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TMI Blog2023 (4) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... t can be further corroborated which has come on record that even when the correspondence was made by the first respondent, the only request made by the appellant throughout was that he had no difficulty to pay the balance amount provided the matter is finally decided by DRT. Obviously, as a man of ordinary prudence, one is always supposed to assess the value of the property on which the auction was held by the secured creditor (first respondent) - once there is no dispute on the facts came on record, there appears no reason for the appellant to be relegated to avail other remedial mechanisms for recovery of the indisputed amount and the Division Bench has committed a manifest error in the facts and circumstances in not exercising its power under Article 226 of the Constitution and instead of resolving the dispute, the Division Bench under the impugned judgment has kept the issue alive, permitting the parties to have a second innings in reference to the dispute which stands crystalized/settled. The first respondent is directed to return the money of Rs.50.25 lakhs to the appellant deposited in reference to the auction notice dated 18th June, 2013 within a period of two months fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to proceed with the auction but confirmation of the sale shall be kept in abeyance and await further orders of DRT. 6. The auction was held on 26th July, 2013. It is an admitted fact that the appellant was completely unaware of the interim order passed by DRT on 26th July, 2013. As the highest bidder, the appellant had to deposit 25% of the bid amount which he deposited on 27th July, 2013 amounting to Rs.38,35,000/( balance of 25% of the bid) which the first respondent accepted. 7. In total, the appellant deposited an amount of Rs.50,25,000/which included earnest money and 25% of the bid amount. The DRT later vacated the interim order due to non-prosecution on 14th October, 2013 but the substantive proceedings before the DRT remained pending and were posted for 18th October, 2013. Since the appellant was completely unaware of the pending proceedings before the DRT initiated at the instance of the third respondent(borrower) and it was nowhere indicated in the auction notice which ordinarily in the instant fact situation would not have been possible but the date when auction was held on 26th July, 2013 and the appellant was called upon to deposit the earnest money and 25% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction held on 5th March, 2014 against Rs.1.70 Crore as a reserve price was confirmed and the sale deed was executed by the first respondent in favour of the subsequent purchaser on 1st May, 2014. 12. Taking note of the bona fides of the appellant, as a final bid amount was deposited in compliance of order of the High Court, the learned Single Judge keeping in view the paramount principle that the mortgaged property must fetch the maximum realizable value on which the security interest was created, set aside the re-auction proceedings and directed the first respondent to execute the sale deed in favour of the appellant and directed that the amount deposited by the appellant, i.e., of Rs.1.77 crore be adjusted by the first respondent and money deposited by the subsequent auction purchaser be returned with 10% interest under its order dated 21st July 2015. 13. The extract of the order dated 21st July, 2015 passed by the learned Single Judge is referred as under: Consequently, writ petition succeeds and is hereby allowed. Re-auction held pursuant to the re-auction notice dated 05.03.2014 in favour of respondents nos.07 and 8 sale dated executed in favour of respondent no.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, deposited by the writ petitioner in a sum of Rs.1,77,00,000/, which has been directed to be put in Fixed Deposit under orders of this Court, shall be returned to the writ petitioner along with the accrued interest. 15. The order of the Division Bench of the High Court became a subject matter of challenge in appeal before us. 16. Learned counsel for the appellant has made a limited submission that so far as the money which has been forfeited by the first respondent is concerned, no finding to the contrary has been recorded by the Division Bench of the High Court under the impugned judgment that the appellant is not qualified to claim the amount forfeited by the first respondent still left the appellant to avail the remedy which the law permits. 17. Learned counsel further submits that there is no requirement of adopting any other remedial mechanism when there is no dispute either on facts or on law that the sum which was forfeited by the first respondent pursuant to the auction proceedings initiated in reference to notice dated 18th June, 2013, the appellant is qualified to seek refund of the amount forfeited and it is an apparent manifest error committed by the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant on 27th July, 2013. This fact has not been disputed that DRT passed an interim order on 26th July, 2013 and the fact that the proceedings had been initiated and pending on the date when the auction was held and the date on which 25% of the bid amount was deposited by the appellant, i.e., 27th July, 2013, was never brought to the notice of the appellant which would give him an option to revisit as to whether he may proceed with the auction or withdraw at that stage. 23. This fact can be further corroborated which has come on record that even when the correspondence was made by the first respondent, the only request made by the appellant throughout was that he had no difficulty to pay the balance amount provided the matter is finally decided by DRT. Obviously, as a man of ordinary prudence, one is always supposed to assess the value of the property on which the auction was held by the secured creditor(first respondent). To test the bona fide of the appellant, when the subsequent auction proceedings at the later stage were initiated pursuant to notice dated 5th March, 2014 with the reserve price of Rs.1.70 crores and the highest bid was of Rs.1,70,50,000/, just Rs.50,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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