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VALMIKI J. MEHTA, J

1. The petitioners by means of the present petition under Article 226 of the Constitution of India impugn the order dated 18.9.2009 passed by the Debt Recovery Appellate Tribunal (DRAT). By the impugned order, DRAT dismissed the appeal of the present petitioners filed against the order dated 4.3.2008 passed by the Debt Recovery Tribunal (DRT). By the impugned orders the DRT and the DRAT have rejected the prayer of the petitioners-borrowers seeking redemption of the mortgaged property on the ground that the auction purchase stood concluded and the stage for exercising the option of redemption had come to an end.

This petition was opposed by the respondent No.1 bank and the auction purchasers and the issues pleaded by the petitioners were denied. The bank inter-alia pleaded that the petition was barred by time as it was filed beyond the period of 45 days of the action having been taken under Section 13(4) of the SARFAESI Act. The auction purchasers also opposed the S.A. by disputing the case as set up by the petitioners under Section 17. This petition was ultimately dismissed by the DRT vide its order dated 24.5.2010 and appeal against the said order of the DRT is pending before the DRAT. The DRAT, vide its order dated 23.7.2010 stayed further proceedings under the SARFAESI Act subject to the petitioners herein depositing 50% of the amount shown to be due in the notice under Section 13(2) of the Act. That order has been challenged by the respondent Nos.2 to 5 herein in W.P.(C) No.5317/2010 which has also been heard by us alongwith the present petition and is being disposed of alongwith the present writ petition.

17. In view of the above, we hold that the right of redemption claimed by the petitioners will depend upon success of the proceedings initiated by the petitioners under Section 17 of the SARFAESI Act. In case, the petitioners finally fail, then it will not have a right of redemption, however, in case the petitioners succeed in the proceedings under Section 17 and orders are passed for setting aside the auction sale in terms of sub-section (2) to (4) of Section 17, then in such a case, it will be open to the petitioners to claim right of redemption. The conclusion which emerges is this that in case the borrower succeeds in its petition under Section 17, then, the DRT can pass orders under sub-sections 3 and 4 of Section 17 cancelling the auction sale proceedings. In case, the auction sale proceedings are cancelled because the action of the bank/financial institution is found to be violative of various provisions of the SARFAESI Act and the Rules framed there under, it is possible that a fresh auction may have to be conducted. In case a fresh auction of the mortgaged property has to be conducted then, a fresh date will be fixed for auction sale and it is at that stage that again Section 13 sub-section 8 will come into play and at which stage, the borrower can seek to exercise its right of redemption of the mortgaged property. Therefore, everything will turn upon the success or failure of the petitioners in the petition under Section 17 of the Act when the same reaches finality. Presently, the stage of the proceedings under Section 17 is that, and as already stated above, the same has been dismissed by the DRT and a statutory appeal under Section 18 is pending before the DRAT. Therefore, if the petitioners succeed in its appeal under Section 18 before the DRAT, the petitioners can exercise a right of redemption because fresh auction sale proceedings may have to be conducted and when so required to be conducted, once again a date will have to be fixed for sale/transfer/auction and before which date, the petitioners can seek to pay all the dues of the bank in terms of Section 13(8) of the SARFAESI Act.

The present petition is therefore disposed of with the aforesaid directions by setting aside the impugned orders of the DRT and DRAT dated 4.3.2008 and 18.9.2009, respectively and holding that the right of redemption will be decided in terms of the success or failure of the petitioners in the proceedings initiated by them under Section 17. The petition is accordingly disposed of leaving the parties to bear their own costs.

18. In view of our judgment in WP(C) No. 13152/2009, the present petition would stand disposed of with the direction that the impugned order is sustained which directs deposit of the 50% of the amount as shown in the notice under Section 13(2) of the SARFAESI Act, and which direction is purely an interim direction and subject to the final decision of the DRAT in the appeal which is pending before it under Section 18 of the SARFEASI Act against the order of the DRT dated 24.5.2010 dismissing the S.A. under Section 17 filed by the present petitioners. We may note that the DRAT in an appeal under Section 18 is fully empowered to impose condition for the deposit for hearing of the appeal, however, no observation in the impugned order will amount to giving the entitlement to the petitioners herein for redemption of the mortgaged property merely because they seek to deposit the entire loan amount in terms of the impugned order and the right of redemption will only be subject to their succeeding in their petition under Section 17 and as already so held by us while disposing of WP(C) No. 13152/2009.