M. R. Vasumathi Vs Authorized Officer & Ors. (Supreme Court of India)
The appeal arose from a judgment of the Madras High Court dismissing writ petitions filed by the daughter and son of a deceased guarantor challenging recovery proceedings and an auction sale conducted by the secured creditor under the SARFAESI Act. The appellant questioned the legality of the auction sale held on 11.03.2010, contending that the statutory procedure governing the sale had not been followed.
The borrower had obtained financial assistance in 1984, with the deceased guarantor mortgaging his immovable property. Following default, the secured creditor obtained a preliminary decree in 1997. After the guarantor’s death in 2001 and unsuccessful settlement efforts, the secured creditor issued a demand notice under Section 13(2) of the SARFAESI Act on 08.09.2009, followed by possession and sale notices. The secured asset was auctioned on 11.03.2010 for Rs. 2,11,00,500, with 25% of the bid amount paid on 10.03.2010/11.03.2010, the balance paid on 31.03.2010, and the sale certificate issued on 10.04.2010. The legal heirs challenged the proceedings before the DRT, which dismissed their applications. The DRAT affirmed the dismissal, and the High Court also dismissed the writ petitions, holding that the secured creditor had validly exercised its powers under the SARFAESI Act and that no interference was warranted.
