Court instructs official liquidator to challenge asset sale under SARFAESI Act, ensuring informed process and timely resolution.

The court directed the official liquidator to challenge the sale of assets under the SARFAESI Act before the Debts Recovery Tribunal, emphasizing the need for the liquidator to be informed at every stage of the sale process. The official liquidator was granted two weeks to file an appeal, with an assurance from respondents not to raise the plea of limitation. The DRT was instructed to dispose of the appeal within twelve weeks, maintaining the interim order preventing the sale until the appeal's resolution. The official liquidator was allowed to incur legal expenses, and all related applications were disposed of without costs awarded.

---

---

Issues Involved:
1. Direction to prevent the sale of assets under the SARFAESI Act.
2. Joint survey and demarcation of land.
3. Setting aside the sale of assets conducted under the SARFAESI Act.
4. Legal expenses incurred by the official liquidator.
5. Impleadment of a third party as respondent.
6. Higher offer for the purchase of the auctioned land.
7. Confirmation of sale to the auction purchaser.

Detailed Analysis:

Prevention of Sale of Assets under SARFAESI Act:
The company in liquidation sought directions to prevent the first respondent from proceeding with the sale of its assets under the SARFAESI Act. The court had earlier issued an interim order on May 2, 2018, restraining the respondents from selling the property, which was extended until further orders.

Joint Survey and Demarcation of Land:
The applicant requested a joint survey with the Government Surveyor to demarcate the land into two lots—one mortgaged to the first respondent and the other to the second respondent. This was to ensure clarity on the extent of land mortgaged to each creditor.

Setting Aside the Sale of Assets:
The official liquidator argued that the sale of assets by the first respondent was conducted without notifying the official liquidator, as mandated by the Supreme Court in previous judgments (Official Liquidator, U.P. and Uttarakhand v. Allahabad Bank and Pegasus Assets Reconstruction P. Ltd. v. Haryana Concast Ltd.). The liquidator contended that the sale should be set aside due to this procedural lapse.

Legal Expenses Incurred by the Official Liquidator:
The official liquidator sought directions for the respondents to bear the legal expenses incurred in challenging the sale before the Debts Recovery Tribunal (DRT).

Impleadment of a Third Party:
An application was filed by a third party, seeking to be impleaded as a respondent in the case, and offering to purchase the land at a higher price than the auctioned amount.

Higher Offer for the Purchase of Auctioned Land:
The third party offered to purchase the land for Rs. 4,66,00,000, which was higher than the auction price of Rs. 3,42,00,000. The official liquidator received offers ranging from Rs. 3,90,00,000 to Rs. 5,00,00,000, and thus argued that the third party's offer was not substantially higher.

Confirmation of Sale to Auction Purchaser:
The auction purchaser, who had deposited 25% of the bid amount, sought confirmation of the sale and was ready to pay the remaining balance. He argued that his funds were stuck in the process, causing hardship and loss.

Judgment Summary:
The court, after hearing all parties, directed the official liquidator to approach the Debts Recovery Tribunal to challenge the sale under the SARFAESI Act. The court emphasized that the official liquidator must be informed at every stage of the sale process, as established by the Supreme Court. The court also noted that the official liquidator must challenge the sale before the DRT, as per the SARFAESI Act and relevant judgments.

The court granted the official liquidator two weeks to file an appeal before the DRT, with the assurance from the respondents that they would not raise the plea of limitation. The DRT was directed to dispose of the appeal within twelve weeks, and the interim order preventing the sale was to continue until the appeal's disposal.

The official liquidator was permitted to incur legal expenses by moving an appropriate application before the Tribunal. The court disposed of all related applications and closed any pending interlocutory applications. No costs were awarded.

---