Indian Overseas Bank Vs State of Maharashtra and Others (Bombay High Court)
Summary: The Bombay High Court allowed the writ petition filed by Indian Overseas Bank, a secured creditor, challenging the auction sale dated 7 April 2018 conducted by State revenue authorities in respect of land bearing Survey No. 43/1/B. The Bank had sanctioned financial facilities to the borrower in 2007, secured by an equitable mortgage through deposit of title deeds. The charge was registered with the Registrar of Companies on 31 January 2007. After the borrower’s account became NPA on 31 December 2010, the Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), issuing notice under Section 13(2) on 28 September 2012 and possession notice under Section 13(4) on 20 December 2012.
The dispute arose because the State authorities sought recovery of Rs. 2,68,99,000/- due from the borrower to the District Industries Centre as arrears of land revenue. The Tahsildar ultimately auctioned the property on 7 April 2018. Since no bids were received, the property was purchased on behalf of the Government for Re. 1/- and a purchase certificate was issued in the name of the Government of Maharashtra.
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