Delhi High Court - Orders
Mr.Kamal Garg vs Union Bank Of India & Ors on 22 November, 2021
Author: Vipin Sanghi
Bench: Vipin Sanghi, Jasmeet Singh
$~3.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12530/2021 & C.M. No. 39440 /2021
MR.KAMAL GARG ..... Petitioner
Through: Mr. Dhananjay Kumar Singh, Adv.
versus
UNION BANK OF INDIA & ORS. ..... Respondent
Through: Mr. Samarendra Kumar Advocate for
Respondent No.1
Mr. Davinder, Adv for R-2 to R-4.
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
HON'BLE MR. JUSTICE JASMEET SINGH
ORDER
% 22.11.2021
1. Counsel for the respondent No. 2 to 4 puts in appearance upon issuance of notice. We have heard learned for the parties, and proceed to dispose of the present writ petition. The petitioner is the auction purchaser in respect of the following properties:
"(1) Khasra No. 833, Plot No. 224, admeasuring 334 sq. meter at Doon Height, Mauza Kansawli Kothari, Vikas Nagar, Dist Dehradun;
(2) Khasra No. 786, Plot No. 224, admeasuring 635 sq. meter, at Doon Height, Mauza Kansawli Kothari Kothari, Vikas Nagar, Dist Dehradun;
(3) Khasra No. 556, Plot No. 224, admeasuring 518 sq. meter, at Doon Height, Mauza Kansawli Kothari Kothari, Vikas Signature Not Verified Digiltally Signed By:BHUPINDER SINGH ROHELLA Signing Date:23.11.2021 17:11:55 Nagar, Dist Dehradun; and (4) Khasra No. 786, Plot No. 224, admeasuring 845 sq. meter, at Doon Height, Mauza Kansawli Kothari Kothari, Vikas Nagar, Dist Dehradun."
2. The said properties were auctioned in pursuance of Recovery Certificate No. 6/ 2016 issued in favour of the Corporation Bank which now stands merged with the Union Bank of India for a sum of Rs. 1,37,45,742.50/- with interest.
3. The case of the petitioner is that though the reserve price of the properties was fixed at Rs.54 Lakhs, he made the highest bid of Rs. 85 Lakhs which was substantially higher than the reserve price. After making the said bid, and after having deposited the earnest money deposit to the tune of Rs. 21,25,000/- (being 25% of the bid price), the petitioner apprehended that his title may not be perfected, in view of the fact that in the State of Uttarakhand - where the properties are situated, there was a bar against purchase of properties by non-residents of Uttarakhand in excess of 250 Sq. Meters. Consequently, the petitioner - even before the expiry of the time within which the balance payment had to be made, moved an application before the Recovery Officer on 22.04.2019 seeking clarity in the matter.
4. The application was replied to by the respondent bank on 22.08.2019 stating that the provisions of the Recovery of Debts and Bankruptcy Act 1993 shall prevail over the said State Act and, therefore, auction sale in favour of the petitioner was valid and there was no legal bar for transfer of the title in favour of the petitioner. Keeping in view the stand taken by the respondent bank, the Recovery Officer dismissed the application of the Signature Not Verified Digiltally Signed By:BHUPINDER SINGH ROHELLA Signing Date:23.11.2021 17:11:55 petitioner on 28.11.2019 and forfeited 10% of the amount as deposited by the petitioner. Aggrieved by the said order of the Recovery Officer, the petitioner preferred an appeal being appeal No. 21/2019 before DRT-II, Delhi on 19.12.2019. The said appeal was dismissed by the DRT-II on 18.03.2020.
5. The petitioner then preferred appeal bearing No. 91/ 2019 before the DRAT on 18.08.2020, challenging the order of the DRT dated 18.03.2020. The DRAT, however, did not grant any interim relief to the petitioner and, consequently, the respondent bank sought to put the properties to auction on 10.11.2021. The application of the petitioner to seek interim relief from the DRAT was re-notified on 17.11.2021 i.e. after the date of the proposed auction, thereby making the application virtually infructuous. In this background, the petitioner has preferred the present writ petition.
6. The submission of learned counsel for the petitioner is that the petitioner acted bona fide. The petitioner was a genuine bidder inasmuch, as, he offered the highest bid of Rs.85 Lakhs, as against the reserve price of Rs. 54 Lakhs for the aforesaid properties. He further submits that the petitioner had a genuine apprehension that his title may not be perfected even after depositing the entire consideration, in view of the bar imposed on persons who are non-residents of Uttarakhand from purchasing property in Uttarakhand in excess of 250 Sq. Meters. He submits that if the Recovery Officer was of the view that the petitioner's apprehension was not well founded, the petitioner should have been granted, at least, some time to make deposit of the balance amount, which the petitioner was ready and willing to do. However, the petitioner had been put to serious prejudice inasmuch, as, the auction in his favour was cancelled, and 10% of the Signature Not Verified Digiltally Signed By:BHUPINDER SINGH ROHELLA Signing Date:23.11.2021 17:11:55 amount that was deposited, was forfeited. He further submits that the DRAT has also not protected the rights of the petitioner, and the petitioner is seriously prejudiced.
7. We may observe that when the writ petition was heard by us on the first date i.e. 09.11.2021, we were informed by learned counsel for the respondent bank that no bid was received in respect of the auction which was fixed for 10.11.2021.
8. In the aforesaid light, the petitioner submits that it would be in the best interest of the respondent bank, as well as the certificate debtors that the petitioner is even now provided an opportunity to pay up the balance amount, as offered by him along with such further amount fixed by this Court deeming appropriate to compensate the respondent bank for the delay in making the deposit.
9. Learned counsel for the respondent Nos. 2 to 4 objects to this proposal of the petitioner on the ground that the auction in favour of the petitioner stands cancelled and the earnest money deposit stands forfeited. He also submits that the State Bank of India has also filed the recovery proceeding against the said respondent, and till their claims are adjudicated, the properties cannot be sold in auction by the Recovery Officer in pursuance of the Recovery Certificate issued in favour of the respondent Union Bank of India. In response to our query - whether the properties were also mortgaged to secure any debt which may have been obtained by the borrowers from the State Bank of India, the reply of the respondent bank, as well as the borrowers is that the properties in question were mortgaged only with the Corporation Bank which now stands merged with the Union Bank of India.
Signature Not Verified Digiltally Signed By:BHUPINDER SINGH ROHELLA Signing Date:23.11.2021 17:11:5510. In the aforesaid light, it is clear that the respondent bank has the first charge over the properties in question, and merely because the State Bank of India may have other claims against the borrowers, is no reason to wait adjudication of the claims of the State Bank of India against the borrowers. Pertinently, the State Bank of India has not approached this Court or the DRT against the auction of the properties in question to realize the amounts due under the Recovery Certificate in favour of the respondent bank. The submission of learned counsel for the respondent borrowers that the auction in favour of the petitioner stands set aside and the EMD forfeited has no merit, since that is an issue which has not attained finality. The petitioner not having liquidated the liability under the Recovery Certificate cannot, now, seek to obstruct the auction sale of the properties in question.
11. The fresh auction sought to be conducted by the respondent bank has failed in respect whereof, the reserve price was fixed at Rs. 83 Lakhs. Considering the fact that the petitioner had offered Rs.85 Lakhs in the auction in question, it appears to us that the price offered by the petitioner was a genuine and healthy price considering the fact that the reserve price earlier fixed was only Rs.54 Lakhs.
12. In these circumstances, it may be to the advantage of not only the respondent bank, but also to the respondent Nos. 2 to 4, if the petitioner is granted an opportunity to regularize the payment with some damages for the delay in deposit of the balance amount. One cannot lose sight of the fact that the petitioner had moved an application before the Recovery Officer before the expiry of the period available to him to make the deposit of the balance amount, in view of the doubts entertained by the petitioner which cannot be said to be completely unfounded. In all fairness, the Recovery Signature Not Verified Digiltally Signed By:BHUPINDER SINGH ROHELLA Signing Date:23.11.2021 17:11:55 Officer himself should have granted an opportunity to the petitioner to make the payment of the balance amount with a reasonable rate of interest.
13. In the aforesaid circumstances, we grant one opportunity to the petitioner to deposit the balance amount along with damages quantified at Rs.5 Lakhs, within the next two weeks. The deposit shall be made with the respondent bank within the aforesaid period. In case, the deposit is made in these terms, the respondent bank shall proceed to deliver the possession of the properties to the petitioner. The Recovery Officer is directed to release the 25% of the amount deposited by the petitioner with him, along with up to date interest, within the next 10 days to the respondent Bank, and to confirm the sale. The Recovery Officer shall take all steps under the law to perfect the title of the petitioner.
14. The petition stands disposed of in the aforesaid terms.
VIPIN SANGHI, J JASMEET SINGH, J NOVEMBER 22, 2021 N.Khanna Signature Not Verified Digiltally Signed By:BHUPINDER SINGH ROHELLA Signing Date:23.11.2021 17:11:55