S B VALVES Vs. CANARA BANK TRAFFIC ISLAND BRANCH

JUDGEMENT

(1.) HEARD Sri Hanumanthreddy Sahukar, learned counsel appearing for the petitioner and Sri Kamoji, learned counsel appearing for the respondent -Bank. Perused the writ papers.

(2.) PETITIONER has borrowed loan from respondent/bank and undisputedly, said loan amount borrowed by petitioner has been classified as "non - Performing asset" by respondent/bank and it had initiated proceedings before the Debt Recovery Tribunal, Bangalore for recovery of the amount due to it. Debt Recovery Tribunal on adjudication of application has issued a recovery certificate as sought for by the respondent/bank. Pursuant to same, property bearing R.S No.213/2, situated at Anchatageri village, Hubli Taluk measuring 3 acres 2 guntas which had been mortgaged as security for repayment of loan has been brought for sale by respondent Bank. Bank had fixed the reserve price or floor value price at Rs.228.51 lakhs in the auction which was proposed to be held on 15.11.2013. Bank had given paper publication by publishing the same in Vijay Karanataka, Kannada daily news paper which is having largest circulation in the area in which the property is situated. However, there were no participants in the said auction. Again the property was brought for sale and auction was proposed to be held on 04.12.2013. The reserve price fixed was Rs.228.51 lakhs. Publicity to conduct said auction was made through issue of Hand bills or pamphlets. Said auction also did not materialize. The attempts made by the Bank to sell the property has been in vain.

(3.) SUBSEQUENTLY , on 30.12.2013, respondent -Bank got published a notice in Vijaya Vani, Kannada daily news paper which also has very large circulation in the locality notifying thereunder to conduct auction of the subject property on 31.01.2014, at 3.30 p.m. The floor value or reserve price was fixed at Rs.110 lakhs. Being aggrieved by the fixation of floor price value, petitioner is before this Court challenging the same and contending that it is arbitrary, illegal and without any basis and the Bank could not have fixed reserve price or floor price value at Rs.110 lakhs and it could not have reduced the floor price to Rs.110 lakhs from 228.51 lakhs as fixed earlier. It is also contended that Bank itself had obtained report on 19.04.2013 from its panel valuer whereunder it was stated that the value of the land would be Rs.285.64 lakhs as per Annexure -D. Petitioner also claims to have obtained valuation report from another panel valuer of the respondent/Bank relating to the subject property wherein he has valued the property under auction at Rs.405.21 lakhs and as such it is contended that floor value fixed at Rs.110 lakhs by the Bank in the proposed auction to be held on 31.01.2014 is arbitrary and same is much below the actual market value. It is also contended that Bank has no arbitrary right to reduce the floor value of subject property from Rs.228.51 lakhs to Rs.110 lakhs and said act of respondent -Bank is without any justification. On these grounds, petitioner has invoked extraordinary jurisdiction of this Court under Article 226 of the Constitution of India and is seeking for quashing of auction notice Annexure -C.