M S AGROCATE INDIA PVT LTD v. ASSETS RECONSTRUCTION COMPANY INDIA LTD

competition in auction sale. It is further contended that proper valuation is not obtained for fixing reserve price. On these grounds, Appellants challenged the Sale Notice. First Respondent Institution filed Counter disputing the objections raised in Securitisation Application, contending that, the Application is misconceived and allegations made in the Application are false and frivolous. It is further contended that before issuing Sale Notice, first Respondent Institution issued Notice under Section 13(2) SARFAESI Act, 2002, calling upon to pay an outstanding of Rs.2,94,71,200.62p, as on 15.11.2018, and in spite of receipt of Notice, as Appellants failed to discharge outstanding, first Respondent Institution proceeded further and took physical possession of secured asset, on 28.03.2019, by invoking Section 14 of SARFAESI Act, 2002. Those measures were challenged by Appellants by filing Securitisation Application and those facts are not disclosed in the present Securitisation Application. It is further

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contended that earlier Sales were not materialized for want of bidders, therefore, Authorised Officer again took measures. It is contended that in Sale Notice dated 05.07.2019, reserve price was fixed at Rs.3.80 Crores and in Sale Notice dated 23.09.2019, reserve price was fixed at Rs.3.23 Crores, and as no bidders came forward on those two occasions, reserve price was reduced to Rs.2,26,10,000/-, on the basis of valuation certificate, and thereafter, issued a fresh Sale Notice for auction on 09.09.2020. It is further contended, in the said auction, Mrs. Afshana Taj became the highest bidder and Sale is concluded.

On these contentions, Tribunal below held that Securititsation Application is without any merits and consequently dismissed the same; aggrieved by the same, present Appeal is preferred.

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3. Both Appellants and first Respondent Institution filed their Written Submissions and reiterated the same at the time of oral arguments.

4. Advocate for Appellants mainly harped on the point that the Assignment Deed in fovour of first Respondent Institution, is to be ignored for want of registration. He submitted that as the Assignment Deed is not registered, it is in violation of Section 28 of Registration Act, 1908, and it has to be treated as void and illegal. Added to that, it is contended that there is violation in Demand Notice, violation in Possession Notice and violation in Sale Notice. But, these violations referred to in Written Submissions, are nowhere pleaded in the Securitisaton Application, therefore, any amount of argument, without pleadings and evidence, is of no use. Even the objection with regard to registration is also not raised, but since it is a legal point, the same is to be considered.

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5. On the other hand, Advocate for first Respondent Institution submitted that it has followed all the provisions of SARFAESI Act and Rules, made there under, and there are no violation of SARFAESI Act or Rules, at all, and Tribunal below considered every aspect of the matter, and came to a right conclusion, and there are no grounds to interfere with the well reasoned Order of Tribunal below.

6. As already referred to above, main objection of Advocate for Appellants is about registration. Advocate for first Respondent Institution submitted that Respondent Institution is a registered company pursuant to Section 3 of SARFAESI Act, 2002, and all assignments of secured assets are recognized under the provisions of SARFAESI Act, 2002, therefore, the objection of Appellants is not tenable.

7. As seen from the Registration Act, 1908, Section 28 deals with place of registration. Place of registration becomes relevant where document purported to be

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registered, requires registration. Section 17 of Registration Act, deals with documents that are to be registered compulsorily. Section 18 of Registration Act, deals with documents where registration is optional. When these two Sections are read together, Assignment Deed referred to by Appellants, falls under the category of Section 18 (b) of Registration Act, 1908. So, According to Section 18, registration is only an optional, therefore, the objection of Appellants with regard to registration is not tenable, and the same cannot be accepted. Further, as rightly pointed out by Advocate for first Respondent Institution, SARFAESI Act, 2002, recognized this assignment and Section 5 (1A) of SARFAESI Act, 2002, exempted Assignment Deed from paying stamp duty.

8. Other contention raised on behalf of Appellants is with regard to valuation. As already referred to above, only objection raised in the Securitisation Application is about the reduction of reserve price, and on that ground, Sale Notice

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dated 07.08.2020 is challenged. First Respondent Institution explained the reasons for such reduction, and as seen from record, those reasons are perfectly convincing. Further, Sale Notice dated 07.08.2020, is not the first Sale Notice, and prior to that, first Respondent Institution made two or three attempts, but no bidders came forward on all those occasions for the reserve price indicated, therefore, Authorised Officer has reduced the reserve price taking valuation report into consideration, and Tribunal below was convinced with explanation of first Respondent Institution with regard to reduction of reserve price. I do not find any wrong in the reduction of reserve price, particularly, when on earlier three occasions, no bidders came forward for reserve price indicated in the earlier Sale Notices. Therefore, the objection raised in the Securitisation Application with regard to Sale Notice dated 07.08.2020, is absolutely untenable, and Tribunal below rightly discarded the same.

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9. On a scrutiny of entire material, I am of the considered view that Tribunal below rightly dismissed the Securitisation Application and there are absolutely no grounds to interfere with the findings of Tribunal below. For these reasons, it is held that Appeal is devoid of merits and liable to be dismissed.

10. In the result, the Appeal in RA (SA) 47/2021 is dismissed. Parties shall bear their own costs. All pending IAs, if any, stand closed.

[Dictated to Athistamani transcribed by her, corrected, signed and pronounced by me in open court, this 23^rdof July, 2024]

[Justice S. Ravi Kumar]

CHAIRPERSON

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