Full Judgment
ORDER
(Order of the Court was made by
CHITRA VENKATARAMAN, J.)
1. The petitioner seeks a writ of certiorari to quash the sale notice dated 14.01.2011. The petitioner herein, who is a partner along with yet another person, availed of a loan facility from the respondent-bank for running a Computer Centre. The affidavit filed before this Court shows that originally the petitioner offered the property at Housing Board Colony, Navelpet, Trichy as security for the loan availed by him. Since there was no registered sale deed, the same was not accepted. Hence, he offered the property of the partner Damodaran, situated in Srirangam, as security. It is stated that the business was handed over by the petitioner to the said Damodaran and they shifted from Trichy to Chennai. However, in the meantime, the said Damodaran committed default.
2. It is evident from the documents placed before this Court that at the time of allotment of the Housing Board property, a tripartite agreement was entered into between the petitioner, BHEL, the employer and the bank. An initial cost of Rs.79,000/- was paid by the petitioner. The agreement dated 05.07.1986 stated that after completion of all formalities, the possession of the house would be handed over to the petitioner and the Tamil Nadu Housing Board would transfer the title of the house to the allottee on completion of five years and on payment of the cost of the house, including the final cost due on the fixation of final price. A reading of the said Certificate of the Housing Board shows that the Housing Board has first charge over the property to the extent of the amount due and payable to the Housing Board by the allottee. Admittedly, the Housing Board, in its proceedings dated 28.02.2011, arrived at the outstanding amount of Rs.3,51,302/- and called upon the petitioner to pay the said amount on or before 31.03.2011. Admittedly, such demand has not been complied with by the petitioner. Leaving that aspect aside, it is a matter of record that the petitioner, along with his partner, committed default in making payment to the bank which resulted in Section 13(2) notice under SARFAESI Act, to be issued on 13.03.2007, which covers hypothecated assets as well as the details of the property at Plot No.4A 335, Anna Nagar, Navalpattu, Tiruchirappalli, with a house on it measuring 3500 sq.ft., and the property of the guarantor, viz. Damodaran. The second property was brought to sale and the amount had been adjusted towards the defaulted amount. Since the respondent-bank auctioned the house property, the present writ petition has been filed, contending that the property was not at all mortgaged to the respondent-bank and that he never received any title deed from the Tamil Nadu Housing Board till date. Since the bank is not a secured creditor, the question of invoking the SARFAESI Proceedings to bring the property to sale does not arise.
3. Learned counsel for the petitioner submitted that the consideration on sale of the property belonging to the partner is also minimal. We do not think that can be established before this Court since admittedly, no dispute was raised on the sale of the said property belonging to Damodaran.
4. A consideration of the above-said facts thus makes it clear that as of today, the petitioner had admittedly received Sections 13(2) and 13(4) notices and the Authorised Officer took symbolic possession of the property on 05.01.2008. For the property which was sought to be auctioned, notice of auction dated 11.01.2011 was issued. The property was also sold to one Mrs.N.Chitra Kala, W/o.T.Nataraja Manikam, resident of D-122, 7th Cross (West), Thillainagar, Tiruchirappalli-620018 at a cost of Rs.10,55,000/-. The respondent is not in a position to say whether the purchaser had paid the full sale amount. It is a matter of record that admittedly, the petitioner had not remitted the full amount as demanded by the Housing Board. It is also a matter of record that in view of the default committed in payment of the sale consideration, the Tamil Nadu Housing Board is entitled to recover the amount by sale of the property. In the background of the above facts, in the context of the fact that the petitioner has an effective remedy by way of appeal before the Debt Recovery Tribunal under Section 18 of the SARFAESI Act, the contention of the petitioner that the auction notice has to be quashed, does not call for any interference before this Court. Admittedly, the petitioner does not claim any right over the said property. Therefore, whatever the bank had done to sell the property necessarily has a bearing as regards the right of the Housing Board, which is not a party before this Court. In the background of the said facts, we do not think, at this stage, this Court should pass any final orders on the petitioner's claim. Therefore, the writ petition is dismissed. Consequently, M.P.(MD)Nos.1 and 2 of 2011 are closed. No costs. It is open to the respondent- bank to seek appropriate remedy before the appropriate forum.