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Gujarat High Court

Manubhai Keshavlal Raval vs Idbi Bank Limited on 4 August, 2021

Author: J.B.Pardiwala

Bench: J.B.Pardiwala, Vaibhavi D. Nanavati

     C/LPA/985/2018                           ORDER DATED: 04/08/2021




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/LETTERS PATENT APPEAL NO. 985 of 2018

         In R/SPECIAL CIVIL APPLICATION NO. 10627 of 2018

                               With
         CIVIL APPLICATION (FOR DIRECTION) NO. 1 of 2018
            In R/LETTERS PATENT APPEAL NO. 985 of 2018
=============================================
               MANUBHAI KESHAVLAL RAVAL & 30 other(s)
                               Versus
                   IDBI BANK LIMITED & 2 other(s)
=============================================
Appearance:
MR HITESH N DAVE(2747) for the Appellant(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
,30,4,5,6,7,8,9
 for the Respondent(s) No. 2,3,4
MR AKSHAT KHARE(5912) for the Respondent(s) No. 1
MRS SUMAN KHARE(2226) for the Respondent(s) No. 1
=============================================

 CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
       and
       HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

                          Date : 04/08/2021

                            ORAL ORDER

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1. This appeal under clause 15 of the Letters Patent is at the instance of the original writ applicants and is directed against the order passed by a learned Single Judge of this Court dated 19.07.2018 in the Special Civil Application No.10627 of 2018 by which the learned Single Judge rejected the writ application.

2. We have heard Ms. Mohini Dave, the learned counsel appearing for the appellants and Mr. Akshat Khare, the learned counsel appearing for the IDBI Bank Limited.

C/LPA/985/2018 ORDER DATED: 04/08/2021

3. The appellants herein came before this Court by filing the Special Civil Application No.10627 of 2018 with the following prayer:

"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 no 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;

d) During pendency of hearing, admission, disposal of the Special Civil Application, this Hon'ble Court be pleased to grant stay against the public auction notice dated 06/07/2018 (Annexure-B) and further direction not to finalise the same until further directions and orders of this Hon'ble Court;

e) Be pleased to award costs of the petition;

f) Be pleased to pass any such other and further relief which this Hon'ble court deems fit, just, appropriate looking to the nature of petition;"

4. The learned Single Judge declined to interfere and thought fit to reject the writ application summarily. While rejecting the writ application, the learned Single Judge observed as under:

"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.

C/LPA/985/2018 ORDER DATED: 04/08/2021 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 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."

5. We are of the view that no error not to speak of any error of law could be said to have been committed by the learned Single Judge in rejecting the writ application. Ms. Dave would submit that the auction proceedings are not in accordance with law. We are afraid. We cannot go into the legality and validity of the auction proceedings because the same was not the issue before the learned Single Judge. The learned Single Judge was requested to stop the auction proceedings and such prayer was declined. Thereafter, the auction proceedings were undertaken and attained finality. If the appellants have any grievance in that regard, they may redress their grievance Page 3 of 4 Downloaded on : Sun Jan 16 05:49:33 IST 2022 C/LPA/985/2018 ORDER DATED: 04/08/2021 invoking appropriate legal remedy before the appropriate forum in accordance with law.

6. In the aforesaid view of the matter, this appeal fails and is hereby dismissed. The connected civil application also stands disposed of.

(J. B. PARDIWALA, J) (VAIBHAVI D. NANAVATI,J) NEHA Page 4 of 4 Downloaded on : Sun Jan 16 05:49:33 IST 2022