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Showing contexts for: borrower in K. Chidambara Manickam vs Shakeena on 10 August, 2007Matching Fragments
2.2. As the borrowers have not complied with the said demand, the second respondent/Bank, alleging that as on 31.10.2004, a sum of Rs.10,72,483/- was due from each of them, directed the borrowers to discharge the loan amounts with interest at the rate of 11.75% per annum within a period of sixty days. In replication, the borrowers by representations dated 10.12.2004 and 30.12.2004 requested the second respondent/bank to consider their case for one time settlement. The borrowers invoking Section 17 of the SARFAESI Act filed S.A.Nos.21 and 22 of 2005 before the Debts Recovery Tribunal II, Chennai, challenging the said notices issued by the second respondent/Bank, but the same were dismissed on 28.09.2005.
2.5. On 02.01.2006, the borrowers, however, approached the second respondent/bank and deposited three cheques for a total sum of Rs.25,21,445/- to discharge the amount due and payable in respect of the notices issued to them.
The second respondent/Bank, by informing the borrowers that the secured assets have already been sold and the sale was to be confirmed on or before 17.01.2006, returned the cheques on 04.02.2006.
2.6. The borrowers filed I.A.Nos.13 and 14 of 2006 for condoning the delay in filing petitions to restore S.A.Nos.21 and 22 of 2005 and also filed petitions to restore S.A.Nos.21 and 22 of 2005 and for stay of the confirmation of the auction sale. The Debts Recovery Tribunal II, Chennai, by an order dated 10.01.2006, recording the submission of the second respondent/bank that the auction purchaser had paid the entire sale consideration and sale certificate was issued to him on 06.01.2006, dismissed the applications of the borrowers with liberty to pursue their remedies.
10.6. For an in depth analysis of this point, some additional relevant facts need emphasis. On issuance of notices under Section 13(2) of the Act, the borrowers approached the Debts Recovery Tribunal under Section 17 of the Act. The Tribunal, as a pre-condition to stay the said notices, directed the borrowers to pay a sum of Rs.1,50,000/- in each case and as the borrowers failed to pay the amount, the petitions filed by them were dismissed by the Tribunal. Thereafter, the borrowers did not pursue the matter further before the Tribunal. Later, when the sale was completed, the borrowers again approached the Tribunal to restore the original petitions dismissed for default along with petitions to condone the delay and when the matter came up before the Tribunal on 10.01.2006, the Tribunal dismissed the petitions filed by the borrowers recording the statement of the second respondent/Bank that sale has already completed and sale certificate was issued to the highest bidder/appellant herein. At this stage, instead of filing an appeal before the Appellate Tribunal, the borrowers have come before this Court by way of filing writ petitions, seeking the relief referred supra.
10.8. The learned Single Judge, accepting the argument of the learned counsel for the borrowers that though they have sent three cheques for Rs.25,21,246/- on 02.01.2006 i.e. prior to the issuance of sale certificate on 06.01.2006, the second respondent has returned those cheques, in contravention of sub-section (8) of Section 13 of the Act on the ground that sale was already over and confirmation of the same was to be made shortly, allowed the writ petitions.
10.9. In our considered view, the borrowers should have approached the secured creditor or the authorised officer before the date fixed for sale and not after the sale, as provided under sub-section (8) to Section 13 of the SARFAESI Act. As discussed earlier, only if the borrowers approach the secured creditor or the authorised officer before the date fixed for sale or transfer and tender or pay all the dues to the secured creditor, the Section creates a bar on the secured creditor or authorised officer to proceed further with the proposed sale or transfer. In this case, admittedly, the date fixed for the sale was 19.12.2005. But, even according to the version of the borrowers, they approached the secured creditor only on 02.01.2006. In such circumstances, the contention of the learned counsel for the borrowers is without any basis and contrary to the provisions contained in sub-section (8) of Section 13 of the Act.