Telangana HC restores auction sale of Jubilee Hills property of Bandla Ganesh
The Telangana High Court has restored the auction sale of a Jubilee Hills property belonging to film producer Bandla Ganesh and his father, overturning a Debt Recovery Tribunal order that had annulled the sale.
By Our Legal Correspondent
Hyderabad: Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar of the Telangana High Court on Friday restored the auction sale of a Jubilee Hills property belonging to Telugu film producer Bandla Ganesh Babu and his father, setting aside orders of the Debt Recovery Tribunal-II (DRT-II), Hyderabad, which had cancelled the sale and directed restoration of possession to the guarantors.
The Division Bench allowed writ petitions filed by Union Bank of India in relation to recovery proceedings against M/s Sri Parameshwara Poultry Farm Pvt. Ltd., a company promoted by Bandla Ganesh, his father and brother. The property had been sold in a bank auction for Rs 8.50 crore under the provisions of the SARFAESI Act, 2002.
The DRT-II had earlier allowed a securitisation application filed by the guarantors, annulled the auction sale and directed refund of the sale consideration to the auction purchaser along with six per cent interest. Senior counsel B.S. Prasad, appearing for the bank, and Senior counsel Mayur Reddy, appearing for the auction purchaser, argued that the tribunal had committed jurisdictional errors and failed to consider material facts and documentary evidence on record.
They contended that the insolvency proceedings initiated against the corporate debtor before the National Company Law Tribunal did not extend the benefit of moratorium to personal guarantors and, therefore, did not invalidate the measures taken under the SARFAESI Act.
It was also brought to the notice of the Court that the auction sale proceeds had been adjusted under a one-time settlement and that the guarantors had agreed to withdraw all pending litigations, including the proceedings before the DRT.
After examining the provisions of the Insolvency and Bankruptcy Code, the SARFAESI Act and the precedents governing the liability of personal guarantors, the Division Bench allowed the bank’s writ petitions and restored the auction sale.
