Jharkhand High Court
M/S. Bhaskar Electric Company vs Central Bank Of India on 20 February, 2024
Author: Deepak Roshan
Bench: Rongon Mukhopadhyay, Deepak Roshan
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No. 32 of 2022
M/s. Bhaskar Electric Company, through one of its Partners, Sushma Devi,
wife of Sri Rajendra Singh, aged about 52 years, resident of Dutta Lane, New
Area, Morabadi, P.O. and P.S. Bariatu, Town and District Ranchi.
... Appellant
Versus
1. Central Bank of India, having its Central Office at Chandramukhi,
Nariman Point, P.O. & P.S. Nariman Point, Mumbai, State Maharashtra, PIN
400021, through its Chairman-cum-Managing Director.
2. Assistant General Manager (Recovery), Central Bank of India,
having its Central Office at Chandramukhi, Nariman Point, P.O. & P.S.
Nariman Point, Mumbai, State Maharashtra, PIN 400021.
3. Zonal Manager, Central Bank of India, Zonal Office, 2nd Floor,
Maurya Complex, Dak Bungla Road, P.O. and P.S. Patna, District Patna,
State-Bihar, PIN 800001.
4. Regional Manager, Central Bank of India, Regional Office, 2nd
Floor, Krishna Arcade, Booty More, P.O. RIMS, P.S. Sadar, District Ranchi,
State-Jharkhand, PIN 834001.
5. Branch Manager, Central Bank of India, Main Road Branch, Main
Road, P.O. - G.P.O., P.S. Kotwali, Town and District Ranchi, PIN 834003.
6. Authorized Officer, Central Bank of India, Regional Office, 2nd
Floor, Krishna Arcade, Booty More, P.O. RIMS, P.S. Sadar, District Ranchi,
State-Jharkhand, PIN 834001.
7. M/s. Vinayak Support Service (Pvt) Limited, having its office at 2F,
Vatika Apartment, Line Tank Road, P.O. - G.P.O., P.S. Kotwali, Town and
District Ranchi, PIN 834001. ... Respondents
......
CORAM: Hon'ble Mr. Justice Rongon Mukhopadhyay
Hon'ble Mr. Justice Deepak Roshan
......
For the Appellant : Mr. Ajay Kumar, Advocate
Mr. Ashish Verma, Advocate
For Resp. Nos. 1 to 6 : Mr. P.A.S. Pati, Advocate
For the Resp. No.7 : Mr. Sumeet Gadodia, Advocate,
Mrs. Shilpi Sandil Gadodia, Advocate,
Mr. Ritesh Kumar Gupta, Advocate
Ms. Shruti Kumari.
......
2
Reserved on: 08.02.2024 Delivered on .20.02.2024
JUDGMENT
Per Deepak Roshan, J: Heard learned counsel for the parties.
2. Instant Memo of Appeal is directed against the Judgment and order dated 20.12.2021passed in W.P.(C) No. 2696 of 2019, wherein Hon'ble Single Judge has dismissed the writ application and has refused to interfere with the order passed by Debts Recovery Appellate Tribunal in Appeal Serial No. 31/2018 and has also affirmed the finding of the Debts Recovery Tribunal at Ranchi in S.A. No. 13/2018 and has also refused to set aside the Sale Certificate dated 23.02.2018 issued in favour of Respondent No.7- Auction Purchaser including E-auction Sale dated 16.02.2018 wherein the mortgaged property of the Appellant with Respondent-Bank has been sold pursuant to E-auction. Details of the property which was mortgaged and auction sold are as under:-
(a) E.M. of landed property of Sri Rajendra Singh, Sale Deed No. 1955 dated 11.04.1997, M.S. Plot No. 82, Khata No. 55/52, Thana No. 192, Village-Morabadi, P.S. Bariatu, District Ranchi, measuring an Area of 5.5 Katha.
(b) E.M. of landed property of Smt. Sushma Devi, Sale Deed No. 2140 dated 22.04.1997, M.S. Plot No. 82, Khata No. 55/52, Thana No. 192, Village Morabadi, P.S. Bariatu, District Ranchi, measuring an Area of 5.5 Katha.
Bounded by: North - Plot No. 81, South - Part of Plot No. 81, East - Part of Plot No. 81, East - Part of Plot No. 83, West - Asha Sahay & Private Road.
3. The brief facts of the case are that the appellant is a partnership firm and for running its business, it approached the Respondent-Bank for sanction of loan and, accordingly, on 10.11.1997 initially, credit facility of Rs. 110 Lakhs was sanctioned which was further enhanced to Rs. 120 Lakhs on 16.02.1998 and again enhanced to Rs. 147 Lakhs on 14.09.2000. Said credit limit was reduced from 147 Lakhs to 120 Lakhs on 01.04.2002.
4. Account of the Appellant was classified as Non-Performing Asset (NPA) on 31.03.2004 and Respondent-Bank instituted an Original Application being O.A. No. 04 of 2006 before the Debts Recovery Tribunal, Ranchi for recovery of an amount of Rs. 1,87,03,430.37/- along with interest and cost. Respondent-Bank also instituted proceedings under the SARFAESI 3 Act and issued Notice dated 05.05.2007 under Section 13(2) of the SARFAESI Act. Thereafter, the Authorized Officer of the Bank also issued Possession Notice dated 03.08.2007 in terms of Rule 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as 'Rules of 2002' for short).
5. Appellant, being aggrieved by aforesaid action, preferred SARFAESI Appeal being S.A. No. 18 of 2007 before the Debts Recovery Tribunal, Ranchi, which was allowed vide order dated 21.10.2010 primarily on the ground that Possession Notice was issued without disposal of the representation of the Appellant as amended under Section 13(3) of the SARFAESI Act. Thereafter, a fresh notice under Section 13(2) of the SARFAESI Act was issued on 23.02.2011 in compliance to the order passed by Debts Recovery Tribunal, Ranchi wherein Appellant-Borrower including its Guarantor was directed to deposit a sum of Rs. 2,82,31,947/- plus interest within a period of 60 days, failing which, it was indicated in the notice that appropriate steps under Section 13(4) of the SARFAESI Act would be initiated against the Appellant. It may be noted here that no representation was put forth pursuant to notice dated 23.02.2011 in terms of the provisions laid in Section 13(3)(a) of the SARFAESI Act.
6. Thereafter, Possession Notice under Section 13(4) of the SARFAESI Act was issued along with pasting of Possession Notice in compliance of Rules 8 and 9 of the Rules of 2002. Possession Notice was even published in Newspapers namely, 'Dainik Bhaskar' and 'Times of India'.
7. After issuance of the Possession Notice with respect to the mortgaged property, Appellant approached the Bank for settlement of outstanding dues for a sum of Rs. 212 Lakhs, which was duly sanctioned by the Bank in terms of its letter dated 15.03.2012. However, despite settlement being arrived at, Appellant failed to adhere to the said Settlement Scheme, which compelled the Bank to take physical possession of the property by exercising powers under Section 14 of the SARFAESI Act by filing an application before the Deputy Commissioner, Ranchi. Appellant filed a writ application before this Hon'ble Court being W.P.(C) No. 4799 of 2013 along with Interlocutory application being I.A. No. 8034 of 2013, wherein it prayed for restoration of the physical possession of the mortgaged property of the Appellant. It may be indicated herein that on 21.09.2013 itself, physical 4 possession of the property was taken by Respondent-Bank and when aforesaid I.A. No. 8034 of 2013 was taken up for consideration by Single Judge of this Court, after noticing the fact that possession of the property has already been taken over by Bank, Hon'ble Single Judge was pleased to dismiss the said Interlocutory application.
8. Thereafter, the Appellant-Borrower, in O.A. No. 04 of 2016, prayed for stay of SARFAESI action on the ground that its OTS proposal was accepted by the Bank vide letter dated 15.03.2012. Said I.A. for stay of SARFAESI action was dismissed by Debts Recovery Tribunal, Ranchi vide order dated 05.12.2013 and against the said action including the order dated 05.12.2013 passed by DRT, Ranchi, Appellant preferred another writ application before this Court being W.P.(C) No. 7425 of 2013. Said writ application was taken up for consideration by this Court on 07.01.2014 and this Court passed an interim order staying further proceedings of O.A. No. 04 of 2006 pending before DRT, Ranchi.
9. Aforesaid interim order passed by this Court was challenged by Respondent-Central Bank of India by preferring an Appeal being L.P.A. No. 123 of 2014 and the said Intra court Appeal was disposed of by this Hon'ble Court vide order dated 2nd December, 2014, wherein stay granted by Hon'ble Single Judge dated 7th January, 2014 was directed to be continued only if the Appellant deposits a sum of Rs. 1.00 Crore by the next date fixed before the writ court, failing which, it was observed that stay shall be deemed to have been vacated.
10. Admittedly, Appellant did not deposit the amount of Rs. 1.00 Crore in terms of the aforesaid order dated 2nd December, 2014 passed in L.P.A. No. 123 of 2014 and, instead, filed a Modification application being C.M.P. No. 421 of 2014 before Division Bench of this Court for modification of the order. A Coordinate Bench of this Court, vide order dated 16th December, 2014, did not entertain the said modification application and, accordingly, said C.M.P. No. 421 of 2014 was dismissed by this Court vide order dated 16th December, 2014.
11. Thereafter, Writ Petition being W.P.(C) No. 7425 of 2013 was taken up for consideration by Single Judge of this Hon'ble Court and Hon'ble Single Judge dismissed the writ application by specifically observing, inter alia that compromise offer dated 15.03.2012 failed because Appellant did not 5 make payment in terms of the OTS proposal and, even after a lapse of three years from the date of said OTS Scheme being approved by the Bank, Appellant was unable to show its bona fide, in as much as, Appellant even failed to deposit Rs. 1.00 Crore as ordered by Division Bench of this Court, which shows lack of bona fide and incapability of the Appellant to make payment of the due amount.
12. It may be noted here that in the meantime, Respondent-Bank made several attempts to sell the mortgaged properties by series of E-auctions dated 13.03.2014, 20.03.2015, 16.09.2015 and 31.08.2016, but it failed in its attempt in absence of any adequate response.
13. Respondent-Bank once again issued an E-auction Sale Notice on 11.01.2018 and said Sale Notice was published in two prominent Newspapers namely, 'Times of India' and 'Prabhat Khabar' and Sale Notice was also duly pasted over the property under sale on 11.01.2018 in compliance of Rules of 2002. Auction Sale Notice was also dispatched to the Appellant including its Partners in terms of Rule 8(6) of the Rules of 2002 and the same has been delivered to the Borrowers on 13.01.2018 and 15.01.2018 as per the delivery report.
14. It is, at this stage, that Appellant again addressed a letter to the Chief Manager, Branch Office, Main Road Branch, Ranchi again offering for settlement of its dues under Special OTS Scheme promulgated by Respondent-Bank vide its Circular No. 1835 dated 15.01.2018 and offered a sum of Rs. 132 Lakhs for settlement of the amount of loan. Although said letter was addressed to the Chief Manager, Branch Office, Main Road, Ranchi, copies thereof were also marked to Regional Officer/Corporate Office. The General Manager (Recovery) of the Corporate Office of Respondent-Bank made an internal communication dated 19.01.2018, addressed to Zonal Manager, Patna, indicating inter alia that Head Office has accepted the proposal of OTS and asked the opinion of the Zonal Manager, Patna regarding said OTS settlement. The Zonal Manager, vide its letter dated 20th January, 2018, addressed to General Manager (Recovery), suggested for deferring the OTS proposal of the Appellant at least till 16.02.2018 on the premise that mortgaged properties were scheduled to go for E-auction, the success of which may generate more recovery than the OTS amount. Accordingly, Appellant was informed, vide letter dated 6 23.01.2018 issued by Regional Manager, that OTS proposal of the Appellant cannot be considered till such time the auction process is completed.
15. Being aggrieved by aforesaid communication, Appellant filed another writ application before this Hon'ble Court being W.P.(C) No. 662 of 2018 praying therein for setting aside the E-auction Sale Notice dated 11.01.2018 on the ground that its OTS proposal should be considered first by the Bank and thereafter only the properties should be put to E-auction. Said writ application was not entertained by this Court and vide order dated 15.02.2018, the writ application was dismissed on the ground of alternative remedy available to the Appellant of Appeal under Section 17 of the SARFAESI Act before the DRT, Ranchi. In the meantime, pursuant to E- auction Notice, auction sale was conducted on 16.02.2018; and private Respondent No.7-M/s. Vinayak Support Service (Pvt) Ltd. was declared as successful bidder in respect of the above-mentioned mortgaged properties for an amount of Rs. 1,74,37,000/-. The sale in favour of Respondent No.7 was duly confirmed by Respondent-Bank and even Sale Certificate dated 23.02.2018 was issued in its favour.
16. Appellant, being aggrieved by aforesaid action of the Bank, preferred an appeal under Section 17 of the SARFAESI Act before Debts Recovery Tribunal, Ranchi which was registered as S.A. No. 13 of 2018, wherein Appellant primarily challenged the E-auction Sale Notice issued by the Bank. However, it may be noted herein that in the said SARFAESI Appeal filed by Appellant, neither Auction Purchaser i.e. Respondent No.7 was impleaded as party-Respondent, nor Sale Certificate and/or confirmation of sale in favour of Respondent No.7 was challenged by the Appellant.
17. Respondent-Bank appeared in aforesaid SARFAESI Appeal being S.A. No. 13 of 2018 and filed its Counter Affidavit and annexed all relevant documents necessary to ascertain where Bank has complied with all mandatory provisions of the SARFAESI Act and Rules made thereunder. After hearing the Appellant and Respondent-Bank, said S.A. No. 13 of 2018 was dismissed vide order dated 27.02.2018.
18. The legality and propriety of the order dated 27.02.2018 passed in S.A. No. 13 of 2018 was challenged by Appellant by filing an Appeal before Debts Recovery Appellate Tribunal, Allahabad which was registered as 7 Appeal Serial No. 31 of 2018 and the said Appeal was also dismissed by DRAT, Allahabad vide order dated 10.04.2019.
19. Thereafter, Appellant preferred a writ application before this Hon'ble Court assailing the order passed by DRAT, Allahabad and DRT, Ranchi vide W.P.(C) No. 2692 of 2019. Said writ application was dismissed by the Single Judge vide its judgment and order dated 20.12.2021 and against the said order present L.P.A. has been preferred by the Appellant.
20. Mr. Ajay Kumar, learned counsel for the appellant, assisted by Mr. Ashish Verma, learned counsel, has assailed the order of Hon'ble Single Judge by raising various points (some of which were not even argued before Hon'ble Single Judge) and has contended, inter alia, as under: -
(i) It has been argued that Sale is vitiated because the Bank has not given the Borrower an opportunity to redeem under section 13(8) of the SARFAESI Act which has been amended in the year 2016. It has been vehemently argued that after the amendment made under Section 13(8) of the SARFAESI Act, there is requirement under law of maintaining a gap of 30 days between individual notice of redemption and auction notice published in Newspapers, but said provisions have not been complied with by the Bank and, straightaway, Bank, on 11.01.2018, issued both, individual notice and newspaper publication, which is contrary to the mandate of the amended Section 13(8) of the SARFAESI Act read with Rule 8(6) and Rule 9(1) of the Rules of 2002. Reliance in this regard has been placed upon a Division Bench Judgment of Hon'ble Andhra Pradesh High Court in Writ Petition No. 8155 of 2018 (Sri Sai Annadhatha Polymers vs. Canara Bank) dated 27th June, 2018, to contend inter alia that in view of amendment carried out under Section 13(8) of the SARFAESI Act, there should be a gap of 30 days between individual notice and auction notice published in Newspapers. Further reliance has been placed upon a recent decision of Hon'ble Supreme Court in the case of Celir LLP Vs. Bafna Motors, reported in (2023) SCC OnLine SC 1209, to contend inter alia that ratio of the Judgment of Hon'ble Andhra Pradesh High Court has been approved by Hon'ble Supreme Court in the aforesaid Judgment in Celir LLP (supra).8
(ii) It has been further argued that Sale is also vitiated for conducting it simultaneously without disposing of the OTS proposal in terms of the conditions contained in Circular No. 1835 dated 15.01.2018. It has been contended on behalf of the Appellant that once Appellant's account was found eligible for consideration of its OTS proposal, the same was required to be disposed of strictly in terms of the Circular issued by the Bank, and deferring the OTS proposal of the Appellant till E-auction is being held, is contrary to the settled proposition of law as has been declared by Hon'ble Apex Court in the case of Sardar Associates vs. Punjab & Sind Bank, reported in (2009) 8 SCC 257 Reliance in this regard is also placed to a Judgment dated 8th February, 2023 of Hon'ble High Court of Judicature at Bombay, Bench at Aurangabad, in Writ Petition No. 3006 of 2018, to contend inter alia that it is not open for Respondent-
Bank not to consider the OTS proposal of the Appellant pursuant to the Circular issued by it.
(iii) It has been further argued that Sale is vitiated by material irregularity in valuation of secured asset and the auction sale thereupon. It has been argued that copy of Valuation Report was not served upon the Borrower-Appellant before finalizing the reserve price and without having Borrower objection on the reserve price, which is violative of Rule 8(5) of the SARFAESI Rules. It has been further argued that not only auction sale was conducted by grossly undervaluing the property, but said auction sale was conducted in great hurry without even granting opportunity to the Appellant to redeem under Section 13(8) of the SARFAESI Act which smacks of mala fide and collusion in conduct of auction sale between Respondent-Bank and Auction Purchaser.
(iv) Further, it has been argued that if the Sale Certificate is not registered within four months from the date of its issuance, the same cannot be acted upon and does not amount to creating any conveyance. It has been further argued that Section 13(2) Notice was invalid, as it failed to give details of calculation and total demand amount and denied the Appellant-Borrower to raise an effective objection under Section 13(3A) of the SARFAESI Act.
921. Relying upon the aforesaid grounds, Mr. Ajay Kumar, counsel for the Appellant prayed for setting aside the order of the Single Judge and, consequently, the orders passed by DRT, Ranchi and DRAT, Allahabad, wherein they have upheld the action of Respondent-Bank regarding auction sale of the properties.
22. Per contra, Mr. P.A.S. Pati, Advocate appearing for Respondent- Bank has vehemently opposed the submissions advanced on behalf of the Appellant and has contended, inter alia, that Appellant has approached this Court in exercise of power under Article 226 of the Constitution of India seeking judicial review of the orders passed by DRT and DRAT and the scope of power of judicial review has been well defined by Hon'ble Courts in a catena of decisions. It has been submitted that the High Court while exercising the powers of Writ of Certiorari would not assign to it the role of an Appellate Court and step into re-appreciating the evidence and substitute its own finding in place of those arrived at by the trial court. Mr. Pati has extensively referred to the order dated 27.02.2018 passed by DRT, Ranchi and the order dated 10.04.2019 passed by DRAT, Allahabad and has contended that Appellant is trying to expand the scope of judicial review of this Court by arguing points/issues which were never argued either before DRT, Ranchi or DRAT, Allahabad. It has been submitted that from perusal of the order passed by DRT, Ranchi dated 27th February, 2018, it would be evident that appellant filed the said Appeal under Section 17(1) of the SARFAESI Act for quashing of the Auction Sale Notice dated 11.01.2018 as well as Demand Notice dated 23.02.2011 and Possession Notice dated 25.08.2011.
23. It has been submitted that Appellant, although raised the points before DRT, Ranchi that Demand Notice and Possession Notice dated 23.02.2011 and 25.08.2011 were not served upon the Appellant, but said points were expressly given up by Appellant which is recorded in Para-4 of the order of appeal. By referring to the order passed by DRT, it has been contended that Appellant, before DRT, has never argued the point regarding redemption under Section 13(8) of the Amended Act, 2016 and before DRT, despite being aware that property has already been auction sold and Sale Certificate has been issued in favour of Respondent No.7, Appellant has neither challenged the order of auction sale nor impleaded the Auction 10 Purchaser as Respondent before DRT, Ranchi. It is in that background that DRT, vide its order at Para-7 has held as under: -
"Having considered all aspect of the case on merit, the DRT is of the view that the appellant is not entitled to any relief prayed for. The actual sale has not been questioned nor is there any prayer against delivery of possession of the security to the purchaser. A purchaser is a necessary party to a case provided any order is likely to be passed against him. But nothing of that kind has happened. The DRT after hearing the parties, on record, did not feel the necessity of having the presence of purchaser as a party in whose favour the sale has been confirmed and sale deed executed on full payment of price."
24. Further, by referring to order of DRAT, it was argued that even before the Appellant Tribunal, Appellant did not take any steps for amendment of its appeal in terms of provisions of Order 41, Rule 17 of the Code of Civil Procedure and contested the Appeal without even impleading the Auction Purchaser as a Respondent. Further, it has been submitted that before DRAT also, Appellant did not argue the point of redemption under the amended provisions of Section 13(8) of the SARFAESI Act and the main thrust of argument before DRT was with respect to valuation of the property and said argument of the Appellant was rightly rejected by DRT vide order dated 10.04.2019 while observing at Para-17 as under: -
"17. So far as the valuation of the property is concerned, though it was pleaded that the appellant has failed to demonstrate that how the property was undervalued. No contrary valuation report was produced before the Tribunal below nor any other proof of circle rate, higher than the present one was furnished. Thus, it cannot be said that the property was not properly valued or the reserve price was not fixed at the prevailing rate."
25. It has been further vehemently argued that the Appellant has rightly not raised the point of redemption under Section 13(8) filed before DRT and DRAT, as the said point was not available to the Appellant. It has been stated that the amendment carried out under Section 13(8) of the SARFAESI Act is with effect from 15.01.2013 and the effect of the aforesaid amendment is rather restrictive in nature, wherein earlier provision of Section 13(8) which allowed the Borrower to claim for redemption of property until the time fixed for sale or transfer was restricted and the right of redemption could have been availed by the Borrower under the amended provisions at any time before the date of publication of notice for public auction or invitation of quotations.
1126. It has been vehemently submitted that not even a single letter has been written by the Appellant to Respondent-Bank regarding redemption in terms of Section 13(8) of SARFAESI Act either before amendment or after the amendment. It has been submitted that from the conduct of the Appellant, it would be evident that Appellant is trying to mix up the issue of OTS settlement with that of redemption, which are totally different and distinct with each other.
27. It has been argued that possession was taken by Respondent-Bank of the mortgaged asset as far back as on 25.08.2011 and even physical possession was taken on 21.09.2013 and at no point of time, Appellant prayed for redemption of the mortgaged property by payment of all dues, interest, etc. to the Bank. It has been further submitted that, in fact, Bank earlier repeatedly attempted to sell the mortgaged property through series of E-auctions dated 13.03.2014, 20.03.2015, 16.09.2015 and 31.08.2016, but failed in its attempt in absence of adequate response.
28. It has been submitted that all along the Appellant, as and when auction sale notice was issued, used to approach the Respondent-Bank with a proposal for One Time Settlement only with an intent to stall the auction process. It has been submitted that earlier, vide order dated 15.03.2012, proposal of the Appellant for settlement of the amount through OTS for a sum of Rs. 212 Lakhs was sanctioned by the Bank, but Appellant failed to honour the said commitment and instead, approached the Writ Court by filing Writ application being W.P.(C) No. 7425 of 2013. The counsel for the Respondents vehemently relied upon the Judgment and order dated 25.02.2015 passed by Hon'ble Single Bench in W.P.(C) No. 7425 of 2013, wherein Hon'ble Single Judge has given specific finding that no direction for compromise proposal can be given to Respondent-Bank and also gave specific finding of lack of bona fide of the Appellant.
29. It has been further contended that when present Auction Sale Notice was published on 11.01.2018, Appellant once again approached the Bank for OTS settlement and offered a sum of Rs. 132 Lakhs. The said OTS settlement was also addressed to General Manager, Headquarters of Respondent-Bank, which made communication with the competent authority i.e. Zonal Manager, Patna regarding consideration of OTS proposal of the Appellant. Zonal Manager, Patna, specifically, vide its letter dated 12 20.01.2018, informed to Headquarters that OTS proposal of the Appellant cannot be accepted as the mortgaged assets have been put to auction and likely to generate more revenue than the OTS amount and, accordingly, Appellant, vide its letter dated 23.01.2018, was communicated that its OTS proposal cannot be considered till such time the E-auction process is completed. It has been emphatically argued that no Borrower can claim, as a matter of right, that its OTS proposal should be accepted and/or considered by Bank. In this regard, reliance has been placed upon decision of Hon'ble Apex Court in the case of 'Bijnor Urban Cooperative Bank Ltd. & Ors. Vs, Meenal Agarwal & ors', reported in (2023) 2 SCC 805 as well as the decision of Hon'ble Supreme Court in the case of 'State Bank of India Vs. Arvindra Electronics Private Limited, reported in (2023) 1 SCC 540 (Paras 14 to 18 & 22), to substantiate the aforesaid contention.
30. With regard to valuation of the property in question, it has been submitted by learned counsel for the Respondent-Bank that the property was valued by a registered Valuer and, in terms of Rule 5 of the Rules of 2002, there is no requirement of consultation with the Borrower for fixation of the reserve price of the assets.
31. It has been submitted that Valuation Report of the registered Valuer was duly approved in the meeting of the Settlement Advisory Committee of Respondent-Bank, dated 08.01.2018, which comprise of Sr. Officials of the Bank including officers of the level of Chief Manager and Regional Manager.
32. It has further been submitted that DRAT, Allahabad, in its order has specifically noted that although Appellant tried to dispute the Valuation Report, but did not lead any evidence nor made any pleadings as to how the property was undervalued and, under the said circumstances, a finding of fact was rendered by DRAT declaring therein that it cannot be said that property was not properly valued or reserve price was not fixed at the prevailing rate.
33. It has been contended that this Court, in exercise of power under judicial review, would normally not interfere with such finding of fact being rendered by the Tribunal unless such finding of fact is perverse and not borne out of record.
34. It has been contended that even in the present Appeal, except vague averment that the property was undervalued in alleged connivance with 13 private Respondent, no document and/or Valuation Report has been brought on record to even suggest that there has been undervaluation of the property. It has been vehemently argued that the conduct of the Appellant since very beginning was not bona fide and although physical possession of the property was taken as far back as on 21.09.2013, Appellant, through its Partner, on the strength that its partners were residing over the adjacent plot, has re-entered into the mortgaged property without any authority of law.
35. It has been vehemently submitted that the case of the Appellant should be dismissed with exemplary cost.
36. Mr. Sumeet Gadodia, counsel appearing for Auction Purchaser (Respondent No.7), at the outset, has adopted the arguments advanced on behalf of Respondent-Bank and has further invited attention of this Court to the orders passed by DRT, Ranchi and DRAT, Allahabad.
37. It has been submitted that Auction Purchaser was neither impleaded as party-Respondent before DRT nor any application for impleading the Auction Purchaser was filed at the Appellate stage by the Appellant and, on this ground alone, Appeal of the Appellant is liable to be dismissed.
38. It has been submitted that Appellant, although did not implead the Auction Purchaser as Party-Respondent before DRT and DRAT, but, interestingly, at the time of filing of the writ petition being W.P.(C) No. 2696 of 2019, impleaded the Auction Purchaser as Respondent No.7 without even taking leave of the Court. In fact, in the writ application, vide para-51, the Appellant has pleaded that it is not obliged to implead the Auction Purchaser. For the sake of ready reference Para-51 of the writ petition is quoted herein- below: -
"51. That the Petitioner was not obliged to implead auction purchaser as a party respondent to the proceeding pending before the DRT, Ranchi, especially in view of the fact that the petitioner has challenged the sale notice pursuant to which the auction sale was conducted at the instance of the bank."
39. Mr. Gadodia further, while placing reliance upon the Judgment of Hon'ble Apex Court in the case of Celir LLP (supra), has submitted that the effect of the amendment carried out under Section 13(8) of SARFAESI Act was considered by Hon'ble Apex Court in its aforesaid Judgment and in Para 105(iii), Hon'ble Apex Court has observed, inter alia, that in un-amended Section 13(8) of SARFAESI Act, right of the Borrower to redeem the 14 secured asset would be available till the sale or transfer of said asset, whereas amended provision of Section 13(8) of SARFAESI Act makes it clear that the right of the borrower to redeem the secured asset stands extinguished on the very date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002.
40. While relying upon the aforesaid decision of Hon'ble Apex Court, it has been contended by learned counsel for the Auction-purchaser that it is in the aforesaid background of amended provision of Section 13(8) of SARFAESI Act, Hon'ble Andhra Pradesh High Court, in its Judgment in the case of Sri Sai Annadhatha Polymers and anr. (supra), has held that before publishing of Auction Notice, an opportunity for redemption is required to be given to the Borrower. However, it has been vehemently submitted that ratio of the aforesaid Judgment would not be applicable in the facts and circumstances of the present case, as in the present case, possession of the property was taken as far back as in the year 2011 and even physical possession of the property was taken on 21.09.2013 and, thereafter, the Bank tried to conduct auction of the property by series of E-auctions, but it failed.
41. It has further been argued that the point regarding redemption was never argued at any stage by the Appellant and, for the first time, said point was argued before Hon'ble Single Judge, which has rightly been rejected by Hon'ble Single Judge. It has been further submitted that the Bank, in fact, in its 5th attempt has been successful in getting the property auctioned, wherein Respondent No.7 was successful.
42. It has been submitted that Bank account of the Appellant has been classified as NPA as far back as on 31.03.2004 and almost after a lapse of a period of 20 years, Appellant has not discharged the liability of the Bank and is resorting to one or the other litigations just in order to stall the auction process and, accordingly, it has been prayed that Appeal of the Appellant should be dismissed with exemplary cost.
43. It has been submitted that Respondent No.7 is already in possession of the property and has invested substantial sum of money as far back as in the year 2018 of a sum of Rs. 1,74,37,000/- and, at this stage any interference by this Hon'ble Court, would cause undue prejudice and hardships to Respondent No.7.
1544. We have considered the submissions of the parties and have carefully gone through the Judgments cited at the bar. One of the primary issues raised by the Appellant is not grant of opportunity to redeem the mortgaged property in terms of Section 13(8) (amended) of SARFAESI Act and, thus, leading to sale conducted by Respondent-Bank as vitiated in law.
45. Having heard learned counsels for the respective parties and after going through several provisions of law; in order to appreciate the aforesaid submissions, it would be appropriate to quote both, the amended and un- amended provisions of Section 13(8) of SARFAESI Act, which is quoted herein-below:-
Section 13(8) prior to its amendment:
"13(8). If the dues of the secured creditor together with all costs, charges and expenses incurred by him are rendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no further step shall be taken by him for transfer or sale of that secured asset."
Section 13(8) after to its amendment:
"13(8). Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered 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,--
(i) the secured assets shall not be transferred by way of lease, assignment or sale by the secured creditor; and
(ii) in case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further step shall be taken by such secured creditor for transfer by way of lease, or assignment or sale of such secured assets."
46. A bare perusal of aforesaid statutory provisions clearly reveals that under the un-amended Section of 13(8) of SARFAESI Act, the right of borrower to redeem to secured assets was available till the sale or transfer of such secured assets. In other words, borrower's right of redemption did not stand terminated on the date of the auction sale of the secured assets itself and remained alive till the transfer was completed in favour of the Auction Purchaser by registration of the Sale Certificate and delivery of possession of secured assets. However, amended provisions of Section 13(8) of SARFAESI Act makes it clear that the right of borrower to redeem the 16 secured assets stand extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of Rules of 2002. In effect, the right of redemption available to the borrower under the present statutory regime is drastically curtailed and would be available only till the date of publication of the notice under Rule 9(1) of the Rules of 2002 and not till the completion of the sale or transfer of the secured assets in favour of the Auction Purchaser. Reference- Celier LLP (supra).
47. It is in the aforesaid backdrop, Hon'ble Andhra Pradesh High Court, in its Judgment dated 27th June, 2018 passed in Writ Petition No. 8155 of 2018 vide Para 33.3, has held as under: -
33.3 Be that as it may, the paramount objective is to provide sufficient time and opportunity to the borrower to take all efforts to safeguard his right of ownership either by tendering the dues to the creditor before the date and time of the sale, or transfer, or ensure that the secured asset derives the maximum price and no one is allowed to exploit the vulnerable situation in which the borrower is placed.
Therefore, even after the amendment of Section 13(8) of the SARFAESI Act, a secured creditor is bound to afford to the borrower a clear thirty day notice period under Rule 8(6) to enable him to exercise his right of redemption. In consequence, a notice under Rule 9(1) of the Rules of 2002 cannot be published prior to expiry of this thirty day period in the new scenario, post-amendment of Section 13(8) of the SARFAESI Act, as such right of redemption would stand terminated immediately upon publication of the sale notice under Rule 9(1) of the Rules of 2002. The judgment of the Supreme Court in CANARA BANK V/s. M. AMARENDER REDDY, which was rendered in the context of the unamended provisions, would therefore have no application to the post-amendment scenario in the light of the change brought about in Section 13(8). To sum up, the post-
amendment scenario inevitably requires a clear thirty day notice period being maintained between issuance of the sale notice under Rule 8(6) of the Rules of 2002 and the publication of the sale notice under Rule 9(1) thereof, as the right of redemption available to the borrower in terms of Rule 8(6) of the Rules of (2017) 4 SCC 735 2002, as pointed out in MATHEW VARGHESE, stands extinguished upon publication of the sale notice under Rule 9(1)."
48. The aforesaid view of the Hon'ble Andhra Pradesh High Court has been accepted as a correct law by Hon'ble Apex Court in its decision in Celir LLP (supra) vide Paragraph 105(vii), which reads as under: -
"105. We summarise our final conclusion as under:
(i) Xxx xxx xxx 17
(vii) The decision of the Andhra Pradesh High Court in Sri Sai Annadhatha Polymers (supra) and the decision of the Telangana High Court in the case of K.V.V. Prasad Rao Gupta (supra) lay down the correct position of law while interpreting the amended Section 13(8) of the SARFAESI Act."
49. It is in view of aforesaid admitted position of law, the question, which is to be examined in the present case, is 'Whether Respondent-Bank acted contrary to the provisions of Section 13(8) by not giving opportunity to the Appellant to redeem the mortgaged properties before issuance of Auction Sale Notice?'
50. From the fact which have been enumerated in detail in preceding paragraphs, it would be evident that Notice under Section 13(2) was issued to the Appellant as far back as on 23.02.2011, wherein Appellant-Borrower including its Guarantor, were directed to deposit a sum of Rs. 2,82.31,947/- failing which, it was stated that Bank would take appropriate steps under Section 13(4) of the SARFAESI Act. Admittedly, no representation was put forward by Appellant pursuant to the said Notice dated 23.02.2011 and, thereafter, Possession Notice under Section 13(4) of the Act was issued on 25.08.2011 and even physical possession of the property was taken on 21.09.2013. It has been rightly pointed out by counsel for Respondent-Bank that Appellant, at no point of time, applied for redemption of the mortgaged properties by offering payment of the amount of dues of secured assets together with all costs, charges and expenses incurred. In fact, prior to aforesaid amendment, Respondent-Bank already issued several E-auction Notices dated 13.03.2014, 20.03.2015, 16.09.2015 and 31.08.2016 for sale of the auction properties, but it failed in its attempt in absence of adequate response.
51. Present Auction Sale Notice issued by the Bank dated 11.01.2018 was the 5th attempt by Respondent-Bank to sell the mortgaged properties. Even, when the Auction Sale Notice was issued on 11.01.2018, Appellant did not show any interest in redemption of the mortgaged properties by making payment of the entire amount along with all costs etc., but on the contrary, Appellant addressed a letter dated 12.01.2018, wherein it offered for settlement of the dues under OTS Scheme . Settlement of amount under the OTS Scheme is not equivalent to exercising right of redemption of the mortgaged properties, as provided under Section 13(8) of the Act, and, it 18 appears that Appellant is trying to intermingle the aforesaid two events just in order to somehow get the auction sale set aside. It has never been the case of the Appellant either before DRT and/or DRAT that the Appellant wanted to redeem the properties in question by paying all dues of the Bank, but, rather, the case of the Appellant all along was that the Appellant offered for settlement of the amount under OTS Proposal and its OTS Proposal should have been acted upon before the properties could have been E-auctioned. Appellant has placed extensive reliance upon the Judgment of Hon'ble Apex Court in the case of 'Sardar Associates and Ors.' (supra) as well as the Judgment of Hon'ble High Court of Judicature at Bombay, Bench at Aurangabad in Writ Petition No. 3006 of 2018 (supra). In this context, it is relevant to mention here that the Judgment of Hon'ble Apex Court in the case of 'Sardar Associates & Ors' has been considered recently by Hon'ble Supreme Court in the case of 'Meenal Agarwal & Ors.' (supra) as well as in the case of 'Arvindra Electronics Private Limited' reported in (2023) 1 SCC
540. Hon'ble Apex Court, in the case of 'Arvindra Electronics Private Limited' vide paragraphs 14 to 17, has held as under: -
"14. While considering the aforesaid issue the recent decision of this Court in Meenal Agarwal, reported in (2023) 2 SCC 805, is required to be referred to.
15. In Meenal Agarwal, this Court answered the following two questions: (SCC para 6) "6.1 (i) Whether benefit under the OTS Scheme can be prayed as a matter of right?
6.2 (ii) Whether the High Court in exercise of powers under Article 226 of the Constitution of India can issue a writ of mandamus directing the Bank to positively consider the grant of benefit under the OTS Scheme and that too dehors the eligibility criteria mentioned under the OTS Scheme?"
16. On a detailed analysis of the OTS Scheme, it is observed and held by this Court in Meenal Agarwal that:
(i) No borrower can, as a matter of right pray for a grant for the benefit of One-Time Settlement Scheme:
(ii) No writ of mandamus can be issued by the High Court in exercise of Article 226 of the Constitution of India, directing the financial institution/bank to positively grant a benefit of OTS to a borrower;19
(iii) The grant of benefit of OTS Scheme is subject to the eligibility criteria and the guidelines issued from time to time.
17. Though the decision of this Court in Meenal Agarwal was specifically pressed in service on behalf of the Bank and was pointed out to the High Court, the High Court instead following the binding decision of this Court in Meenal Agarwal has not followed the same by observing that the earlier decision of this Court in Sardar Associates, reported in (2009) 8 SCC 257, is more elaborate. We do not approve such an observation by the High Court and not following the subsequent binding decision of this Court which as such was on the point. Being a subsequent decision on the point/issue, the High Court was bound to follow the same."
52. In view of the aforesaid Judgment of Hon'ble Apex Court, the law is well settled that no borrower can claim settlement under the OTS Scheme framed by the Bank, as a matter of right.
53. In the present case, conduct of the Appellant is clear and obvious wherein Appellant has repeatedly tried to stall the auction process by offering for settlement of the dues under OTS Scheme and not adhering to the said compromise proposal despite its acceptance by the Bank. Earlier, in the year 2011 when the Bank took over possession of the assets under Section 13(4) of the SARFAESI Act, the Appellant approached the Bank for settlement of its outstanding dues which was even accepted by the Bank in terms of letter dated 15.03.2012. However, Appellant failed to make payment of the amount and, instead, approached the Writ Court for direction upon Respondent-Bank not to proceed with the auction process, which the Bank was intending to conduct in the year 2014. In fact, Respondent-Bank conducted E-auction processes on 13.04.2014, 20.03.2015, 16.09.2015 and 31.08.2016 but said auction processes were never challenged by the Appellant. The writ application filed by Appellant being W.P.(C) No. 7425 of 2013 was dismissed by this Court and, while dismissing the writ application, this Court, vide order dated 25.02.2015, observed as under: -
"The learned counsel for the respondent-Bank has rightly indicated that, the petitioner has failed to deposit Rs. 1 Crore as ordered by the Hon'ble Division Bench which shows lack of bona- fide and incapacity of the petitioner to pay. Further, I find that the application dated 18.11.2013 filed by the petitioner is not maintainable. In exercise of power under Section 19(25) of the Recovery of Debts Due to Banks and Financial Institutions Act, the Debts Recovery Tribunal has no power to direct the respondent-Bank to accept the offer which has failed due to non-20
adherence of the terms by the petitioner. The learned counsel for the respondent-Bank has informed the Court that hearing in O.A. No. 4/2006 is in advance stage and, therefore, at this stage, if a direction is issued for hearing application dated 18.11.2013, first, it would delay the conclusion of O.A. No. 4/2006."
]
54. Aforesaid observation of the Writ Court was never challenged by the Appellant and we are also of the opinion that Appellant's conduct is not bona fide and the Appellant, instead of payment of dues of the Bank, is trying to stall the recovery of the public money by challenging the E-auction conducted by the Bank without showing any inclination whatsoever for payment of the amount due to the Bank. As already observed above, Appellant never challenged E-auction notices dated 13.04.2014, 20.03.2015, 16.09.2015 and 31.08.2016 which were issued prior to amendment under Section 13(8) of the Act. At no point of time, Appellant even wrote a single letter to Respondent-Bank expressing its interest for payment of dues of the Bank together with all costs, charges and expenses incurred by the Bank. On the contrary, when Respondent-Bank initiated the auction process again on 11.01.2018, Appellant again applied for settlement under OTS Scheme and, in our opinion, said application was filed just in order to stall the auction process of the mortgaged properties. The mala fide conduct of the Appellant is further writ large by the fact that although physical possession of the mortgaged properties was taken over as far back as on 21.09.2013, Appellant re-entered the said properties without the knowledge of the Bank. In fact, present L.P.A. was listed on 9th February, 2023 upon a mentioning slip dated 8th February, 2023 tendered by the counsel for the Appellant, wherein Appellant raised a plea before this Hon'ble Court that Respondent-Bank is entering the residential premises of the Appellant by taking possession of the same. It is upon the said submission being made by the Appellant, order of status-quo with regard to the properties was passed till the next date of hearing vide order dated 9th February, 2023. The order dated 9th February, 2023 is re-produced herein-under: -
"This matter has been listed upon a mentioning slip dated th 8 February, 2023 tendered by Mr. Arpan Mishra, the learned counsel for the appellant.
Mr. Indrajit Sinha, the learned counsel assisted by Mr. Arpan Mishra, the learned counsel for the appellant submits that without serving a notice under section 8(1) of the Security Interest (Enforcement) Rules, 2002 the respondents entered the premises 21 which is the residential house of the appellant and have taken possession of the same.
Having regard to the facts and circumstances in the case, we do not see any reason to issue any direction restraining the respondents not to take possession of the subject premises or to hand over possession of the subject premises to the appellant. However, the respondents shall maintain status quo as regards nature of the property till the next date of hearing.
In view of the aforesaid, the application for stay vide I.A. No. 3434 of 2022 is accordingly disposed of.
I.A. No. 8141 of 2022 filed for recalling the order dated 23rd August 2022 and/or for ignoring the defect no. 4 with respect to page nos. 329, 358, 394, 445, 446, 452, 485, 546, 547, 553, 576 and 641 of the Letters Patent Appeal stands disposed of as in this application the appellant has stated that it is not relying on the defective pages.
I.A. No. 10934 of 2022 filed for ignoring the defect no. 4 with respect to typed copy of page nos. 263, 299, 357, 450, 451, 551 and 552 of the Letters Patent Appeal stands disposed of as in this application also the appellant has stated that it is not relying on the defective pages.
Post this matter on 14th March, 2023 under the hearing "Final Disposal".
55. In fact, said order of status quo was obtained by the Appellant by clearly misrepresenting fact before this Court and Appellant never pointed out before this Court that physical possession of the properties was taken by Respondent-Bank on 21.09.2013 itself. In fact, Appellant has specifically filed a writ application being W.P.(C) No. 4799 of 2013, wherein it challenged the physical possession of the properties taken over by Respondent-Bank and, in the aforesaid writ petition, an order dated 21.11.2013 was passed wherein this Court, after recording inter alia that physical possession of the properties has already been taken over by the Bank, the Court was pleased to dismiss the Interlocutory application of the Appellant. The order dated 21.11.2013 passed in I.A. No. 8034 of 2013 filed in W.P.(C) No. 4799 of 2013, is quoted herein-under: -
"05/21.11.2013: This Interlocutory application has been filed for restoring the possession of residential house of the petitioners, which has been sealed after dispossessing petitioner no.2 and his entire family members as per order passed under section 14 of the SARFAESI Act, 2002.
It appears that order passed under section 14 of the SARFAESI Act, 2002 is appealable under section 17 of the said Act.22
Under the aforesaid circumstance, I am not inclined to entertain this interlocutory application. Accordingly, I.A. No. 8034/2013 is dismissed.
Petitioner, if so desire, may file appeal before the appellate authority for redressal of their grievance."
56. Aforesaid facts are mentioned herein-above in detail to demonstrate the conduct of the Appellant, in as much as, the Account of the Appellant was classified as NPA as far back as on 31.03.2004, but even after expiry of about 20 years, Appellant has not taken any step for re-payment of the loan amount of the Bank. The applicability of the amended provisions of Section 13(8) of the Act was never questioned by the Appellant at any stage and, in our opinion, amended provisions would not be applicable in the present case, as in the present case, auction conducted by the Bank is its fifth attempt and prior to amended provisions of Section 13(8), the Bank had already conducted auction on four dates where it was not successful.
57. With regard to valuation of the properties in question, Appellant tried to impress upon this Court that valuation of the properties was grossly undervalued in connivance with the private Respondent. In our opinion, said argument of the Appellant is not supported by any document and the Appellant failed to bring on record any document before DRAT or before Hon'ble Single Judge regarding undervaluation of the properties in question. It is in the aforesaid background that DRAT, in its order dated 10.04.2019 vide Para-17, has categorically observed, inter alia, that Appellant has failed to bring on record any document to even prima facie demonstrate that properties have been undervalued.
58. Hon'ble Single Judge also in its Judgment vide Para-20, regarding valuation of the properties, has held as under: -
"20. One of the arguments of the learned counsel for the petitioner is that the valuer of the property could not inspect the properties since those were sealed at the relevant point of time and had merely prepared a table report. It is however, evident from the impugned orders that the said argument of the petitioner has duly been considered by the Debts Recovery Appellate Tribunal, Allahabad observing inter alia that the petitioner has failed to demonstrate as to how the property is undervalued. It has further been observed that neither contrary valuation report nor any other proof of circle rate higher than the present one was furnished before the Tribunal. The petitioner also failed to controvert the valuation of the property assessed by the valuer. Moreover, whether the property was inspected by the valuer is a question of 23 fact which cannot be entertained in the writ jurisdiction that too when the learned courts below have rejected such factual plea of the petitioner.
59. We see no reason, whatsoever, to interfere with the concurrent finding of facts rendered by DRAT and Hon'ble Single Judge regarding valuation of the properties in exercise of the power under judicial review.
60. Article 226 of the Constitution of India preserves to the High Court the power to issue writ of certiorari amongst others. The principles on which the writ of certiorari is issued are well settled. It would suffice for our purpose to quote from the seven-Judge Bench decision of Hon'ble Apex Court in Hari Vishnu Kamath v. Ahmad Ishaque [reported in AIR 1955 SC 233 : (1955) 1 SCR 1104]. The four propositions laid down therein were summarized by the Constitution Bench in Custodian of Evacuee Property v. Khan Saheb Abdul Shukoor [ reported in AIR 1961 SC 1087 : (1961) 3 SCR 855] as under: (AIR p. 1094, para 15)--
"The High Court was not justified in looking into the order of 2.12.1952, as an appellate court, though it would be justified in scrutinizing that order as if it was brought before it under Article 226 of the Constitution for issue of a writ of certiorari. The limit of the jurisdiction of the High Court in issuing writs of certiorari was considered by this Court in Hari Vishnu Kamath v. Ahmad Ishaque (supra) and the following four propositions were laid down --
(1) Certiorari will be issued for correcting errors of jurisdiction;
(2) Certiorari will also be issued when the court or tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice;
(3) The court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the court will not review findings of fact reached by the inferior court or tribunal, even if they be erroneous;
(4) An error in the decision or determination itself may also be amenable to a writ of certiorari if it is a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by certiorari but not a mere wrong decision."
61. In our considered opinion, Appellant has failed to demonstrate any of the above illustrated four grounds warranting our interference in exercise 24 of powers of judicial review sitting in an intra-court appeal against the concurrent finding of facts.
62. Another point which has been argued by the Appellant is that, in terms of Rule 8(5) of the Rules of 2002, Appellant was required to be noticed before fixation of reserve price and, in absence of the reserve price being fixed by giving notice to the Appellant, the sale is vitiated in law. For the sake of appreciation, Rule 8(5) of the Rules of 2002 is quoted herein-under: -
"8. Sale of immovable secured assets.--(1) xxx xxx xxx (5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods:-
(a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or
(b) by inviting tenders from the public;
(c) by holding public auction including through e-
auction mode; or
(d) by private treaty"
63. A bare perusal of the Rule 8(5) would reveal that said Rule empowers the Authorized Officer to obtain the estimated value of the secured asset and thereafter fix the reserve price of the asset to be sold for realization of the dues of secured creditor. The consultation for fixing of reserve price, as provided under Rule 8(5) is with the secured creditor and not with the borrower and, thus, said contention raised by the Appellant is not borne out of Rule 8(5) of the Rules of 2002.
64. That apart, from the facts of the case, it would be evident that Appellant, at no point of time, challenged the sale confirmation of Respondent-Bank in favour of Respondent No.7 and even before the DRT and DRAT, Appellant did not implead the Auction Purchaser-Respondent No.7 as a party-Respondent. As already noticed above, Appellant, although on one hand impleaded the Auction Purchaser as Respondent in the writ petition without taking leave of the court, and, on the other hand pleaded in the writ application that it is not required to implead the Auction Purchaser.25
Be that as it may, the fact remains that Appellant, at no point of time, challenged the sale confirmation of Respondent-Bank in favour of Respondent No.7.
65. In view of cumulative facts and circumstances mentioned hereinabove, we are of the opinion that the orders passed by DRT, DRAT and Hon'ble Single Judge do not require any interference by this Court and no illegality has been committee by Respondent-Bank in auction sale of the properties in question. Accordingly, present Appeal is dismissed. Pending I.As., if any, also stand dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs.
(Rongon Mukhopadhyay, J) (Deepak Roshan, J) Jharkhand High Court Dated/ 20 /02 / 2024 Amardeep/AFR