JUDGMENT : 1. Heard learned advocate Mr. Subhash G. Barot for the petitioner and learned advocate Mr.Rajesh P. Vyas for respondent No.1-Bank. 2. Rule returnable forthwith. Learned advocate Mr. Vyas waives service of notice of rule on behalf of respondent No.1. 3.By this petition under Article 226 of the Constitution of India the petitioner has prayed to direct the respondent-Bank to quash and set aside the communication dated 30.09.2020 whereby the respondent No.1-Bank has forfeited the amount deposited by the petitioner being 25% of the bid amount for purchase of the property in auction situated at Block No. 549, Plot No. 21 admeasuring 764 sq.yards i.e. 638.8 sq.mtrs in Shrinathji Industrial Estate situated at Bakrol Bujrang Sim, Bakrol Bunjrang Road, Dhamtavan Road, Taluka; Dascroi, Dist. Ahmedabad. 4.The petitioner has further prayed to direct respondent No.1-Bank to disburse the sanctioned loan of Rs. 69,96,000/- and to credit the same against remaining 75% of the quoted bid amount and to handover the peaceful possession of the property. 5.Brief facts of the case are that the petitioner made an offer pursuant to the e-auction notice issued by the respondent No.1-Bank on 23.01.2020 in Sandesh News Daily for auction of the aforesaid property which was mortgaged by the original borrower with the respondent No.1-Bank. 6.Respondent No.1-Bank issued e-auction notice with respect to the mortgaged property owned by one Krishnakumar Talsaji Purohit, who stood as guarantor of the borrower M/s. Heer Metal Corporation. The respondent No.1-Bank has initiated the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [‘SARFAESI Act’ for short] for recovering its outstanding dues against the financial assistance provided to M/s. Heer Metal Corporation. 7.The petitioner deposited Rs. 8 lakh as earnest money deposit being 10% of the reserved price fixed by the respondent No.1 being Rs. 79,36,000/-. 8.The petitioner was declared the successful bidder for mortgaged property for consideration of Rs. 93,46,000/- being highest bidder. Respondent No.1-Bank by letter dated 04.03.2020 informed the petitioner about his bid being accepted and further informed that the mortgaged property will be transferred in the name of the petitioner and the possession would be handed over on deposit of 25% of the amount by the petitioner within 15 days and the remaining amount within 15 days thereafter. The petitioner accordingly deposited the amount of Rs. 15,50,000/- on 28.02.2020 together with earnest money total being Rs. The petitioner accordingly deposited the amount of Rs. 15,50,000/- on 28.02.2020 together with earnest money total being Rs. 23,50,000/- and respondent No.1-Bank thereafter was pleased to grant 15 days time to deposit the remaining amount of Rs. 69,96,000/-. 9.The petitioner thereafter made a request to respondent No.1-Bank to extend the time for making payment of the remaining amount of Rs. 69,96,000/- which was granted by the respondent No.1-Bank from 03.03.2020 upto 11.5.2020 vide communication dated 12.03.2020. 10. It is the case of the petitioner that from 24.03.2020 there was a national vide lock down due to Covid-19 Pandemic situation and therefore, the petitioner further requested to grant the time of additional three months on 02.05.2020 as per the RBI guidelines and circulars issued for granting 90 days further time to deposit the outstanding amount by the successful bidder in view of the Covid-19 Pandemic situation. 11. It is the case of the petitioner that the petitioner came to know that the respondent No.2-original owner-M/s. Heer Metal Corporation has illegally transferred property in question in favour of one Prabharam Bhagaram on 01.01.2019 and thereafter, the said property was transferred in favour of one Dineshbhai Nathabhai Desai on 20.02.2019. It is therefore, stated in the petition that the petitioner came to know that Dineshbhai Nathabhai Desai is in illegal possession of the property and it would be difficult for the bank to obtain the property from the third party and to hand over the possession to the petitioner. 12. The petitioner thereafter by communication dated 12.06.2020 informed respondent No.1-Bank that the petitioner was not allowed to inspect the property from inside and expressed his concern about the present situation of the property. The respondent-Bank, however, assured the petitioner that the loan can be sanctioned with regard to outstanding amount of Rs. 69,96,000/- in favour of the petitioner for purchase of the property in question and therefore necessary procedure was followed by the petitioner under instruction of the respondent No.1-Bank. The petitioner thereafter made an application on 12.06.2020 for the purpose of inspection as well as further extension of the time to deposit the remaining 75% of the amount outstanding amount as per the agreed consideration being the successful bidder of the property in question. 13. The petitioner thereafter made an application on 12.06.2020 for the purpose of inspection as well as further extension of the time to deposit the remaining 75% of the amount outstanding amount as per the agreed consideration being the successful bidder of the property in question. 13. It appears that thereafter the petitioner by communication dated 01.08.2020 informed the respondent No.1-Bank about his readiness to make the payment of CGSTME premium which was required to be paid to respondent No.1-Bank for Credit Guarantee Fund Scheme for financial assistance to micro, small and medium enterprice to avail the loan up to Rs. 2 crores without any collateral or third party guarantee. 14. According to the petitioner, financial assistance of Rs. 69,96,000/- was to be released by the bank so as to enable the petitioner to deposit 75% of the outstanding sale consideration to purchase the property in question. There was a delay in sanctioning of the loan which was ultimately sanctioned by the respondent No.1-Bank dated 07.09.2020 however, in the interregnum period, on 03.09.2020, the petitioner was informed that the amount of Rs. 23,50,000/- deposited by the petitioner towards 25% of the sale consideration is forfeited by the respondent No.1-Bank. The petitioner has therefore filed this petition for the aforesaid prayers. 15. Learned advocate Mr. Barot for the petitioner submitted that the respondent-Bank could not have forfeited the amount of Rs. 23,50,000/- deposited by the petitioner-bank in view of the Covid-19 Pandemic situation which continued upto December,2020. It was further submitted that even the bank without waiting for the period of 90 days to be over, forfeited the amount by letter dated 03.09.2020. 16. Learned advocate Mr. Barot referred to and relied upon the order of the Hon’ble Supreme Court in case of Alisha Khan v. Indian Bank (Allahabad Bank) & Ors. in SLP(c) Nos. 15959-15960/2021 dated 13.12.2021 to submit that considering the Covid-19 Pandemic Situation, the Apex Court directed the respondent-Bank not to forfeit the amount but to refund the same after the deducting Rs. 50,000/- towards expenses. 17. On the other hand, learned advocate Mr. Vyas for the respondent-Bank submitted that the petitioner has been given sufficient time to deposit the outstanding amount of sale consideration even after Covid period. 50,000/- towards expenses. 17. On the other hand, learned advocate Mr. Vyas for the respondent-Bank submitted that the petitioner has been given sufficient time to deposit the outstanding amount of sale consideration even after Covid period. Learned advocate for the respondent-Bank further submitted that the petitioner has not bothered to make payment of the outstanding amount of sale consideration in spite of the lenient approach taken by the bank and the petitioner could not have waited for the loan to be sanctioned by the respondent-Bank which is the separate department and the recovery department of the respondent-Bank has nothing to do with the loan department of the respondent-Bank as both operates in different offices and therefore, the submission made by the petitioner, that the respondent-Bank was to sanction loan of Rs. 69,96,000/- to pay outstanding amount of 75%, is not tenable. 18. It was further submitted that respondent-Bank cannot extend the time limit to deposit the outstanding amount of sale consideration as per Rule 9 of the Security Interest Rules, 2002 (For short “the Rules”) as it is mandatory for the auction purchaser to deposit the amount within the stipulated time as per the Rules. However, in view of the Covid-19 Pandemic situation and as per the RBI circulars, respondent-Bank has granted additional 90 days plus 30 days time to the petitioner for deposit of the outstanding amount of the sale consideration agreed by the petitioner to be deposited for the purchase of the property in question. 19. Learned advocate for the respondent-Bank relied upon the following averments in the affidavit-in-reply filed on behalf of the respondent-Bank. 9) I farther say and submit that with regard to the contention raised by the petitioner in para no. 3.6 that the property was illegally transferred on date 01/01/2019 to one Prabharam Bhagaram and then Prabharam Bhagaram transferred the same to Dineshbhai Nathabhai Desai, in this regard I state that the Petitioner knew regarding the same and that the Petitioner has nothing to do with the same with those illegal transactions, because the property in question was mortgage first of all with the Respondent No. 1 bank and the law is that the first mortgager is always the mortgager and that the Respondent No. 1 bank will transfer the said property in favor of the petitioner after receipt of the balance amount of Rs. 69,96,000/-, on as is where is basis of the property in question, and so far as e-auction of the said property is concerned. 10) I further say and submit till date the said property in question is in the possession of the Org. Owner of the said Property i.e. Krishnakumar Talsaram Purohit - who is the Respondent No. 3 herein the petition. 11) I further say and submit that as mentioned by the petition in para 3.7 of the petitioner, it is clarified that with regard to Annexure J, it is clarified that it is the CGTSME scheme is given to any party only when the loan account of any party is opened by the bank, but here the loan account of the petitioner has not been opened by the bank and therefore there is no question of CGTSME premium. 12) I further say and submit that the Petitioner has made a reference to letter dtd. 03/09/2020 by which the Petitioner was informed by the Respondent No. 1 bank that the amount of Rs. 23,50,000/- deposited by him with regard to the e-auction of the said property has been forfeited, and in this regard make such clarification that, the petitioner was first given the time of 15 days for payment of balance amount and then again the Petitioner was given time of days at his request for payment of balance amount, but the petitioner lost both his opportunities and miserably failed in making payment of the balance amount and then the branch authorities have also to answer their superior officials pertaining to the law mentioned in the SARFAESI Act that entire procedure of action shall be completed within 90 days of stipulated period, as a part of which the petitioner was given sufficient time of total 75 (60+ 15) days, and in this regard the petitioner has also made acceptance of the same. 13) I further say and submit that with regard to the point raised by the petitioner in para 3.9 of his petition, it is t Pd clarified that the letter dtd. 3/9/2020 for forfeiting the amount of Rs. 23,50,000/- paid by the petitioner in auction of the said property, was issued because the petitioner failed to pay the balance amount of Rs. 3/9/2020 for forfeiting the amount of Rs. 23,50,000/- paid by the petitioner in auction of the said property, was issued because the petitioner failed to pay the balance amount of Rs. 69,96,000/- within the stipulate time period as a result of which the auction procedure could not be completed within 90 days time period as mentioned in the law, and that the issue of loan sanction is totally a different issue which has nothing to do with the present e-auction proceedings, and therefore the amount forfeited is as per the rules and regulations provided in the said Act, and there is nothing illegal in the same. 14) I further say and submit that the petitioner has mentioned issuance of legal notice dtd. 15/10/2020 in para 3.11 of his petition, in which regard, it is hereby clarified that the Bank served its reply dtd. 11/11/2020 in response of the above notice of the petitioner, but the reply dtd. 11/11/2020 given by the Bank to the petitioner is no where mentioned by the petitioner in his petition, which is suppression of material facts and a clear breach of the provisions of law and also the law of natural justice. 15) I further say and submit that in para 3 of the reply dtd. 11/11/2020 of the bank, it is clearly stated that it was informed to the petitioner that, "Property was put up for Bale on the basis of the symbolic possession and “as is where is" “as is what is and whatever is there” which was also duly admitted by the petitioner in para no. 2 of the petitioner's notice". Hence, now on the above clarification nothing is left in this matter as the petitioner was having full knowledge and information pertaining to the position and condition of the property under question in this case. The banking authority gave ample time to the petitioner for completion of the transaction as he himself signed the auction proceedings for acquiring the property. It is clearly mentioned in para 4 of the reply dtd. 11/11/2020 of the bank that how much time and opportunities were given to the petitioner for completion of this transaction, but the petitioner with an intention of misguiding the Hon'ble Court, has not referred the reply dtd. It is clearly mentioned in para 4 of the reply dtd. 11/11/2020 of the bank that how much time and opportunities were given to the petitioner for completion of this transaction, but the petitioner with an intention of misguiding the Hon'ble Court, has not referred the reply dtd. 11/11/2020 of the bank served to petitioner, in his petition, which is nothing but suppression of material facts, and therefore the petition of the petitioner may be dismissed with exemplary costs to be imposed on the petitioner. A copy of the Reply dtd. 11/11/2020 is annexed herewith this Affidavit in Reply as Annexure R 1. 16) I further say and submit that with regard to sanction of loan raised by the petitioner, it is hereby clarified that in para 5 of the reply dtd. 11/11/2020 served by the bank in response of the notice of the petitioner, it is informed to the petitioner that the issuance of sanction letter dtd. 17/09/2020 by the bank is concerned, the same has nothing to do with the letter dtd. 03/09/2020 issued by the bank as the letter of forfeiture was issued in terms of the Y sale notice dtd. 23/01/2020 and non compliance of the terms and conditions of the same, which is within the purview of Rule 9(4) of SI Rules, 2002 and sanction letter dtd. 17/09/2020 has been issued in terms of the documents submitted by the petitioner to the bank and hence it is denied that the loan has been sanctioned with regard to the payment of balance sale consideration in pursuant to sale notice dtd. 23/01/2020 as alleged. Above is affidavit in reply executed by me on basis of facts and circumstances of this case, and the same is true and correct as per my knowledge and information.” 20. Referring to and relying upon the above averments it was submitted that the respondent No.1-Bank has no option but to forfeit the amount as per the terms and conditions of the auction sale and in view of the provisions of the Rules. 21. Having heard learned advocate for the petitioner and the respondent-Bank and having considered the facts and materials placed on record, it appears that the respondent-Bank has taken the decision to forfeit the amount on 03.09.2020 as per the terms and conditions of the auction advertisement and as per the Rules. 21. Having heard learned advocate for the petitioner and the respondent-Bank and having considered the facts and materials placed on record, it appears that the respondent-Bank has taken the decision to forfeit the amount on 03.09.2020 as per the terms and conditions of the auction advertisement and as per the Rules. The respondent-Bank, however, could have taken shelter of the Covid-19 Pandemic Situation to refund the amount deposited by the petitioner being 25% of the amount of the sale consideration after deducting the expenses incurred by the respondent-Bank. 22. Similar issue came-up before the Apex Court in which, the Apex Court has passed the following order in Special Leave Petition (C) No. 15959-15960 in case of Alisha Khan vs. Indian Bank (Allahabad Bank) & Ors(supra): “Having gone though the impugned judgment and orders passed by the High Court, we are of the opinion that the High Court ought to have allowed the refund of the amount deposited being 25% of the auction sale consideration. Considering the fact that though initially the appellant deposited 25% of the auction sale consideration, however, subsequently she could not deposit balance 75% due to COVID-19 pandemic. It is required to be noted that subsequently the fresh auction has taken place and the property has been sold. It is not the case of the respondents that in the subsequent sale, lesser amount is received. Thus, as such, there is no loss caused to the respondents. Considering the aforesaid facts and circumstances, we allow these appeals and set aside the order of forfeiture of 25% of the amount of auction sale consideration and direct the respondent Bank to refund/return the amount earlier deposited by the appellant, deposited as the part auction sale consideration (minus 50,000/- towards the expenditure which were required to be incurred by the respondent Bank for conducting the fresh auction) within a period of four weeks from today.” 23. Relying upon the aforesaid order of the Apex Court, in similar facts the respondent-Bank ought not to have forfeited the entire amount deposited by the petitioner. 24. In the interest of justice, therefore, the petition is allowed by directing the respondent-Bank to refund the amount of Rs. 23,00,000/- from the amount of Rs.23,50,000/- deposited by the petitioner by forfeiting only Rs. 50,000/- towards expenditure which may be required by the respondent-Bank to conduct fresh auction in future. 25. 24. In the interest of justice, therefore, the petition is allowed by directing the respondent-Bank to refund the amount of Rs. 23,00,000/- from the amount of Rs.23,50,000/- deposited by the petitioner by forfeiting only Rs. 50,000/- towards expenditure which may be required by the respondent-Bank to conduct fresh auction in future. 25. With the aforesaid direction, the petition is partly allowed to the aforesaid extent. Rule is made absolute. 26. In view of the aforesaid order, the other prayers of the petitioner are not granted. Respondent No.1-Bank is directed to refund the amount of Rs. 23 lakh without interest to the petitioner within a period of six weeks from the date of receipt of this order.