Calcutta High Court
State Bank Of India & Ors vs K.D. Fabrics Private Limited & Anr on 21 December, 2017
Author: Jyotirmay Bhattacharya
Bench: Jyotirmay Bhattacharya
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High Court at Calcutta
Civil Appellate Jurisdiction
Original Side
Hon'ble The Acting Chief Justice Jyotirmay Bhattacharya
And
Hon'ble Justice Sahidullah Munshi
G.A 3849 of 2017
APOT 220 OF 2017
Arising out of
W.P. 660 of 2017
State Bank of India & Ors.
Vs.
K.D. Fabrics Private Limited & Anr.
For the Appellants : Mr. Joy Saha, Sr. Adv.
Mr. Kunaljit Bhattacharyee, Adv.
Ms. Sohini Bhattacharya, Adv.
For the Respondents : Mr. M.S. Tiwari, Adv.
Mr. R.K. tiwari, Adv..
Heard on : 12.12.2017
Judgment on : 21st December, 2017
Jyotirmay Bhattacharya, ACJ.:
This Mandamus Appeal is directed against an order passed by the learned Single Judge on 4th December, 2014 in WP No. 1125 at the instance of the Respondent Bank.
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By the impugned order, the respondent bank was directed to refund the sum of Rs.1,21,00,000/- to the writ petitioner which the writ petitioner paid to the bank as the sale price of the property in question put on auction sale by the Bank to recover the dues of the borrower in exercise of the powers under the SARFAESI Act, 2002, within seven days from the date of the order together with interest at the rate of 12% per annum on and from the date of receipt of the purchase price until full payment thereof to the writ petitioner. The respondent bank was directed to pay costs of Rs.25,000/- to the writ petitioner.
Let us now consider the legality of the impugned order in the facts of the instant case.
To realise the unpaid dues of its debtor, the respondent bank put up an immovable property belonging to its debtor for sale in auction under the provision of SARFESI Act, 2002. Pursuant to an advertisement published in the newspaper on 14.08.2011, the writ petitioner offered its bid and the writ petitioner being the highest bidder, was allowed to put in the bid money amounting to Rs.1,21,00,000/- which was accepted by the bank on 20.09.2011. Sale certificate was also issued in favour of the writ petitioner on 29th October 2011. However for some reason or other, the sale could neither be completed 3 by registering the sale certificate, nor possession of the property-in- question could be delivered by the bank to the writ petitioner till date.
It is rightly pointed out by Mr. Saha, learned Senior counsel appearing for the bank that the writ petitioner did not pray for refund of the money deposited by it with the bank . In fact the writ petitioner prayed for delivery of physical possession of the property in question by the bank to the petitioner.
In this context, Mr. Saha, learned Counsel contended that the writ court was not justified in directing for refund of the sale price which the writ petitioner deposited for purchasing the suit property.
Mr. Tiwari learned Advocate for the writ petitioner, submitted that since the bank is unable to complete the said sale and deliver peaceful possession thereof to the writ petitioner since September, 2011, the writ petitioner is not only deprived of enjoying the said property but at the same time is also deprived of utilizing its money which it deposited with bank almost seven years ago. He contended that in this context the writ petitioner is not interested in involving itself into this prolong litigation for receiving delivery of possession of the said property. 4
Fact remains that though the proceeding under Section 17 of the SARFESI Act, 2002, initiated by the debtor challenging auction sale, attained its finality before the Debt Recovery Tribunal, but the appeal arising therefrom and the application for condonation of delay are awaiting consideration before the Debt Recovery Appellate Tribunal.
While disposing of the proceeding under Section 17 of the said Act, the sale held on 20th September, 2011, was quashed as notice under Section 8(6) was neither issued properly as per rules, nor notice under Rule 9(2) was served upon the borrowers as per Rules. The respondent bank was thus directed to refund the bid amount received by the bank from the auction purchaser i.e. Rs.1,21,00,000/- along with interest @12% per annum to the auction purchaser. The bank was directed to pay sum of Rs.25,000/- to the writ petitioner on account of costs. The applicant (borrower) was directed to deposit the equivalent amount which the bank was required to pay to the writ petitioner, with the bank and within four weeks from the date of such deposit, the bank was directed to realise the said property from mortgage. Respondent bank was given liberty to proceed against the applicants (borrowers) and other secured assets (other securities) as per law, for recovery of their balance dues. It was also provided therein that in case the applicants (borrowers) fails to pay the aforesaid amount , the respondent bank will be at liberty to proceed with the fresh sale of the said property along with the other secured assets, as per Rules.
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Though an appeal has been field by the bank challenging the said order of the Tribunal but the said appeal is still incompetent as delay in filing this appeal has not yet been condoned.
Even assuming that delay in filing the said appeal is condoned and the appeal is regularized, still then, in our considered view, there is hardly any scope for challenging that part of the order by which the bank was directed to refund the bid amount together with interest to the writ petitioners (auction purchasers) as the bank has failed to complete the sale by registering the sale certificate and also failed to deliver possession of the property sold on auction after making it free from all encumbrances to the auction purchaser/writ petitioner in discharge of its obligation as per the condition of sale of the said property in auction, till date.
When the auction purchaser has come forward demanding refund of the bid amount due to failure of the bank in discharging its obligation as per the terms of the auction sale and that too before the sale was completed, we feel the bank should have on its own, offered refund of the bid money to the auction purchaser who was deprived of not only enjoying the possession of the property in question, but also utilized the money which it deposited with the bank for purchasing the property almost seven years ago.
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Though it is true that such relief by way of refund of the bid money has not been prayed by the writ petitioner in the writ petition, but giving appropriate relief to the petitioner by moulding the relief on the materials available before the court, is not unknown to legal parlance.
As such, we feel that the learned Writ Court did not commit any illegality in passing the impugned order in the facts of the present case.
The appeal, thus, fails.
The impugned order is affirmed.
It is made clear that this order is passed without prejudice to the rights and contentions of the parties in the pending appeal before the learned Debt Recovery Appellate Tribunal.
It is further clarified that while dealing with the said appeal, the learned Debt Recovery Appellate Tribunal is absolutely free to decide the said appeal on its own merit without being influenced by any of the observations made hereinabove.
Both the appeal and the applications are disposed of. Urgent photostat certified copy of this order, if applied for, be given to the parties as expeditiously as possible.
(Jyotirmay Bhattacharya, ACJ.) I agree (Sahidullah Munshi, J.) 7