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TMI Blog2015 (3) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... eason or ground is not sufficient and a good cause to reject or negate the sale certificate and to issue a direction for confirming the bid given by the petitioner. The stand of the bank that they had not confirmed or accepted the bid of the petitioner is correct. Thus no concluded and binding contract existed, compelling the bank to execute the sale certificate or deed in favour of the petitioner. The bank could not have rejected the petitioner’s bid without receiving payment from the fourth respondent. It was natural for them to await payment from the fourth respondent, before rejecting the petitioner’s bid and inform them. The highest bidder cannot have any vested right to claim confirmation of his bid or quotation. Of course, if the bid is wrongly rejected in a capricious and arbitrary manner, the allegation can be examined but this is not the position in the present case. These decisions of the High Court of Delhi have to be read in light and terms of the decision of the Supreme Court in Mathew Varghese [2015 (1) TMI 461 - SUPREME COURT], which specifically interprets section 13 of the Act and the applicable Rules. The difference in price between the bid of the petitioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 1,40,00,000/-. By letter dated 11th July, 2011, the petitioner was duly informed by the bank that they had been declared the highest bidder and should comply with the terms and conditions of the notice inviting the bids. The petitioner deposited the balance 25% of the bid amount within 2 days and remaining 75% within 15 days i.e. on 25th July, 2011. 3. During the course of hearing, it was specifically put to and the petitioner was asked to clarify, whether any confirmation of the bid was received by them. It was accepted that except for letter dated 11th July, 2011, no other communication or letter was received by them from the bank. It was urged that this letter dated 11th July, 2011 and the stand taken by the bank as recorded in the order dated 29th January, 2013, dismissing SA No. 31/2010, preferred by the guarantor Ms Poonam Mansai-respondent No.2 (guarantor, for short) and respondent No.3-the borrower, should be treated as confirmation of the highest bid. 4. It is not possible to accept the said contention for the reasons set out below. 5. Letter dated 11th July, 2011, sent by the bank to the petitioner reads as under:- To, Goldkist Mobile Academy Pvt.Ltd. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e earlier auctions the reserve price as fixed was ₹ 14.77 crores and ₹ 15.83 crores. The borrower had claimed that the value of the property had gone up. The bank had contested the petition on multiple grounds including earlier rejection of the plea relying on the Delhi Land Reforms Act and affirmation of the said decision till the Supreme Court. This plea was accepted. The DRT observed and justified reduction of the reserve price to ₹ 12 crores for the property had been put to sale twice, vide notices dated 4th April, 2008 and 19th September, 2009 at the reserve price ₹ 1477 lacs and ₹ 1583.50 lacs, but no bids were received. Pertinently, the DRT observed that if the borrower felt that the property was being sold at a low price, she could make an offer or locate a purchaser ready to give a higher price, as this would only reduce the borrower s liability. It was recorded that the bid of the petitioner was more than the reserve price fixed earlier. The DRT rejected the contention of the borrower that the petitioner had not deposited 25% of the bid amount as per The Security Interest (Enforcement) Rules, 2002 (Rules, for short) in view of the terms and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 16,30,20,000/- by way of a demand draft. Before we examine the said contentions, other relevant facts may be noticed. 13. The petitioner on receipt of the letter dated 19th February, 2013 had filed an application in SA No. 31/2010, stating, inter alia, that they had not encashed bank draft and that the bank had violated mandate of the DRT s final order dated 29th January, 2013. Prayer of issuance of sale certificate was made. Initially, the DRT directed the parties to maintain status quo vide order 13th March, 2013, but the direction was subsequently vacated and interim relief declined vide order dated 15th April, 2013. In addition, the petitioner had also filed a separate and substantive SA being SA No. 40/2013 before the DRT questioning the sale certificate issued in favour of the fourth respondent. The order vacating interim stay was made subject matter before the Debt Recovery Appellate Tribunal and the High Court but these proceedings arising out of interim order are not relevant and, therefore, are not being adverted to. 14. There could be some merit in the contention of the petitioner that the letter dated 19th February, 2013 rejecting and not confirming their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the price of ₹ 28,00,0000/- paid by the fourth respondent. The price difference is substantial and huge. The total dues of the borrower were to the tune ₹ 60/65 crores and ₹ 28 crores would only partially reduce the amount due. The borrower was and is fully supporting the fourth respondent. In fact, the submission of the petitioner would constitute a good and sufficient cause for the bank not to accept or confirm the petitioner s bid due to changed circumstances as propounded by the petitioner themselves. Rejection of the bid given by the petitioner would, therefore, is in accord with the submission made by the petitioner. 16. The petitioner had drawn our attention to Section 13(1) of the Act and Rules 8 and 9 of the Rules, to support their submission that sale/transfer in their favour was conclusive/binding and the bank was precluded from entering into a new transaction and accepting offer of ₹ 28 crores from the fourth respondent. The submission is that in terms of the said Rules, the petitioner s bid of ₹ 16,30,20,000/- could not have been rejected. Reliance was placed on the decision of the Supreme Court in Bishan Paul vs. Mothu Ram AIR 1965 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me after the principal money fell due, there is a right in the mortgagor on payment or tender at a proper time and place of the mortgage money, to require a mortgagee to restore the property to the mortgagor with all rights prescribed as it stood prior to the mortgage. Under the proviso, the only impediment would be that if such a right of a mortgagor stood extinguished by the act of the parties or by the decree of a court. Certain other conditions are also stipulated in the said provision for the mortgagor to seek for redemption of the mortgaged property. Dealing with the said provision, this Court held as under in paras 34 and 35. Paras 34 and 35 are as under: (SCC p. 254) 34. The right of redemption which is embodied in Section 60 of the Transfer of Property Act is available to the mortgagor unless it has been extinguished by the act of parties. The combined effect of Section 54 of the Transfer of Property Act and Section 17 of the Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption. In India it is only on execution of the conveyance and regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in respect of the sale of secured assets created by way of a secured interest in favour of the secured creditor under the provisions of the SARFAESI Act, read along with the relevant Rules. We say so, inasmuch as, we find that even while setting out the principles in respect of the redemption of a mortgage by applying Section 60 of the TP Act, this Court has envisaged the situation where such mortgage deed providing for resorting to the sale of the mortgage property without the intervention of the Court. Keeping the said situation in mind, it was held that the right of redemption will not get extinguished merely at the expiry of the period mentioned in the mortgage deed. It was also stated that the equity of redemption is not extinguished by mere contract for sale and the most important and vital principle stated was that the mortgagor's right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. The completion of sale, it is stated, can be held to be so unless and until notice in writing requiring payment of the principal money has been served on the mortgagor. Therefore, it was held that until the sale is complete by registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. vs. Official Liquidator (2000) 6 SCC 82. These decisions were followed by the Supreme Court subsequently in FCS Software Solutions Ltd. vs. LA Medical Devices Ltd. and Ors. (2008) 10 SCC 440. Relying on these decisions, in D.J. Enterprises Ltd. Anr. Vs. IFCI Ltd. Ors., Writ Petition (Civil) No. 10219/2009 decided on 4th May, 2010 and M/s Hari Kripa Towers Pvt. Ltd. vs. M/s IFCI Ltd. W.P (C) No. 4166/2010 decided on 5th July, 2010, it has been held by this High Court that the principles or ratio relating to sales made by the company court would be equally applicable. Thus, the highest bidder cannot have any vested right to claim confirmation of his bid or quotation. Of course, if the bid is wrongly rejected in a capricious and arbitrary manner, the allegation can be examined but this is not the position in the present case. These decisions of the High Court of Delhi have to be read in light and terms of the decision of the Supreme Court in Mathew Varghese (supra), which specifically interprets section 13 of the Act and the applicable Rules. The difference in price between the bid of the petitioner and the price paid by the fourth respondent is too startling and stagger ..... 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