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TMI Blog2016 (6) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the respondent Bank would submit that the Bank officers had fixed the price on their perception of the price that would be fetched in the auction. It may be true that the writ petitioner had quoted higher price in the first auction, but that sale did not go through. More importantly, this is a matter, which was not really put in issue by way of appropriate pleadings for the learned Single Judge to have entered the finding as he has done. In such circumstances, on the said score also, it may not be appropriate to interfere with the re-auction. It is not that we are oblivious of the fact that, ordinarily, banks, particularly public sector banks, are expected to make all efforts to fetch the maximum price for the properties so that the auction is fair to the borrower and also to the Bank itself when large amounts are due to it; but, since we are concerned with the legality of the action of the respondent Bank, it may not be appropriate for us to consider the matter further even on the lines of conducting a re-auction, with which idea, we did toy with in our minds. The upshot of the above discussion is that the appeal filed must be allowed; the directions issued by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid interim order came to be vacated on 14.10.2013. Thereafter, within four days thereof, namely, on 18.10.2013, respondent Bank wrote to the writ petitioner about this development and the writ petitioner was called upon to deposit the balance 75 per cent within a period of 15 days. Writ petitioner wrote letter dated 25.10.2013 (Annexure No. 6 to the writ petition), which we think it appropriate to quote as under: To, The Authorized Officer, Punjab National Bank, Dehradun, Uttarakhand. Subject: In reply to the letter dated 18.10.2013 with respect to the bid in respect of the property situated at 3, Doon Vihar, Jakhan, Dehradun. Sir, This has reference to the e-auction of the above referred property held on 26.07.2013. That I was the highest bidder and the bid was decided in my favour with the bid price of ₹ 2.01 crores and as per the terms of bid, I also deposited the 25% amount of the bid immediately. That in reference to the said matter the applicant i.e. M/s SGV Industries filed a case before DRT, Lucknow as SA No. 315/2013. In this case due to the non appearance of the applicant the IR was rejected by the Hon ble Court by the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These observation have been made by the tribunal in the order dated 01.08.2013. 3. It is, further, stated in the letter that the writ petitioner would not have entered into the bidding had the fact of defective sale notice and pending litigation challenging the auction become known to him before the commencement of the auction proceedings. It is also stated that the respondent Bank has suppressed material facts and the request made is as follows: Thus my client in view of all the above reasons, does not want to put any further amount in jeopardy and you are requested to refund the entire amount received by you is ₹ 50,40,000=00 (Fifty Lacs Forty Thousand) immediately. My client does not want to get entangled in long drawn litigation and keep such a large amount of money blocked with uncertainty and be on tenterhook on account of illegality and suppression of material fact made by you for recovery in haste. You are therefore required to immediately refund the amount of ₹ 50,40,000 (Fifty Lacs Forty Thousand) with interest to my client. 4. To the same, respondent Bank sent letter dated 06.11.2013. It reads as follows: Date: 06.11.2013 Mohammed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entertained thereafter. 7. In response to the said letter, writ petitioner sent letter dated 25.11.2013. Therein, it is stated as follows: Date: 25.11.2013 To, The Chief Manager Punjab National Bank Patel Nagar Branch Dehradun Sir Ref:- Your letter dated 21.11.2013 directing deposit of balance 75% of the bid price pertaining to auction held 26-07-2013. Please take reference of your letter dt. 21-11-2013 directing deposit of balance 75% of the bid price pertaining to auction held 26-07-2013. I have also given detail reply to your all letters and again requested to kindly give me further time for depositing the balance 75%, the matter has been fixed for 28-11-2013 before Hon ble Debts Recovery Tribunal, Lucknow for hearing. Further it is requested that please grant time till disposal of the case Pending before Hon ble Debts Recovery Tribunal, Lucknow or any direction in this regard may be issued by Hon ble Debts Recovery Tribunal, Lucknow. Your s faithfully Mohd. Sharique 8. The next document produced in the writ petition is the auction notice dated 05.03.2014 issued by the respondent Bank evincing its interest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... execute sale deed in favour of the petitioner at the earliest, in any case, within two weeks from today. Bank shall be at liberty to withdraw ₹ 1,77,00,000/- deposited by the petitioner with the Registrar General of this Court. Bank is further directed to refund the amount taken from respondents no. 7 and 8 along with 10% interest thereon within two weeks from today. It is, however, made clear that sale in favour of the petitioner shall be subject to the final decision in the case pending before the D.R.T. No cost. 11. Feeling aggrieved, appellants, who are respondent Nos. 7 8 in the writ petition, are before us. 12. We have heard Mr. Arvind Vashistha, learned Senior Counsel appearing for the appellants; Mr. Ramji Srivastava, learned counsel appearing for respondent No. 1 / writ petitioner; and Mr. V.K. Kohli, learned Senior Counsel appearing for the respondent Bank. 13. Mr. Arvind Vashistha, learned Senior Counsel appearing for the appellants, would submit that there is no illegality in the conducting of the re-auction. He drew our attention to the conduct of the writ petitioner in writing to the respondent Bank to return the amount deposited and his not being i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and has not deposited the balance amount even though his bid was ₹ 2,01,00,000/-. He also would point out to the lack of pleadings in the matter on the part of the writ petitioner. 15. Mr. Ramji Srivastava, learned counsel appearing for the writ petitioner, on the other hand, would reiterate that the Bank s conduct smacks of unfairness, insofar as the respondent Bank being a public sector bank, having issued a public notice, was under a duty of fairness, when the principal borrower initiated proceedings before the Tribunal on 25.07.2013 and obtained an interim order, to tell the bidders and in particular the writ petitioner, who turned out to be the highest bidder, that there is such a litigation and, what is more, there is an interim order passed by the Tribunal. This would have persuaded the writ petitioner not to invest money in a property, which was subject matter of litigation before the Tribunal. He would also reiterate his submission that the writ petitioner had been writing letters and neither there was any positive response in regard to the request for grant of time till the disposal of the case, nor was there an answer to the request for return of the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itten by the writ petitioner thereafter, would show that the writ petitioner wanted the refund of the amount (see letter dated 01.11.2013). The respondent Bank s response comes in the form of letter dated 06.11.2013. Thereafter, we have referred to the correspondence. From the correspondence, what we would gather is that the writ petitioner was interested to wriggle out of the bid and he was not interested to take the matter further and he was more interested in getting the money, which he had already deposited, back. He also writes, of course, in response to the letter of the respondent Bank to give him time till the disposal of the case. 17. The learned Single Judge has proceeded on the basis that there is a duty of fairness to respond to these letters. Going by the letters, we would think that the respondent Bank had made its position clear that, after the vacation of the order, the respondent Bank gave time initially by 15 days and it was further extended. The writ petitioner, apparently, did not comply with the communication calling upon him to deposit the balance amount. It is, at this juncture, necessary to notice that, under the terms of the auction, the clause clearly p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reserve price fixed in the re-auction is about ₹ 51,00,000/- more than what was fixed in the first auction. The learned Senior Counsel for the respondent Bank would submit that the Bank officers had fixed the price on their perception of the price that would be fetched in the auction. It may be true that the writ petitioner had quoted higher price in the first auction, but that sale did not go through. More importantly, this is a matter, which was not really put in issue by way of appropriate pleadings for the learned Single Judge to have entered the finding as he has done. In such circumstances, on the said score also, it may not be appropriate to interfere with the re-auction. It is not that we are oblivious of the fact that, ordinarily, banks, particularly public sector banks, are expected to make all efforts to fetch the maximum price for the properties so that the auction is fair to the borrower and also to the Bank itself when large amounts are due to it; but, since we are concerned with the legality of the action of the respondent Bank, it may not be appropriate for us to consider the matter further even on the lines of conducting a re-auction, with which idea, we di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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