Varimadugu Obi Reddy vs B. Sreenivasulu on 16 November, 2022
In Varimadugu Obi Reddy v. B. Sreenivasulu: (2023) 2 SCC 168 the securitisation application had been dismissed by the DRT, the dismissal order was not challenged and it became final. After taking possession of the mortgaged property, the Bank issued a notice to the borrowers calling upon them to repay the outstanding amount and thereafter it issued e-auction sale notice dated 25.02.2015 fixing the date of auction of the scheduled property on 28.03.2015. That borrowers challenged the e-auction sale notice before the DRT. The DRT passed an interim order dated 26.03.2015, directing the Bank to proceed with the auction-sale of the secured asset with a further direction not to issue the sale certificate provided the borrowers deposit Rs 6 lakhs within 15 days from the date of the said order, i.e., by 09.04.2015. It was made clear that in the event of the respondent borrowers fail to deposit the said amount, the respondent Bank will be at liberty to issue the sale certificate in favour of the highest bidder. The borrowers failed to deposit Rs 6 lakhs by 09.04.2015 and they filed an application on 09.04.2015 seeking extension of further 15 days time from 10.04.2015 to deposit the amount and the Tribunal passed an order dated 17.04.2015 granting extension of 15 days time to deposit Rs 6 lakhs and directed the Bank and the borrowers to maintain status quo. Since the dispute was ongoing before the Tribunal and the borrowers had failed to comply with the interim order dated 26.03.2015 to deposit Rs 6 lakhs within 15 days from the date of passing of the order by 10.04.2015, the Bank proceeded with the auction-sale in terms of liberty granted by the Tribunal. The auction purchaser had deposited Rs.5,54,000/- as the earnest money and he further deposited 25% amount after being declared the highest bidder. The purchaser deposited the balance 75% amount on 15.04.2015 and a sale certificate was issued in his favour. The auction sale had already been finalised and the sale certificate had already been issued when the Tribunal passed the order dated 17.04.2015 granting extension of 15 days time to the borrowers to deposit Rs 6 lakhs.