TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 501
X X X X Extracts X X X X
X X X X Extracts X X X X
....3(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(hereinafter being referred to as the "Act 2002") was issued and thereafter assets of the borrower were taken into possession under Section 13(4) of the Act, 2002. In furtherance thereof, auction notice was published by the Bank on 18th June, 2013 with reserve price of Rs.1.19 crores inviting the bids in reference to the mortgage property of the borrower. 4. The appellant who was the successful bidder furnished his bid of Rs.2,01,00,000/on 22nd July, 2013 and deposited earnest money of Rs.11,19,000/as per the condition of the bid/auction which successful bidder has to deposit (25% of the bid amount) on acceptance of the bid and that was deposited on 27th July, 2013. 5. On 25th July, 2013, the borrower(third respondent) preferred an appeal before the Debt Recovery Tribunal, Lucknow(hereinafter being referred to as "DRT") assailing the auction notice dated 18th June, 2013. DRT vide order dated 26th July, 2013, after hearing the counsel for the borrower, passed an interim order directing that since auction is to be held on that day itself (i.e. 26th July, 2013), the Bank i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h, 2014. Immediately, when this fact came to the notice of the appellant, he approached the High Court by filing writ petition under Article 226 of the Constitution seeking Mandamus to withhold re-auction proceedings which has been initiated by the first respondent pursuant to notice dated 5th March, 2014 and further prayed directing the first respondent to execute the sale deed in favour of the appellant on deposit of the balance money of the auction bid or in alternative, refund the amount which the appellant had deposited pursuant to the auction proceedings initiated in reference to notice dated 18th October, 2013. 11. On the request made by the appellant, the High Court, by interim order permitted the re-auction proceedings to proceed further, but made the auction subject to the outcome of writ proceedings. It reveals from the record that in the pending proceedings before the High Court, to test bona fides of the appellant, the High Court directed the appellant to deposit Rs.1.77 crores, after adjustment of the sum already deposited with 10% interest, which indisputedly the appellant deposited on 10th March, 2015. It is informed that the highest bid of Rs.1,70,50,000/in re-auc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been committed in the decision making process adopted by the first respondent, there appears no reason to set aside the re-auction proceedings initiated in reference to notice dated 5th March, 2014 and accordingly while upholding the re-auction proceedings directed the first respondent to return the sum of Rs.1.77 crores which was deposited by the appellant pending proceedings with accrued interest before the learned Single Judge of the High Court and so far as the amount which stands forfeited, liberty was granted to the appellant to avail appropriate remedy for recovery as admissible under the law. The operative part of the order of the Division Bench of the High Court dated 10th March, 2016 is quoted hereunder: " The upshot of the above discussion in that the appeal filed must be allowed; the directions issued by the learned Single Judge must be set aside; and the writ petition must be dismissed. However, we would think that, in regard to the question about the forfeiture of Rs.50,00,000/which has been effected by the respondent Bank, we should leave it open to the writ petitioner to seek appropriate remedy before the competent forum, if advised. The amount, however, deposite....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the appellant was of Rs.2.01 crores but because of the litigation, the highest bid in the subsequent auction proceedings pursuant to notice dated 5th March, 2014 was of Rs.1,70,50,000/. Thus, it was because of the appellant the distress value of the property was deflated and thus it is only the appellant who is responsible to bear the loss and if the first respondent is directed to refund the money forfeited, it may be in contravention to Rule 9(5) of Rules, 2002, thus the finding returned by the Division Bench of the High Court needs no interference. 21. We have heard learned counsel for the parties and with their assistance perused the material available on record. 22. We have already noticed the narration of facts but it will be apposite to summarise for better appreciation. The auction notice, in the first instance, was published on 18th June, 2013 with the reserve price of Rs.1.19 crores and the appellant's bid of Rs.2.01 crores was the highest. The earnest money of Rs.11.19 lakhs was deposited on 22nd July, 2013 and the bid was finalized on 26th July, 2013 and 25% of the bid in terms of the auction notice of Rs.38.35 lakhs was deposited by the appellant on 27th July, 2013....