High Court grants writ petition, quashes DRT order, directs fresh hearing, allows amendment, protects petitioner from dispossession.

The High Court allowed the writ petition, quashed the DRT's order, and directed a fresh hearing by the DRT after allowing the petitioner to amend the application and implead the auction purchaser. The petitioner was also protected from dispossession from the auctioned property until the matter was resolved.

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Issues Involved:
1. Legality of the auction process conducted by Canara Bank.
2. Maintainability of the writ petition in light of alternative remedies.
3. Alleged irregularities in the auction process.
4. Petitioner's right to amend and implead the auction purchaser in the review application.

Detailed Analysis:

1. Legality of the Auction Process Conducted by Canara Bank:
The petitioner challenged the order dated 29.11.2010 by the Debt Recovery Tribunal (DRT), Lucknow, and the sale certificate dated 18.1.2008 issued by Canara Bank. The petitioner argued that the auction process was flawed and did not comply with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and the Security Interest (Enforcement) Rules, 2003. Specifically, the petitioner claimed that the bank did not deliver a possession notice to the borrower or publish it in newspapers as required under Rule 8. Furthermore, the petitioner alleged that the auction purchaser did not deposit 25% of the bid amount immediately after the auction, nor did they deposit the remaining 75% within the stipulated fifteen days, thereby violating Rules 9 (3), (4), and (5) of the Rules.

2. Maintainability of the Writ Petition in Light of Alternative Remedies:
The respondent-Bank and auction purchaser objected to the maintainability of the writ petition, arguing that the petitioner had an alternative remedy under Section 17 of the SARFAESI Act. They cited precedents, including the Supreme Court's decision in United Bank of India Vs. Satyawati Tondon, which emphasized that the High Court should not entertain a writ petition if an effective alternative remedy is available. The petitioner countered that the High Court had already considered and rejected this objection at the admission stage, and the Supreme Court had affirmed the High Court's interim order, thus the issue of maintainability should not be re-litigated.

3. Alleged Irregularities in the Auction Process:
The petitioner pointed out several irregularities in the auction process, including the delayed deposit of the bid amounts by the auction purchaser and the lack of proper notice under Rule 8. The petitioner obtained information under the Right to Information Act, 2005, which indicated that the auction purchaser did not comply with the mandatory requirements for depositing the bid amounts. The petitioner argued that these irregularities rendered the auction null and void and requested that the auction be declared a nullity.

4. Petitioner's Right to Amend and Implead the Auction Purchaser in the Review Application:
The petitioner sought to amend the review application and implead the auction purchaser, but the DRT rejected these requests. The Tribunal held that the description of the auction was already provided in the counter affidavit, and the irregularities were not new facts warranting a review. However, the High Court found that the Tribunal had not correctly appreciated the petitioner's claims and that the information obtained under the RTI Act was relevant. The High Court quashed the DRT's order dated 29.11.2010, allowed the review application, and directed the DRT to permit the petitioner to amend the application and implead the auction purchaser. The DRT was instructed to hear and decide the matter afresh, providing an opportunity for all parties to be heard.

Conclusion:
The High Court allowed the writ petition, quashed the DRT's order, and directed a fresh hearing by the DRT after allowing the petitioner to amend the application and implead the auction purchaser. The petitioner was also protected from dispossession from the auctioned property until the matter was resolved.

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