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Allahabad High Court · body

2016 DIGILAW 1191 (ALL)

VARTIKA AGRAHARI v. S. B. I. , S. A. R. B.

2016-04-04

KRISHNA MURARI, VINOD KUMAR MISRA

body2016
JUDGMENT By the Court.—Petitioner was purchaser of a property auctioned by respondent-Bank towards realization of outstanding dues. A public notice of e-auction was advertized on 27.8.2015 fixing 29.9.2015. One of the conditions mentioned in the auction notice was that highest bidder shall have to deposit 25% at the fall of hammer and remaining 75% of the bid offered was to be deposited on or before 15 days. Petitioner participated in the auction and bid offered by her was highest. Admittedly, the auction took place on 30.9.2015 and 15 days time expired on 14.10.2015. The Cheque of Rs. 9,26,100/- being balance amount of 75% is alleged to have been deposited by the petitioner on 14.10.2015. When presented for encashment on 16.10.2015 the Cheque was dishonoured on the ground of insufficiency of fund. On 17.10.2015, petitioner made an application before the Bank seeking extension of seven days time to deposit the balance 75% amount. Subsequently, petitioner transferred a sum of Rs. 9,26,100/- on 17.10.2015 in the account of the Bank through RTGS. 2. Bank refusing to accept the aforesaid deposit being beyond the prescribed period put the property for fresh auction. Aggrieved by the said action, petitioner approached this Court by filing writ petition No. 60711 of 2015 which was dismissed as not pressed with liberty to move Debts Recovery Tribunal. 3. Thereafter, petitioner made an application under Section 17 (1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’), which was numbered as Securitization Application No. 55 of 2016. Debts Recovery Tribunal finding that 75% of the bid amount in compliance of Rule 9 (4) was not deposited within time and there was no extension granted by Bank for depositing the amount with the concurrence of the borrower, the deposit by the petitioner through RTGS cannot be treated to be a valid deposit and accordingly dismissed the application. 4. Learned counsel for the petitioner contends that application seeking extension of time was accepted and time was extended and it is only thereafter the amount was transferred through RTGS and thus, it was a valid deposit and the Bank committed illegality in putting the property to re-auction. 4. Learned counsel for the petitioner contends that application seeking extension of time was accepted and time was extended and it is only thereafter the amount was transferred through RTGS and thus, it was a valid deposit and the Bank committed illegality in putting the property to re-auction. It is further submitted that seven days extended by the Bank was enforced till 21.10.2015 and the money was transferred through RTGS on 17.10.2015 itself, thus, Bank cannot be said to be justified in not confirming the auction. It is also submitted that grounds for dismissing the application by the Debts Recovery Tribunal are not existent in as much as once possession of the secured assets are taken by the Bank under Section 13 (4), the Bank has absolute right of transfer by way of sale and the borrower or creditor is left with no say in the matter. 5. We have considered the arguments advanced by the learned counsel for the petitioner and perused the record. 6. It is an admitted case that as per terms and conditions of the auction notice 75% of the bid amount was not deposited within 15 days, time prescribed in the notice. It is also an admitted case that Cheque of the said amount given by the petitioner was dishonoured by her banker on account of insufficiency of fund in her account. Rule 9 of SARFAESI Act provides for time of sale, issues of sale certificate and delivery of possession, etc. Rule 9 (4) relevant for the purpose of dispute reads as under: “(4) The balance amount of purchase price payable shall be paid by the purchaser to the authorized officer on or before the fifteen day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties.” 7. Consequences of non-fulfilment of the conditions mentioned in sub-rule (4) is provided in Rule 9 (5) which reads as under : “(5) In default of payment within the period mentioned in sub-rule (4), the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.” 8. In the case in hand as it reflects from the documents filed by the petitioner herself alongwith the writ petition, Bank never extended the time of 15 days for depositing the balance amount. An application seeking extension of time made by the petitioner filed as Annexure ‘10’ to the writ petition does not bear any endorsement by the Bank that prayer has been accepted and the time has been extended. There is only an endorsement of receiving the application on 14.10.2015. The endorsement of receiving the application by no stretch of imagination can automatically tentamount to acceptance of the prayer made therein. On the contrary, Bank vide letter dated 17.10.2015 informed the petitioner that for want of consent from the borrower, the deposit made after 15 days is not liable to be accepted and the sale cannot be confirmed. The Chque issued by the petitioner was returned to her alongwith the said letter which is on record of the writ petition as Annexure ‘3’ to the writ petition. 9. In view of the above, argument advanced by the learned counsel for the petitioner that prayer for extension of time was accepted by Bank is not borne out from the record and is not liable to be accepted. 10. Rule 9 (4) clearly provides that balance amount of purchase price is to be deposited on or before 15 days or such extended time as may be agreed upon in writing between the parties. Hon’ble Apex Court while interpreting the provisions of the said Rule has clearly held that Bank cannot extend the period without formal concurrence of the borrower in the case of General Manager, Sri Siddeshwara Cooperative Bank Limited and another v. Iqbal and others, 2013 (1) SCC 83. 11. In view of the fact that petitioner failed to deposit the balance amount on or before 15 days as provided in the rule and the auction notice, the said period was never extended by the Bank, we find no flaw or illegality in the action of the Bank in cancelling the auction and putting the property for re-auction or the impugned order passed by the Debts Recovery Tribunal rejecting the securitization application. 12. Writ petition is, thus, devoid of any merits and accordingly stands dismissed in limine.