High Court imposes cost on TIIC for failing to hand over possession of a property to auction purchaser

The Madurai Bench of the Madras High Court has imposed a cost of ₹50,000 on the Tamil Nadu Industrial Investment Corporation (TIIC) for failing to hand over possession of a property to an auction purchaser.

The Madurai Bench of the Madras High Court has imposed a cost of ₹50,000 on the Tamil Nadu Industrial Investment Corporation (TIIC) for failing to hand over possession of a property to an auction purchaser.

The court was hearing a petition filed by Jasper Raj of Kanniyakumari district. He sought a direction to the authorities for the delivery of physical possession of the property pursuant to the sale certificate executed by the Corporation in favour of the petitioner. The Corporation had brought the secured asset for sale and sold the same to the petitioner in 2021. A certificate of sale was also issued to him. However, the possession of the property was not handed over to the petitioner.

Though the Corporation issued a certificate stating that the property had been delivered to the petitioner / auction purchaser and the purchaser had also signed the same, the actual physical possession was not handed over to the auction purchaser.

When the petitioner approached the Kanniyakumari Collector seeking possession, it was clarified that if the secured creditor Corporation filed an application under the SARFAESI Act, 2002, action will be taken for delivery of possession. Thereafter, the Collector wrote to the Corporation to take action for delivery.

A Division Bench of Justices R. Subramanian and L. Victoria Gowri observed that it showed the highly irresponsible, negligible and careless manner in which the Corporation behaved.

“All that the petitioner asked for was to invoke the provision under Section 14 of the SARFAESI Act, 2002 and seek possession through the District Collector or the Chief Judicial Magistrate. In view of the refusal to hand over possession to the auction purchaser, we firmly believe that the Corporation is in collusion with the debtor”, the court observed.

The court directed the Corporation to file an application before the Collector within ten days and the Collector was directed to dispose of the application filed under Section 14 of the SARFAESI Act, 2002 within 30 days.