appreciated if we present sub-section (8) as it stood before the

amendment and sub-section (8) as it stands today, in a tabular column.

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VRS, J. & JUD, J.
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Section 13(8) Section 13(8) after amendment

before amendment by Act No.44 of 2016

(8) If the dues of the secured creditor (8) Where the amount of dues of the
together with all costs, charges and secured creditor together with all costs,
expenses incurred by him are tendered charges and expenses incurred by him
to the secured creditor at any time is tendered to the secured creditor at
before the date fixed for sale or any time before the date of publication
transfer, the secured asset shall not be of notice for public auction or inviting
sold or transferred by the secured quotations or tender from public or
creditor, and no further step shall be private treaty for transfer by way of
taken by him for transfer or sale of lease, assignment or sale of the
that secured asset. secured assets,—
(i) the secured assets shall not be
transferred by way of lease assignment
or sale by the secured creditor; and
(ii) in case, any step has been taken by
the secured creditor for transfer by
way of lease or assignment or sale of
the assets before tendering of such
amount under this sub-section, no
further step shall be taken by such
secured creditor for transfer by way of
lease or assignment or sale of such
secured assets."

10. The first distinction between the unamended and amended

sub-section (8) of Section 13 is that before amendment, the facility of

repayment of the entire dues along with the costs, charges and expenses,

was available to the debtor at any time before the date fixed for the sale

or transfer. But after the amendment, the facility is available upto the

time before the date of publication of notice for public auction or inviting

quotations or tender from public or private treaty. The second distinction

is that the unamended sub-section (8) did not provide for the contingency

when the dues are tendered by the borrower before the date of

completion of the sale or lease but after the issue of notice. But the
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VRS, J. & JUD, J.
wp_20729_2018

amended sub-section (8) takes care of the contingency where steps have

already been taken by the secured creditor for the transfer of the secured

asset, before the payment was made. Except these two distinctions, there

is no other distinction.

11. Coming to the Rules, Rule 8(6) did not undergo any change

under GSR No.1046E, dated 03-11-2016, though certain amendments

were made with effect from 04-11-2016 to the Rules, after the

amendment of the Act under Act 44/2016. However, Rule 9(1) underwent

a change under GSR No.1046E, dated 03-11-2016. The effect of the

changes to Rule 9(1) can be best understood if we present the Rule

before and after amendment in a tabular column as follows:

Rule 9(1) before amendment Rule 9(1) after amendment

No sale of immoveable property under No sale of immoveable property under
these Rules shall take place before the these Rules, in first instance shall
expiry of 30 days from the date on take place before the expiry of 30 days
which the public notice of sale is from the date on which the public
published in Newspapers as referred to notice of sale is published in
in the proviso to sub-rule (6) or notice Newspapers as referred to in the
of sale has been served to the proviso to sub-rule (6) of Rule 8 or
borrower. notice of sale has been served to the
borrower.
Provided, further that if sale of
immoveable property by anyone of the
methods specified by sub-rule (5) of
Rule 8 fails and sale is required to be
conducted again, the Authorised
Officer shall serve, affix and publish
notice of sale of not less than 15 days
to the borrower, for any subsequent
sale.

12. Two important amendments have been made to Rule 9(1) by

the amendment with effect from 04-11-2016. They are: (i) the words

“in first instance” have been inserted in the main part of sub-rule (1)

and (ii) a proviso is inserted to make it clear that after the failure of the

first attempt, notice of sale for subsequent attempts shall be of a lesser

duration.
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VRS, J. & JUD, J.
wp_20729_2018

13. What is important to note both from the amended and

unamended provisions of Section 13(8) and Rule 9(1) is that

both of them do not speak in express terms, about the equity of

redemption available to the mortgagor. The amended Section 13(8)

merely prohibits the secured creditor from proceeding further with the

transfer of the secured assets by way of lease, assignment or sale. A

restriction on the right of the mortgagee to deal with the

property is not exactly the same as the equity of redemption

available to the mortgagor. The payment of the amounts

mentioned in Section 13(8) ties the hands of the mortgagee

(secured creditor) from exercising any of the powers conferred

under the Securitisation Act, 2002. Redemption comes later. But

unfortunately, some Courts, on a wrong reading of the decision of the

Supreme Court in Mathew Varghese v. M.Amritha Kumar3, have

come to the conclusion as though Section 13(8) speaks about the right of

redemption. The danger of interpreting Section 13(8) as though it

relates to the right of redemption, is that if payments are not

made as per Section 13(8), the right of redemption may get lost

even before the sale is complete in all respects. But in law it is not.

It may be seen from paragraphs-34 to 36 of the decision of the Supreme

Court in Mathew Varghese that the Supreme Court took note of Section

60 of the Transfer of Property Act and the combined effect of Section

54 of the Transfer of Property Act and Section 17 of the

Registration Act to come to the conclusion that the extinction of

the right of redemption comes much later than the sale notice.

Therefore, we should first understand that the right of redemption is not

3
(2014) 5 SCC 610
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VRS, J. & JUD, J.
wp_20729_2018

lost immediately upon the highest bid made by a purchaser in an auction

being accepted.

14. Perhaps the Courts were tempted to think that Section 13(8)

speaks about redemption, only on account of what is found in Rule 3(5) of

the Security Interest (Enforcement) Rules, 2002. Rule 3(5) inserted by

way of amendment with effect from 04-11-2016 states that the demand

notice issued under Section 13(2) should invite the attention of the

borrower to the provisions of Section 13(8), in respect of the time

available to the borrower to redeem the secured assets. Today, it may

be convenient for one borrower to contend that the right of

redemption will be lost immediately upon the issue of notice

under Rule 9(1). But if it is held so, the same would tantamount

to annulling the relevant provisions of the Transfer of Property

Act, which do not stand expressly excluded, insofar as the

question of redemption is concerned.

15. Keeping the above distinction in mind, if we come back to the

contention with regard to the notice period of 30 days between the

publication under Rule 8(6) and the sale under Rule 9(1), it may be seen

that the Rules do not contemplate two different notices, one under

Rule 8(6) and another under Rule 9(1). We have already extracted both

the Rules. Rule 8(6) mandates – (i) the service of a notice of sale on the

borrower, (ii) publication of a public notice in two leading Newspapers, of

which one should be in vernacular language and (iii) affixture of the notice

of sale on a conspicuous part of the immoveable property. This is in

addition to the option available to the Authorised Officer under Rule 8(7)

to put the notice on the website of the secured creditor.

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VRS, J. & JUD, J.
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16. All that Rule 9(1) says is that no sale of immoveable property in

the first instance shall take place before the expiry of 30 days from the

date on which the public notice of sale is published in the Newspapers as

referred to in the proviso to sub-rule (6) of Rule 8 or notice of sale has

been served to the borrower.

17. Rule 9(1) does not stipulate a separate notice to be

published. This Rule merely makes a reference to the notice of

sale served on the borrower. The words “notice of sale has been

served to the borrower” appearing towards the end of the main

part of sub-rule (1) of Rule 9, cannot be construed as one more

notice of sale, apart from the notice of sale to be served on the

borrower under Rule 8(6). If this is so construed, then the

borrower should have 60 days time, with the first 30 days

following the notice of sale under Rule 8(6) and the second

period of 30 days following the notice under Rule 9(1). In fact, the

proviso to sub-rule (1) of Rule 9 steers clear of any doubt. The proviso

speaks about the failure of the first attempt of the secured creditor. Once

the secured creditor fails in his first attempt, then the Authorised Officer

should “serve, affix and publish notice of sale of not less than 15

days to the borrower, for any subsequent sale”.

18. Therefore, the number of notices of sale required to be

issued actually depend upon the number of times the property is

put to sale. If Rule 9(1) is construed in such a manner as to

oblige a secured creditor to issue one more notice apart from the

notice under Rule 8(6), the first sale will be preceded by 2

notices and the subsequent sales will be preceded by one notice

each. The correct way of looking at the rules is to say that in respect of
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VRS, J. & JUD, J.
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the first auction, there has to be only one notice under

Rule 8(6). But the date of the auction should fall beyond 30 days from the

date of publication of sale. If no sale takes place on the first occasion,

a second notice is mandated only under the proviso to sub-rule (1) of

Rule 9 and this second notice shall be of a duration of 15 days. If the

second attempt also fails, a third notice may be issued under the proviso

to sub-rule (1) of Rule 9, of a duration of not less than 15 days for the

third auction.

19. We think that some Courts have been tempted to think that

Rule 9(1) requires another notice of sale in addition to the notice of sale

served on the borrower under Rule 8(6), due to a mix up. This can be

appreciated if we again have a look at Rule 9(1) once more:

“9(1). No sale of immovable property under these rules shall take

place before the expiry of thirty days from the date on which the
public notice of sale is published in newspapers as referred to in
the proviso to sub-rule (6) or notice of sale has been served to
the borrower.”

20. What is shown in bold, italics and underlined in Rule 9(1)

extracted above, should have come towards the end of Rule 9(1),

especially without the words “the proviso to”. If it had come towards the

end, without the words “the proviso to”, no confusion would have arisen,

about whether a second notice of sale is necessary under Rule 9(1). If the

words in bold, italics and underlined, appear towards the end of the Rule

9(1) without the words “the proviso to”, the rule will actually read as

follows:

“9(1). No sale of immovable property under these rules shall

take place before the expiry of thirty days from the date on which
the public notice of sale is published in newspapers or notice of
sale has been served to the borrower as referred to in sub-rule
(6).”
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VRS, J. & JUD, J.
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21. It may be seen from Rule 8(6) that the main part of the

sub-rule speaks about service of notice of 30 days to the borrower.

The proviso to sub-rule (6) of Rule 8 speaks about the publication of

notices in Newspapers. Since Rule 9(1) makes a reference to the proviso

to Rule 8(6), in the context of public notice and also since there is no

reference to Rule 8(6) in Rule 9(1) (except with reference to the proviso)

when it speaks about notice of sale served to the borrower, Courts have

come to think that two notices are required to be served on the borrower,

one under Rule 8(6) and another under Rule 9(1).

22. In fact, the disjunction between – (i) a public notice of sale as

referred to in the proviso to sub-rule (6) of Rule 8 and (ii) a notice of sale

served to the borrower, maintained in Rule 9(1) by the use of the word

“or”, was explained in Mathew Varghese by the Supreme Court.

In paragraph-31 of the report, the Supreme Court held in Mathew

Varghese that this disjunction should be read as a conjunction.

The Court said that the word “or” should be read as “and”.

23. The moment the word “or” appearing in Rule 9(1) is read as

“and”, there is no scope for concluding that Rule 9(1) requires one more

notice to be served to the borrower, in addition to the notice served to the

borrower under Rule 8(6).

24. Though the rule position is as clear as crystal on the

above aspect, we do not wish in the present case to take an

adventurous path, as the same may fall foul of judicial discipline

without a reference to a Larger Bench. For the purpose of this

case, let us proceed on the footing that a second notice is

required under Rule 9(1) in addition to the notice under Rule

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VRS, J. & JUD, J.
wp_20729_2018

8(6). Even then the petitioner in this case will not pass the muster. As we

have pointed out earlier, the Bank made as many attempts, little less than

the number of attempts made by Ghazni Muhammad. Every time an

auction failed, the Bank served a fresh notice on the borrower and these

notices were clearly of a duration not less than the one prescribed in the

proviso to Rule 9(1). This can be demonstrated by the dates of notices

and dates of sale in a tabular column:

S.No. E-Auction Notice Date of Sale

1. 10-7-2017 18-8-2017 (Auction failed)
2. 23-8-2017 15-9-2017 (Auction failed)
3. 21-9-2017 12-10-2017 (Auction failed)
4. 23-10-2017 16-11-2017 (Auction failed)
5. 20-11-2017 11-12-2017 (Auction failed)
6. 12-12-2017 28-12-2017 (Auction failed)
7. 29-12-2017 19-01-2018

25. While the main part of Rule 9(1) is focussed on the sale “in the

first instance” the proviso focuses on subsequent sales. Therefore,

assuming that there was no compliance of the prescription

requiring a second notice under Rule 9(1), the same was more

than compensated by 6 subsequent notices of sufficient duration.

26. The theme of the song of almost all the borrowers, relying

upon the decision in Mathew Varghese is that if the notice of sale is of

a duration of less than 30 days, the right of redemption is lost (though it

is not). In other words, the borrowers request the Court to

presume that they are honest enough to discharge all the dues, if

only 30 days notice had been granted. In this case, the petitioner

has had 7 notices and the sale actually materialised only after 5

months of the date of first auction. After the date of first auction,

another period of 11 months have passed. Except Case Law, the bank

was unable to recover anything from the borrower. Therefore, it is

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VRS, J. & JUD, J.
wp_20729_2018

not open to the petitioner to wave the magic wand of Mathew

Varghese.

27. In any case, the first argument of the learned counsel for the

petitioner is about the failure of the Bank to issue a notice under Rule

9(1). If the petitioner was serious about this contention, he should have

come up with a writ petition or gone before the Debts Recovery Tribunal

by way of appeal challenging the first notice of sale dated 10-7-2017. The

petitioner did not challenge the first notice of sale. He did not challenge

even the subsequent 6 notices of sale. He came to Court only after the

sale was effected on the 7th occasion. Therefore, a person who took

advantage of the failure of 6 auctions, cannot come to Court after the

completion of a successful auction on the 7th occasion, complaining that

the first auction was defective. The impugned sale did not take place

pursuant to the first auction notice, but took place pursuant to the 7th

notice. Therefore, the defect, even if any, in the first notice, got wiped

out. Hence, the first contention deserves to be rejected.

28. The second contention is that the mortgaged property is

an agricultural land and that therefore Section 31(i) of the Securitisation

Act, 2002, prohibits the invocation of the provisions of the Act, for the

enforcement of security interest in an agricultural land. Reliance is placed

upon the decisions of the Supreme Court in ITC Ltd. v. Blue Coast

Hotels Ltd.4 and Indian Bank v. K.Pappireddiyar5. The petitioner has

also come up with lot of additional documents such as the report of the

Tahsildar of Kapra Mandal, a series of receipts for the purchase of seeds

and fertilisers and purchase invoices, not only to show that the property in

4
2018 Law Suit (SC) 232
5
2018(9) MDSC 18
 16
VRS, J. & JUD, J.
wp_20729_2018

question is an agricultural land but also to show that agricultural

operations are being carried on.

29. At the outset, it should be pointed out that the question as to

whether the mortgaged property is an agricultural land or not, is actually

a question of fact. Therefore, the representations held out by the

petitioner at the time when the loan was sanctioned, are material for

a decision on the question.

30. It is seen from the legal opinion that the Bank took from their

panel lawyer way back on 07-4-2011, while processing the application of

the petitioner for sanction of a loan that the question as to whether the

property was an agricultural land or not was addressed. The relevant

portion of the legal opinion taken by the Bank on 07-4-2011 from their

panel lawyer reads as follows:

“Note: The Revenue records and the documents referred above

goes to show that the land is agricultural land. However,
it appears that there is no agricultural activity and the land is used
for non-agricultural purpose. In part of the land, sheds were
constructed and the same is assessed to property tax.
However, to avoid any future complications, an Affidavit
may be obtained from Ms. Sunitha Reddy stating that she is using
the land for non-agricultural purpose and she has no objection,
if the Bank proceeds under the Securitisation Act.”

31. Pursuant to the aforesaid legal opinion, the 2nd petitioner gave

a Sworn Affidavit on 08-4-2011. It is only thereafter that the petitioners

were sanctioned a term loan as well as cash credit limit on 10-5-2011.

32. A person who made a representation of a crucial fact in the

form of a Sworn Affidavit and thereby induced a Bank to sanction a term

loan, cannot go back on the representation made by him in his Affidavit.

If the petitioners had refused to swear to an Affidavit in April, 2011, the

Bank would not have sanctioned the facilities at all. After having held out
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VRS, J. & JUD, J.
wp_20729_2018

a particular form of representation to the Bank and after having derived

a benefit on account of such representation, the petitioner cannot now

turn around and contend that what was made out by him/her was

a misrepresentation.

33. A vain attempt was made by the learned counsel for the

petitioner to contend that the petitioner had to swear to such an Affidavit

in April, 2011, because they were in need of money. But the learned

counsel for the petitioner does not want to label the representation made

by the petitioners as a misrepresentation, as the same would expose them

to other consequences. If the petitioners had made a false representation

in order to induce the Bank to sanction limits to them, they cannot go

back on those representations, with a view to deprive the Bank of their

dues. No amount of Case Law would go to the rescue of such a person.

Therefore, the second contention is also liable to be rejected.

34. The third contention revolves around the market value.

The contention of the petitioner is that the valuation obtained way back

on 22-02-2011 was Rs.462.50 lakhs and that therefore the valuation

obtained before the last auction sale was abysmally low. Relying upon the

decision of the Supreme Court in J.Rajiv Subramaniyan v. Pandiyas,

it was contended that the sale of the secured asset should bring the

maximum benefit to the borrower and that the secured creditor is

expected to take bona fide measures to ensure maximum yield.

35. But the fact remains that the Bank had in fact taken a fresh

valuation before the last sale. This was referred to by the Debts Recovery

Tribunal in paragraph-22 of its order.

36. It is true that the securing of the best possible price by the

secured creditor, would be beneficial to both parties. But ideal situations

 18
VRS, J. & JUD, J.
wp_20729_2018

do not arise in auction sales. The Bank could not get a buyer for the

property in 6 auction sales. It was only in the 7th auction that the Bank

succeeded. Therefore, the petitioner cannot make an issue out of the

valuation report. Therefore, the third contention is also liable to be

rejected.

37. In fine, all the three contentions raised by the learned counsel

for the petitioner are liable to be rejected. The Debts Recovery Tribunal

has applied its mind to all the three contentions and chose to reject them

with its own reasons. We do not find any error of law or perversity of

finding on the part of the Debts Recovery Tribunal, so as to set aside the

order of the Debts Recovery Tribunal. Hence, the writ petition fails and

it is dismissed. Pending applications, if any, shall stand closed. No costs.

_________________________
V.RAMASUBRAMANIAN, J.

______________
J.UMA DEVI, J.
31st December, 2018.
Js/Ak

Note:-
1. L.R. Copy to be marked.
2. Website.
(B/o)
Ak
 19
VRS, J. & JUD, J.
wp_20729_2018

HONOURABLE SRI JUSTICE V.RAMASUBRAMANIAN

AND
HONOURABLE Ms JUSTICE J.UMA DEVI

WRIT PETITION NO.20729 OF 2018

(per VRS, J.)

31st December, 2018.

(Ak)