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2016 (6) TMI 2
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....y Deposit (EMD) of Rs. 11,90,000/-. The date of the auction, as already noticed, was 26.07.2013. The bid of the writ petitioner was found to be the highest. In terms of the auction, the bidder was to deposit a sum representing 25 per cent of the bid amount on the next day, i.e. by 27.07.2013. Writ petitioner made the deposit representing 25 per cent of the amount on 27.07.2013 by way of a demand draft drawn in favour of the respondent Bank under a covering letter. It so transpired that, on 25.07.2013, i.e. on the day just prior to the date of the auction, the principal borrower had filed an Original Application before the Tribunal questioning the sale. An interim order was passed therein to the effect that, while the auction can go on, there will be no confirmation of the sale. The said interim order came to be vacated on 14.10.2013. Thereafter, within four days thereof, namely, on 18.10.2013, respondent Bank wrote to the writ petitioner about this development and the writ petitioner was called upon to deposit the balance 75 per cent within a period of 15 days. Writ petitioner wrote letter dated 25.10.2013 (Annexure No. 6 to the writ petition), which we think it appropriate to quot....
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....de by client it is learnt that the Hon'ble DRT, Lucknow in SA no. 315/2013 vide its order dated 01.08.2013 has observed in its findings that in clause 12 of sale notice dated 18.06.2013, it is prescribed that "the successful bidder shall have to deposit 25% of sale price, adjusting the EMD already paid, within 48 hours of acceptance of bid price". The said condition of sale notice is against the Rule 9(3) of the Security Interest (Enforcement) Rules, 2002. It has been further observed by the Hon'ble Tribunal in its order that the Act 2002, provides that 25% amount to be deposited immediately, the Bank/FI cannot change the spirit of the Act and change according to its suitability. The Hon'ble Tribunal has clearly expressed that 25% of the sale price shall be deposited immediately and variance thereof will defeat the end of justice. These observation have been made by the tribunal in the order dated 01.08.2013." 3. It is, further, stated in the letter that the writ petitioner would not have entered into the bidding had the fact of defective sale notice and pending litigation challenging the auction become known to him before the commencement of the aucti....
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....rty Thousand) immediately. I do not want to get entangled in long drawn litigation and keep such a large amount of money blocked with uncertainity and be on tenterhook on account of illegality and suppression of material fact made by you for recovery in haste. You are therefore required to immediately refund the amount of Rs. 50,40,000=00 (Fifty Lacs Forty Thousand) with interest to me." 6. Respondent Bank sent letter dated 21.11.2013 in response to the same. Therein, it is, inter alia, stated as follows: "In this regards sufficient opportunity has already been provided to you and through this final communication you are once again advised to deposit the balance amount on or before 26.11.2013 otherwise the bank will be compelled to forfeit the earnest money so deposited with us by you as per terms of e-auction as well as SARFAESI Act. No further communication pertaining to above shall be entertained thereafter." 7. In response to the said letter, writ petitioner sent letter dated 25.11.2013. Therein, it is stated as follows: "Date: 25.11.2013 To, The Chief Manager Punjab National Bank Patel Nagar Branch Dehradun ....
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....s no positive response from the respondent Bank. Under Article 14 of the Constitution of India, the action of the Bank was scrutinized and, apparently, it did not pass muster. The learned Single Judge also noted that the reserve price fixed at Rs. 1,70,00,000/- was, apparently, inadequate, inasmuch as, in the previous auction, the highest amount, which was quoted by the writ petitioner, was Rs. 2,01,00,000/-. It is on this basis that the learned Single Judge proceeded to issue the following directions: "Consequently, writ petition succeeds and is hereby allowed. Re-auction held pursuant to the re-auction notice dated 05.03.2013 in favour of respondents no. 7 and 8 is hereby held invalid. Consequently, sale certificate dated 01.05.2014 issued in favour of respondent nos. 7 and 8 and sale deed executed in favour of respondent no. 7 and 8 on 27-05-2014 is hereby declared void and non est. Mandamus is issued against the Bank to execute sale deed in favour of the petitioner at the earliest, in any case, within two weeks from today. Bank shall be at liberty to withdraw Rs. 1,77,00,000/- deposited by the petitioner with the Registrar General of this Court. Bank is further directe....
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....bunal, which incidentally happened to be the very same date as when the auction was held for the first time. Learned Senior Counsel would emphasize the correspondence, which has already been referred to, to point out that the respondent Bank, immediately after the vacation of the interim order, wrote to the writ petitioner on 18.10.2013 and, again, on 28.10.2013; the respondent Bank was willing to give reasonable time; but the writ petitioner insisted on being given the right to make the balance payment after the final disposal of the case before the Tribunal. Learned Senior Counsel would point out that there is no such duty on the part of the respondent Bank to wait for the final disposal of the case. He would also submit that the reserve price has been fixed on the basis of the Bank's perception of what price would be fetched. In fact, he points out that the writ petitioner has not complied with the terms of the auction and has not deposited the balance amount even though his bid was Rs. 2,01,00,000/-. He also would point out to the lack of pleadings in the matter on the part of the writ petitioner. 15. Mr. Ramji Srivastava, learned counsel appearing for the writ petitioner, o....
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....id not militate against the holding of the auction, but the only rider was that the sale will not be confirmed. This order is passed by the Tribunal at Lucknow and the auction sale, it is to be noted, took place at Dehradun. It is not exactly clear as to at what time the order was passed and at what time the auction took place. We need not probe this matter further. The writ petitioner, on the next day, makes the deposit of the amount representing 25 per cent. Thereafter, the interim order was vacated on 14.10.2013 and nothing stood in the way of the writ petitioner depositing the balance amount or the respondent Bank accepting it and the sale being confirmed. It is, thereupon, that letter dated 18.10.2013 was issued by the respondent Bank giving 15 days' time to the writ petitioner and there was another communication dated 28.10.2013 also by the respondent Bank giving time. But the letters, which had been written by the writ petitioner thereafter, would show that the writ petitioner wanted the refund of the amount (see letter dated 01.11.2013). The respondent Bank's response comes in the form of letter dated 06.11.2013. Thereafter, we have referred to the correspondence. From the ....
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....would think that, while we recognise the duty on the part of the respondent Bank under Article 14 to act fairly, we cannot also, in the facts of this case, hold that the omission on the part of the respondent Bank in informing the writ petitioner about the pendency of the case before the Tribunal or the order passed, the contents of which we have already taken note of, would afflict the re-auction notice with an illegality. In terms of the conditions, quite clearly, the writ petitioner had failed to act in the manner provided under the terms of the auction notice, which were binding on the writ petitioner. In such circumstances, when the respondent Bank decides to go in for re-auction, we would think that it may not be appropriate to place the blame at the doorstep of the respondent Bank in judicial review proceedings or to interfere with the re-auction. 19. There remains question relating to reserve price. The reserve price fixed in the re-auction is about Rs. 51,00,000/- more than what was fixed in the first auction. The learned Senior Counsel for the respondent Bank would submit that the Bank officers had fixed the price on their perception of the price that would be fetched ....