S. Sivakumar Vs S. Janaki (DRT Chennai)
The Securitization Application (SA) was filed under Section 17(1) of the SARFAESI Act challenging the action taken by the secured creditor under the Security Interest Enforcement Rules, 2002. The applicants sought to set aside the auction sale held on 10.03.2023 pursuant to the sale notice dated 15.02.2023, where the outstanding amount was stated as Rs.1,82,62,825.
The applicants submitted that they had availed credit facilities from the respondent financial institution and were regular in repayment initially. However, financial losses due to the Chennai floods in 2015 and the COVID-19 pandemic resulted in their inability to pay instalments regularly. The respondent issued a demand notice under Section 13(2) on 01.06.2017 and a possession notice under Section 13(4) on 18.12.2018. The applicants claimed to have paid more than Rs.90 lakh and sought a One Time Settlement (OTS), which was rejected. They also challenged an earlier sale notice dated 21.09.2022 in a previous application where conditional interim relief was granted. Although the applicants complied with the first condition, they failed to comply with the second, leading to dismissal of the earlier application on 28.02.2023.
The applicants alleged that the respondent charged interest contrary to RBI guidelines, sold the property below market value, failed to publish the sale notice in two newspapers as required under Rule 8 of the SIE Rules, and did not disclose details of the auction purchaser. They also contended that the auction purchaser made payments contrary to the sale notice and sought setting aside of the auction conducted on 10.03.2023.
