Case Details: Celir LLP vs. Sumati Prasad Bafna - [2024] 169 taxmann.com 381 (SC)

Judiciary and Counsel Details

• J.B. Pardiwala & Manoj Misra, JJ.

Facts of the Case

In the instant case, original borrower availed credit facility from bank against which, a simple mortgage was created over a land and buildings (secured asset) belonging to borrower vide a mortgage deed.

Borrower defaulted in repayment of said loan amount and accordingly, bank issued a demand notice under section 13(2) of SARFAESI Act, 2002, for repayment of principal amount along with interest, cost, charges, etc.

Later, Bank issued a possession notice under section 13(4) and took symbolic possession of secured asset – Bank decided to put secured asset to auction – Pursuant to 9th notice of sale, auction proceedings were conducted.

In said 9th auction conducted by bank, petitioner submitted its bid and was declared as highest bidder. Bank sent a sale confirmation letter to petitioner, declaring him as highest bidder in auction of secured asset.

Consequently, Sale certificate was issued to petitioner. Later, borrower filed a writ petition before High Court seeking directions to bank to permit them to redeem mortgage of secured asset – High Court by impugned order permitted borrower to redeem mortgage.

Supreme Court Held

The Supreme Court observed that right of borrower to redeem secured asset would be available only till date of publication of notice under Rule 9(1) of SARFAESI Rules and not till completion of the sale or transfer of secured asset in favour of auction purchaser.

Since no challenge had been laid to 9th auction proceedings on ground of it being either fraudulent or vitiated by inadequate pricing or underbidding, the Supreme Court held that the auction could not be said to suffer from any fundamental procedural error, and as such did not warrant the interference of instant Court.

Thus, sale of secured asset to petitioner was confirmed and title conferred through sale certificate was declared to be absolute. Also, borrower would also unconditionally withdraw securitisation application pending before DRT.

Further, the subsequent Transferee would hand over peaceful physical possession of Secured Asset along with its original title deeds to Bank. Also, bank would refund amount paid by borrower towards redemption of mortgage without any interest.

List of Cases Referred to

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Public Notice No. II/21022/23(04)/2024/FCRA-II, Dated 13.12.2024

The government has issued a directive regarding the prompt response to clarifications sought for registration, renewal, or prior permission applications under the Foreign Contribution (Regulation) Act, 2010. Applications are processed exclusively through the FCRA portal, & any deficiencies in information will result in queries raised on the portal. Applicant associations are advised to regularly check their FCRA portal & email accounts to respond promptly to avoid denial of their applications.

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Case Details: Arun Khanna v. Renu Sharma - [2024] 169 taxmann.com 224 (HC-Delhi)

Judiciary and Counsel Details

• Prateek Jalan, J.
• Ms Vaneeta Khanna for the Appellant.
• Hemant Kumar Yadav & Mohit Chaturvedi, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant filed a suit seeking recovery of an amount tendered by him to the respondent on the ground that respondent had filed a false, malicious and frivolous case against him under section 138 of the Negotiable Instruments Act, 1881, which was decided in favour of appellant by order of MM.

The Respondent filed an application under Order VII Rule 11 of CPC seeking rejection of the plaint on the ground that it did not disclose a cause of action. The Trial Court noted the respondent’s submission wherein it was stated that the judgment of the Metropolitan Magistrate MM) recorded the fact that the appellant had taken a loan from the respondent and that payment of Rs.1.37 lakhs by him to the respondent was made as a compromise.

Accordingly, the Trial Court, by the impugned order, rejected the plaint. It was evident from extracts of impugned judgment that the Trial Court had proceeded on the basis that the judgment of MM did not contain any finding to the effect that the cheque in question was not issued in discharge of legally enforceable debt or liability.

High Court Held

The High Court observed that since MM had recorded a clear conclusion that the appellant herein had successfully rebutted the presumption that the cheque was issued in discharge of a legally enforceable debt or liability, rejection of a plaint, at the threshold, based on a reading of the judgment of MM could not be sustained.

The High Court held that the Trial Court was required to confine its analysis to the plaint and documents annexed with it and could not, at the stage of Order VII Rule 11, render a conclusive finding regarding the discharge of a legally enforceable debt or liability, the plaint was to be restored to the file of the Trial Court for fresh consideration.

List of Cases Referred to

• Dahiben v. Arvindbhai (2020) 7 SCC 36 (para 11)
• Geetha v. Nanjundaswamy 2023 SCC OnLine SC 14 (para 12).

The post HC Sends Recovery Suit Back to Trial Court Due to Errors in Interpreting Metropolitan Magistrate’s Judgment on Cheque Dispute appeared first on Taxmann Blog.

Notification No. S.O. 5371(E); dated: 12.12.2024

The Ministry of Finance has permitted 4 reporting entities to perform authentication under the Aadhaar Act, 2016. The permission is granted only for the purpose of Aadhar authentication as required u/s 11A of the Money Laundering Act, 2002. Section 11A requires the verification of the identity of reporting entities’ clients and beneficial owners by way of aadhaar authentication.

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Notification No. IFSCA-PMTS/9/2023, Dated: 05.12.2025

The International Financial Services Centres Authority (IFSCA) has renewed recognition of ‘India International Bullion Exchange IFSC Limited, Gujarat’ as Bullion Exchange and Bullion Clearing Corporation for one year, commencing on the 9th day of December 2024 and ending on the 8th day of December 2025.

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Circular No. RBI/2024-2025/96 FIDD.CO.FSD.BC.No.10/05.05.010/2024-25; Dated: 06-12-2024

The RBI has decided to raise the limit for collateral free agricultural loans including loans for allied activities from the existing level of Rs. 1.6 lakh to Rs. 2 lakh per borrower. This decision is taken by considering the overall inflation and rise in agriculture input cost over the years. Further, banks are advised to waive collateral security and margin requirements for agricultural loans, including loans for allied activities up to Rs. 2 lakh per borrower.

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Notification No. S.O. 5241(E)., Dated 05.12.2024

The Central Government, exercising its powers under Section 3(1)(d)(vi) of the IFSCA Act, 2019, has notified schemes operated by pension funds as ‘financial products’ for the purposes of the Act. This notification, shall be effective from the date of its publication in the Official Gazette.

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Circular No. RBI/2024-25/94 DoR.SPE.REC.No.51/13.03.00/2024-2025, Dated 06.12.2024

RBI has raised the interest rate ceilings on Foreign Currency (Non-resident) Accounts (Banks) [FCNR(B)] deposits for banks, effective from December 06, 2024, until March 31, 2025. For deposits with a maturity of 1 year to less than 3 years, the ceiling is the Overnight Alternative Reference Rate (ARR) of the respective currency plus 400 basis points. For deposits with a maturity of 3 years to 5 years, the ceiling is ARR plus 500 basis points.

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Press Release: 2024-2025/1646 , Dated 06.12.2024

On the basis of an assessment of the current and evolving macroeconomic situation, the RBI’s Monetary Policy Committee (MPC), in its meeting, has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 %. Further, the standing deposit facility (SDF) rate also remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.

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Circular No. RBI/2024-25/95 DoR.RET.REC.52/12.01.001/2024-25, Dated 06.12.2024

The RBI has announced a reduction in the Cash Reserve Ratio (CRR) for all banks by 50 basis points in two equal tranches of 25 basis points each. The CRR will be maintained at 4.25% of Net Demand and Time Liabilities (NDTL) from the reporting fortnight beginning December 14, 2024, and at 4.00% from the fortnight beginning December 28, 2024.

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