SANJAY KUMAR,J. - (1.) The petitioner calls in question the order dated 15.09.2015 passed by the Debts Recovery Tribunal, Visakhapatnam, in S.A.No.201 of 2015. Consequently, he seeks an order allowing S.A.No.201 of 2015 and setting aside the proceedings initiated by the Indian Overseas Bank (hereinafter, the bank) under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter, the SARFAESI Act), including the auction sale held on 15.07.2015. This sale related to the land admeasuring 393 square yards with a two storied R.C.C. building thereon, bearing Door No.9 -19 -20A, Layout No.212/61, T.P.No.200/59, Plot No.107, Block No.46, T.S.No.1035, CBM Compound, Visakhapatnam. The 7th respondent herein was the auction purchaser in the said sale. Further directions are sought to the bank not to confirm this sale and issue a sale certificate, register the same or deliver possession to the 7th respondent. By order dated 12.10.2015, this Court directed the bank not to register the sale certificate in favour of the auction purchaser till 28.10.2015. The said order was extended thereafter from time to time. On 02.12.2015, this Court took note of the petitioners allegation that though the auction was conducted on 15.07.2015, the 7th respondent/auction purchaser did not deposit 25% of the bid amount on the day of the auction and also failed to deposit the balance 75% of the bid amount within 15 days as required, and directed the Chief Manager and Authorised Officer of the bank to file an additional affidavit indicating the date when the bid of the 7th respondent/auction purchaser was confirmed and also the details of its payment of 25% and the balance 75% of the bid amount. The interim order granted on 12.10.2015 also stood extended and is operative as on date.
(2.) The impugned order dated 15.09.2015 in S.A.No.201 of 2015 reflects that the case was disposed of upholding the auction sale, which admittedly took place after the date stipulated in the sale notice, but giving an opportunity to the petitioner herein, the applicant in S.A.No.201 of 2015, to pay the outstanding dues of the bank along with interest within thirty days from the date of the order. The Tribunal further directed that in the event he failed to pay the dues within the time stipulated, the sale would stand confirmed. In the event he paid the amount, the bank was directed to refund the amount paid by the auction purchaser with simple interest thereon at 4% per annum which would be recoverable from the applicant. The bank was further directed to defer delivery of possession to the auction purchaser for a period of thirty days.
(3.) Admittedly, the petitioner was a guarantor for the loan availed by the 2nd respondent company from the bank and is therefore a borrower', as defined under Section 2(1)(f) of the SARFAESI Act. The said loan account was classified as a non -performing asset and the bank issued a demand notice under Section 13(2) of the SARFAESI Act on 14.05.2014. Thereunder, the total outstanding dues as on 31.03.2014 aggregating to Rs.2,50,74,745/ -, with further interest at 13% with monthly rests, were directed to be paid within sixty days. Upon non -compliance, the bank initiated proceedings under Section 13(4) of the SARFAESI Act by issuing possession notice dated 10.09.2014 in terms of Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (hereinafter, the Rules of 2002). It appears that the bank then initiated auction sale proceedings which did not fructify. Thereafter, sale notice dated 29.05.2015 was issued by the bank in terms of Rule 8(6) of the Rules of 2002 [wrongly mentioned as Rule 8(5)] informing the borrowers that the secured assets would be put to sale on 01.07.2015. This sale notice was also published in Eenadu Telugu Newspaper and Hindu English Newspaper on 30.05.2015. It is however an admitted fact that the proposed sale did not take place on 01.07.2015, the notified date, and it was actually held on 15.07.2015. Two bidders participated in this auction and the 7th respondent herein emerged as the successful bidder, offering Rs.2,53,13,000/ - as against the reserve price of Rs.2,52,88,000/ -.;