TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 447
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the borrower before the learned Debt Recovery Tribunal (DRT) is restored to its original number to be heard on merits, the appellant herein Bank of Baroda - financial institution - secured creditor has preferred the present appeal. 2. The facts leading to the present appeal in nutshell are as under: 2.1 That the appellant herein - bank granted term loan of Rs. 100 lakhs and cash credit limit of Rs. 95 lakhs to the respondent - borrower (hereinafter referred to as the borrower) against the security of two mortgaged properties namely (i) industrial plot situated at Chittor Road, Bundi measuring 500 Sq.Mtrs. and (ii) a residential/housing property situated at 1Ja27, Vikas Nagar, Bundi measuring 198 Sq.Mtrs. That the borrower failed to repay the term loan as per the terms and conditions of the agreement. The account of the borrower became NPA on 31.10.2012. A notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act, 2002) dated 07.01.2013 was served upon the borrower demanding a sum of Rs. 1,85,37,218.80/The bank took symbolic possession of the immovable prop....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perty provided the borrower is ready to pay a sum of Rs. 71 lakhs which is the highest bid available with the bank. It was submitted that even this amount would not ultimately go to discharge the entire liability outstanding against the borrower but still if the borrower deposits Rs. 71 lakhs, the bank may not find difficulty to release the subject property in question. 2.4 The DRAT dismissed the appeal by observing that as the reserve price was Rs. 48.65 lakhs which the borrower deposited and the bank had received the bids ranging from Rs. 61.50 lakhs to Rs. 71 lakhs and the alleged bidders failed to deposit the earnest money and when the borrower is ready to purchase the said property for Rs. 71 lakhs no fault can be found with the order passed by DRT. The order passed by the DRAT dismissing the appeal preferred by the bank was the subject matter of challenge before the learned Single Judge. The learned Single Judge set aside both the orders of DRT and DRAT vide its judgment and order dated 12.01.2017 primarily for the reason that the said orders were in contravention of Section 13(8) of the SARFAESI Act, 2002. The judgment and order passed by the learned Single Judge was challe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt and it is understood that on deposit of Rs. 71 lakhs the bank agreed that the borrower be discharged from his entire liability outstanding against him. 3.3 It is further submitted that the Division Bench of the High Court has also not property appreciated that the offer of Rs. 71 lakhs in the auction was received in the year 2013/2014 and thereafter the valuation has increased. It is submitted that even the outstanding dues have also gone up which was Rs. 1,85,37,218.80/as on 07.01.2013. It is submitted that therefore the Division Bench of the High Court has materially erred in treating and/or considering Rs. 71 lakhs as sale/purchase price and/or the value of the residential property. It is submitted that therefore when the Division Bench of the High Court passed the judgment and order if the property could have been auctioned it would have fetched much more price than Rs. 71 lakhs. It is submitted that on deposit of Rs. 71 lakhs only the borrower cannot be discharged from his entire liability. It is submitted that the impugned judgment and order passed by the Division Bench of the High Court is just contrary to Subsection (8) of Section 13 of the SARFAESI Act, 2002. It is s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Making the above submissions it is prayed to allow the present appeal. 4. The present appeal is vehemently opposed by Mrs. Christi Jain learned counsel appearing on behalf of the respondents - borrowers. 4.1 It is vehemently submitted by learned counsel appearing on behalf of the borrower that as the highest bid received by the bank in the public auction was Rs. 71 lakhs which the borrower agreed to deposit/pay and even earlier the borrower deposited a sum of Rs. 48.65 lakhs as per the order passed by the DRT dated 17.01.2014, thereafter when the Division Bench of the High Court has directed the bank to release the residential property on deposit of a further sum of Rs. 17 lakhs (total making it Rs. 65.65 lakhs) and thereafter has directed to handover the original title deeds to the borrower, the impugned judgment and order passed by the High Court is equitable order which does not warrant any interference by this Court in exercise of powers conferred under Article 136 of the Constitution of India. 4.2 It is submitted that even the learned counsel appearing on behalf of the appellant - bank agreed that on payment of a total sum of Rs. 65.65 lakhs the property in question may be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orrower or debtor to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease assignment or sale of the secured assets. In the present case though as on 07.01.2013 the dues were Rs. Rs. 1,85,37,218.80/and without the secured property was sold in a public auction the Division Bench of the High Court has directed to release the mortgaged property and handover the possession along with original title deeds to the borrower on the borrower depositing/paying a total sum of Rs. 65.65 lakhs only. At this stage, it is required to be noted that Rs. 65.65 lakhs was not the amount realized by selling the mortgaged property in a public auction. It was only a highest bid received and before any further auction proceedings were conducted, the DRT passed an interim order directing to handover the possession and handover the original title deeds on payment of Rs. 48.65 lakhs which was the base price, which was the subject matter before the DRAT and before the learned Single Judge. Therefore, the borrower did not deposit and was not ready to deposit the entire amount of due....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red property where the borrower deposits entire dues that was Rs. 1,85,37,218.80/as on 07.01.2013 with the secured creditor. Therefore, the DRT in its order dated 17.01.2014 which as such was an interim relief order pending the appeal under Section 17 of the SARFAESI Act was not justified in directing to release the mortgaged property and handover the possession along with the original title deeds to the borrower on payment of Rs. 48.65 lakhs only which was the base price/ reserve price, which the Division Bench of the High Court has increased to Rs. 65.65 lakhs on the ground that the highest bid received was Rs. 71 lakhs (which was not materialized as the highest bidder did not come forward). Unless and until the borrower was ready to deposit/pay the entire amount payable together with all costs and expenses with the secured creditor, the borrower cannot be discharged from the entire liability outstanding. Therefore, as such no order could have been passed either by the DRT and/or by the Division Bench of the High Court to discharge the borrower from the entire liability outstanding and to discharge the mortgaged property and handover the possession along with original title deeds....