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2019 DIGILAW 515 (UTT)

Prateek Agarwal v. District Magistrate

2019-09-23

ALOK KUMAR VERMA, RAMESH RANGANATHAN

body2019
JUDGMENT : Ramesh Ranganathan, J. 1. This Special Appeal is preferred against the order passed by the learned Single Judge in Writ Petition (M/S) No. 2881 of 2019 dated 20.09.2019. The appellant herein filed the said Writ Petition seeking a writ of certiorari to quash the order dated 07.06.2015 passed by the first respondent directing the second respondent to take over physical possession of the residential house/property of the appellant-writ petitioner mortgaged with respondents 2 and 3; a writ of mandamus directing respondents 2 and 3 to restore possession of the residential house/property of the appellant-writ petitioner to him, along with all household articles; a writ of mandamus directing respondents 2 and 3 to accept the reserve price as stated in the advertisement dated 30.08.2019, or to re-pay the amount in installments and a writ of mandamus directing respondents 2 and 3 not to proceed with the auction in respect of the residential house/property as stated in the advertisement dated 30.08.2019. 2. Facts, to the limited extent necessary, are that the appellant writ petitioner, the Director of M/s Manokamna Steel Private Limited and the guarantor for the loan extended to the said company, had mortgaged his residential house as security for the loan extended to the said company. In the year 2011, the borrower company s account was declared as a non-performing asset and, at that time, the total liability of the borrower company stood at Rs. 6,95,00,000/-. A notice under Section 13 of the SARFAESI Act was issued, including with regards the residential property which had been mortgaged with the respondent-bank. Symbolic possession of the mortgaged asset was taken on 23.03.2011. An application was filed, under Section 14 of the SARFAESI Act, by the respondent-Bank before the first respondent in the year 2015 and the said application, filed under Section 14 of the SARFAESI Act, was allowed on 07.06.2015. The appellant-writ petitioner states that he came to know of the said order when the bank officials came to take physical possession of his house on 18.09.2019. 3. Mr. D.S. Patni, learned Senior Counsel appearing on behalf of the appellant-writ petitioner, would submit that it is on this date i.e. 18.09.2019 that the appellant-writ petitioner was dis-possessed from his residential house. 3. Mr. D.S. Patni, learned Senior Counsel appearing on behalf of the appellant-writ petitioner, would submit that it is on this date i.e. 18.09.2019 that the appellant-writ petitioner was dis-possessed from his residential house. The appellant-writ petitioner claims to have questioned the said advertisement, issued by the respondent-Bank for auction of the mortgaged property, before the Debt Recovery Tribunal, Lucknow and though, initially, an interim order of stay was granted, the said application, on its being transferred to the Debt Recovery Tribunal, Derhadun, was dismissed. 4. Mr. S.K. Jain, learned Senior Counsel appearing on behalf of the respondent-Bank, would submit that not only the advertisement issued by the respondent-Bank, but also the order passed under Section 14 of the SARFAESI Act, was subjected to challenge before the Debt Recovery Tribunal and the said order of the Debt Recovery Tribunal has attained finality. 5. If that be so, the appellant-writ petitioner could not have again questioned the order passed by the first respondent, under Section 14 of the SARFAESI Act, in proceedings under Article 226 of the Constitution of India, since he had already elected to approach the Debt Recovery Tribunal in this regard, and had suffered an order at the hands of the Debt Recovery Tribunal, which order has attained finality. 6. Be that as it may, the submission of Mr. D.S. Patni, learned Senior Counsel appearing on behalf of the appellant-writ petitioner, is that the appellant-writ petitioner had the right of redemption under Section 60 of the Transfer of Property Act and, since auction and sale of a residential property is an act of last resort, the appellant-writ petitioner should be permitted to pay the reserve price quoted in the advertisement, and direct the respondent- bank to hand-over physical possession of the residential property, on such payment, to the appellant-writ petitioner. 7. The right of redemption is not for payment of merely the reserve price, but for redemption of the entire debt. Section 13(8) of the SARFAESI Act, prior to its substitution by Act 44 of 2016 w.e.f. 01.09.2016, conferred such a right on the borrower, at any time, before the date fixed for sale or transfer. Consequent on the amendment to the said provision, the right of redemption can now be exercised only before the date of publication of the notice for public auction which, in this case, was 30.08.2019. 8. Consequent on the amendment to the said provision, the right of redemption can now be exercised only before the date of publication of the notice for public auction which, in this case, was 30.08.2019. 8. While the appellant-writ petitioner has no right in law to seek redemption post 30.08.2019 when the advertisement was published, the respondent-Bank is only interested in recovery of the amount due to it in its entirety, and not in putting the property to sale. While no right can be claimed by the appellant-writ petitioner for redemption of his property after the advertisement was issued on 30.08.2019, it is always open to him to approach the respondent-Bank agreeing to pay the entire dues forthwith; and request the respondent-Bank not to put the property to sale. His claim that he should be permitted to pay the reserve price which is merely a small fraction of the entire debt, as a condition for release of the property, does not merit acceptance. 9. Mr. D.S. Patni, learned Senior Counsel appearing on behalf of the appellant-writ petitioner, would request this Court to direct the respondent-Bank to consider a one-time settlement. 10. The manner in which the respondent-Bank should regulate its business, whether it should insist on proceeding with the auction or offer a one-time settlement to the borrower, are all matters which are not amenable for examination in proceedings under Article 226 of the Constitution of India. 11. Suffice it, in such circumstances, to observe that neither the order under appeal, nor the order now passed by us, shall disable the appellant-writ petitioner from making any such request to the respondent-Bank and for the respondent-Bank to consider the same if it so chooses. 12. The Special Appeal fails and is, accordingly, dismissed. No costs.