DRT sets aside auction of prpoerty by bank for loan recovery

Debts Recovery Tribunal today set aside the auction of a property of person by the State Bank of Travancore towards recovery of a loan on the ground that the norms under the relevant act were not followed.
DRT Presiding Officer K Harinarayana held that the authorised officer of the bank did not follow the procedure stipulated under SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) for auctioning the property and ordered a compensation of Rs 50,000 to the applicant.
He was allowing an application by L.Noel Raj, Secretary of Bee Keepers Welfare Association of Tamil Nadu, who had given the property as security for availing a loan of Rs.8.35 lakh, which was part of Rs 30 lakh availed by the association.

Harinarayana, however, said the authorised officer was at liberty to bring the subject property for auction afresh by following the procedure stipulated in the SARFAESI Act.
He also said the officer should bear all the expenses incurred after issuance of Sale notice and reverse such entries from the loan account of the applicant.
The amount received from the buyer of the property in the auction held last year should be returned with interest as applicable to fixed deposit, the tribunal said.
It also directed the Managing Director of the bank to conduct an inquiry and take appropriate action against all the concerned, including the Authorised Officer.

The applicant had contended the Sale notice was not sent to him and the officer undervalued the property.