Manubhai Keshavlal Raval vs Idbi Bank Limited on 19 July, 2018

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Gujarat High Court

Manubhai Keshavlal Raval vs Idbi Bank Limited on 19 July, 2018

Bench: S.H.Vora

         C/SCA/10627/2018                                   ORDER



          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

         R/SPECIAL CIVIL APPLICATION NO. 10627 of 2018
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                 MANUBHAI KESHAVLAL RAVAL
                             Versus
                       IDBI BANK LIMITED
==========================================================
Appearance:
MS MOHINI H DAVE FOR MR HITESH N DAVE(2747) for the
PETITIONER(s) No.
1,10,11,12,13,14,15,16,17,18,19,2,20,21,22,23,24,25,26,27,28,29,3,30,31,4,5
,6,7,8,9
 for the RESPONDENT(s) No. 1,2,3
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 CORAM: HONOURABLE MR.JUSTICE S.H.VORA

                            Date : 19/07/2018

                              ORAL ORDER

1. By way of the present petition, the petitioners have prayed for the following reliefs:-

"14(a). Issue a writ of mandamus and/or a writ in the nature of certiorari and/or any appropriate writ or direction to the respondent Nos.1 and 3 not to conduct the auction as per auction advertisement E- Auction notice dated 05/07/2018;

(b) The Hon'ble High Court may be pleased to issue writ/prohibitory order and/or appropriate direction not to conduct the auction sale before the maturity of account of the petitioners;

(c) In the eventuality of fair and transparent auction, if the respondent No.1 bank carries auction, as per the quantity shown in public notice dated 05/07/2018 and as per the market closing rate as shown in the petition, i.e. closing rate as on 06/07/2018, the respondent No.1 be directed to credit the balance amount after adjustment of outstanding in the petitioners account."

Page 1 of 3 C/SCA/10627/2018 ORDER

2. Upon hearing submissions made at bar and considering the principles settled in the case of Ram Kishun and Ors. V/s. State of U.P. and Ors. reported in AIR 2012 SC 2288, it appears that the petitioners were granted with agricultural/commodity finance based on warehouse receipts. The respondent No.1 - IDBI Bank Ltd., based on Commodity Arrival Report (CAR), gave finance by keeping nearly 30% margin over the goods and 70% of the value of the commodity finance released in the respective accounts of the petitioners. On 05.07.2018, the respondent No.1 issued public notice of auction/sale before contractual term to be completed only after November, 2018. The said action of respondent No.1 is challenged by the present petitioners on the premise that without following due process of law i.e. notice before intention to sale and without fixing the reserve price of the quantity, holding auction is illegal and against the contract.

3. It is a matter of fact that the petitioners herein have failed to pay margin call raised by the Bank on due date and even after serving notices. As such, the petitioners have suppressed the factum of receipt of notice to pay the margin call raised by the Bank and challenged the auction as if, without any notice issued by the respondent No.1 - Bank, the auction is initiated. In fact, as on date, the auction is already held on 09.07.2018 but, the petitioners are not aware about its status thereafter.

4. Considering the facts of the case, this Court do not find that respondent No.1 is out to auction the goods in an arbitrary manner but, it appears that an attempt is made to secure the best price through the public auction as per public notice Page 2 of 3 C/SCA/10627/2018 ORDER annexed at Annexure-B. It appears that prior to auction, the petitioners were served with the notice but, no attempt is made by them to pay the margin call and, therefore, the respondent No.1 is within its rights to exercise rights under Section 176 of the Indian Contract Act.

5. Thus, there is no substance in the present petition either on law and facts and, therefore, no case is made out to entertain the present petition in view of the decision rendered in the case of Ram Kishun (supra).

6. Accordingly, present petition is hereby rejected at the admission stage. In case, if any excess amount is received by the respondent No.1 - Bank, in that event, it shall be refunded to the respective petitioners.

(S.H.VORA, J.) Hitesh Page 3 of 3

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