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TMI Blog2011 (6) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition are the purchasers of the mortgaged property under private treaty. 4. The admitted facts which are necessary for deciding this case are as under: The writ Petitioners mortgaged their property with the third Respondent bank as security for the loan obtained by them. However, they committed default in repayment of the loan. To recover that amount, on 08.06.2005, a notice under Section 13(2) of the SARFAESI Act was issued by the third Respondent bank and subsequently on 12.01.2006, possession notice under Section 13(4) of the SARFAESI Act was issued by the third Respondent bank against the writ Petitioners. Four writ petitions, viz., W.P. Nos. 4174 of 2006, 4175 of 2006, 5027 of 2006 and 5028 of 2006 as against issuance of 13(2) notice, were also filed by the writ Petitioners challenging the proceedings initiated by the third Respondent bank under 13(4) of the SARFAESI Act against them. Originally, the sale was fixed on 07.07.2006. But, No. sale had taken place since nobody was available to participate in the sale proceedings. At that stage and during the pendency of the writ petitions, it appears that the writ Petitioners had also filed O.A. No. 58 of 2006 before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As committed by me and with you due concurrence, I have sold the machineries of M/s. Suruthi Fabrices for a cost of ₹ 41 lakhs and the Bus and furnitures for a cost of ₹ 1 laks. In total the sale proceeds of both a sum of ₹ 42 laksh been remitted by me to you on 11 Sep 2006. The Balance dues towards the immovable assets of M/s. Suruthi Fabrics and M/s. Pandiays remains ₹ 69 Lakhs and ₹ 46 Lakhs respectably. However, as committed above the sale activities of immovable assets could not been completed in time due to unavoidable Circumstances. The same is expected to be completed by end of June 2007 for M/s. Suruthi Fabrics account amount ₹ 69 Lakhs and Pandiyas account amount ₹ 46 Lakhs expected on June 2007 Separately. I therefore, request you to kindly grant me permission to sell the foresaid assets and remit the balance dues as per the above durations. Please pardon me for he delay. .. From the above, it could be seen that on 11.09.2006, writ Petitioners have paid a sum of ₹ 42 lakhs and sought time to make the balance payment. Subsequently also, some correspondence had admittedly taken place. 7. According to the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate forceful possession had also been taken. 9. Under such circumstances, the writ Petitioners had filed the writ petition seeking to set aside the sale certificate issued by the third Respondent bank and the writ petition has been allowed holding that the writ Petitioners shall return the amount of ₹ 1.41 crores to the Appellants with interest at 9% per annum from April 2007 and that on such payment being made, the sales effected in favour of the Appellants will be set aside. It was further held by the learned Single Judge that in the event of the Appellants refusing to receive the same, the writ Petitioners shall deposit the said amount with the third Respondent bank. As against the said order passed by the learned Single Judge, this writ appeal has been filed. 10. The auction purchasers are the Appellants before this Court. The first and foremost contention of the learned Senior Counsel for the Appellants/auction purchasers is that the writ Petitioners cannot invoke Article 226 of the Constitution of India inasmuch as an alternative forum is available. The next contention of the learned Senior Counsel for the Appellants is that the writ Petitioners themselves have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication before the competent forum. Hence he prayed that it has to be held that this Court has No. jurisdiction to entertain the matter and sought for dismissal of the writ petition. 15. Learned Senior Counsel for the writ Petitioners / R1 and R2 herein contended that the impugned order came to be passed by way of a reasoned order in the writ petition filed by the writ Petitioners noting that there was gross violation of the principles of natural justice and the authority, the third Respondent herein, has not adopted the procedures as contemplated under the SARFAESI Act. So contending, he prayed that this Court is competent enough to entertain such a matter which warrants invocation of the writ jurisdiction under Article 226 of the Constitution of India. He further contended that even otherwise, the writ was pending for quite a long period and at this juncture, it cannot be summarily dismissed for want of jurisdiction. 16. Learned Senior Counsel for the Appellants relied on the decision of this Court reported in IV (2010) BC 128 (DB) in the case of V. Noble Kumar v. Standard Chartered Bank Auto and Mortgage Constructions, wherein it has been held as under: 16. Even afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot know of the proceedings initiated by the prescribed authority. 18. Learned Senior Counsel for the Appellants relied on the judgment of the Hon'ble Supreme Court reported in AIR 1999 SC 22 Whirlpool Corporation v. Registrar of Trade Marks Mumbai, wherein it has been held as under: 20. Much water has since flown beneath the bridge, but there has been No. corrosive effect on these decisions which though old, continue to hold the field with the result that law as to the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution, in spite of the alternative statutory remedies is not affected, specially in a case where the authority against whom the writ is filed is shown to have had No. jurisdiction or had purported to usurp jurisdiction without any legal foundation. 19. In this case also, the present writ Petitioners have filed two batches of writ petitions as stated earlier seeking to quash 13(2) and 13(4) notices under SARFAESI Act. In the second batch of writ petitions, they have not stated about the earlier petitions filed. But this writ petition arises out of a different aspect. Further all the above writ petitions have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution of India, it had arisen under different circumstances. Anyhow, this principle will not be applicable for the present facts of the case. 22. The third judgment that has been relied on by the learned Senior Counsel for R1 and R2 is the one rendered by this Court reported in (2005) 4 M.L.J. 262 MSS Wakf Board College Madurai v. Haji M. Mohamed Ali Jinnah). In this judgment it has been held that when the plea of alternative remedy was not taken before the writ court, the party cannot subsequently urge this ground before the writ Appellate Court. In this case also there is No. reference that the Appellants have raised the jurisdiction aspect before the writ Court. Therefore, we are also of the view that before this Court also, the Appellants are not entitled to raise this objection for the first time. 23. The fourth judgment that has been relied on by the learned Senior Counsel for R1 and R2 is the judgment of this Court in the case of K. Raamaselvam v. Indian Overseas Bank reported in 2009 (5) CTC 385, wherein it has been held that the Authorised Officer can confirm the sale if the sale price is secured higher than the reserve price; that if it is a lesser price, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e writ petition has been filed without going before the DRT. However it is the emphatic case of the writ Petitioners that there is a gross violation of the principles of natural justice citing non-compliance of the Rule and such aspect has also been demonstrated before this Court. Further it is pertinent to note that the earlier batch of writ petitions filed by the parties, subsequently, has been not pressed and those issues in the writ petitions are not the subject matter of the present writ petition. 28. On an earlier occasion, two writ petitions had been filed on the ground of quashing 13(2) notices. Thereafter, the writ Petitioners have filed two W.Ps. questioning 13(4) notices. Later, they have filed an O.A. before DRT and obtained interim orders. The writ Petitioners have thought it fit to sell their property, privately and they have approached the Bank and submitted the estimated value for the machineries out of the two items of the properties. After receiving the portion of the debt amount, i.e. sale machinery amount of ₹ 42 lakhs, the third Respondent Bank has sold the properties under Treaty as per 8(5) of SARFAESI Rules 2003. Questioning the issuance of the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be adopted when invoking private treaty and effecting a sale on that basis. In this connection, it would be worthwhile to refer to Rule 8(5) of the Security Interest (Enforcement) Rules, 2000 which reads thus: 5. Before effecting the sale of the immovable property referred to in Sub-rule (1) of Rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods: a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or b) by inviting tenders from the public; c) by holding public auction; or d) by private treaty. As per the private treaty, other than public auction or public tender, it can be settled between the parties invoking as per Rule 8(8) of the Security Interest (Enforcement) Rules, 2002. The sale of properties by private treaty is also permissible in law. The only condition is that it shall be on such terms as settled between all the parties in writing. From this, it is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent bank, a quasi judicial authority, has miserably failed to exercise the powers as contemplated under the SARFAESI Act as expected by the law. When such is the case, the Writ Court has every jurisdiction to exercise its power under Article 226 of the Constitution of India. In such view of that matter, we are of the considered view that the Writ Court has the power to deal with this matter and the same has been rightly exercised by learned Single Judge. Hence, we have No. hesitation to hold that the ground agitated by the learned Senior Counsel for the Appellants that the writ Petitioners cannot invoke Article 226 of the Constitution of India challenging the sale certificate inasmuch as there is an alternative remedy available, has No. force and accordingly, this contention of the learned Senior Counsel for the Appellants/Auction Purchasers is rejected. 34. The next contention of the learned Senior Counsel for the Appellants before this Court is that the Appellants had parted away the amount and they have been prevented from enjoying the properties, further he contended that No. such undertaking was given by the second Appellant's husband before the Writ Court of law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank authorities and to hold that they have not properly and fairly exercised their jurisdiction. If really on 08.12.2006, the bank officials were not inclined to grant time for the writ Petitioners to make payment, the next option open to the bank authorities is only to hold a public auction or to obtain quotations from persons dealing with similar secured assets or otherwise interested in buying such assets or by private treaty. But, as already discussed, we are of the considered opinion that it is not established before this Court that the properties have been sold by private treaty as contemplated under Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. If at all, in the event of failure on the part of the writ Petitioners to make payment, it is open to the bank authorities to resort to any one of the methods contemplated under Section 8 of the Security Interest (Enforcement) Rules, 2002 and not in the method resorted to by them. Anyhow, the writ Petitioners also had not paid the amount. Though an option was given by the Court on 21.04.2007, on that day also, the writ Petitioners have not made payment. 37. Thus, the amount due to the third Respondent bank from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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