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TMI Blog2023 (5) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. Still the respondent no.1 entered into the agreement to sale with the borrower on 16.06.2016. At this stage, it is pertinent to note that thereafter when the Bank issued a public notice on 28.07.2016 for auctioning the properties of the borrower. Before the date of auction, on 24.08.2016 the borrower filed an application before the DRT praying for stay of all proceedings of the Bank pursuant to the auction notice dated 28.07.2016. Calculatively the respondent no.1 filed the writ petition before the High Court challenging the e-auction notice and that too after conducting of the e-auction on 31.08.2016 and the sale in favour of the appellant was confirmed. The aforesaid facts were pointed out before the High Court and despite the same the High Court has allowed the writ petition which is not sustainable at all. By the impugned order the respondent no.1 has got the relief which as such the borrower failed to get from the DRT. On the aforesaid grounds the impugned judgment and order passed by the High Court is unsustainable. Even at the time when the respondent no.1 entered into the agreement to sale/MoU he was aware about the proceedings pending before the DRT whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act, 2002). The Bank attached the properties of the borrower under Section 13(4) of the SARFAESI Act. Against the measures taken by the Bank under Section 13(4) of the SARFAESI Act, the borrower filed S.A. No.253 of 2012 before the Debt Recovery Tribunal (DRT), Hyderabad. S.A. No.253 of 2012 was listed before the DRT on 19.02.2016, when the borrower was given liberty to file a list of intending buyers of the property and bring forth with the buyers so as to enable the Tribunal to consider the same for the repayment of the dues of the Bank. On 25.02.2016, the DRT passed an order permitting the Bank to go ahead with the sale as proposed excluding flat to be identified and communicated by the borrower to the Bank by 29.02.2016 with full details of all purchasers to the bank officials on affidavit so as to enable the bank officer to exclude those flats, provided the remaining flats are sufficient for recovery of the dues. The Tribunal directed that the bank may proceed with the sale but shall not confirm the sale till the next date of hearing. At this stage it is required to be noted that the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auction was conducted by the Bank on 31.08.2016 in which the appellant also participated. The appellant was declared as a successful bidder with respect to Flat No.6401 in Lot No.1. Accordingly, he made a payment of 25% of the bid amount i.e. Rs.6,45,250/. The Bank also issued a confirmation receipt to the appellant on 31.08.2016. 2.6 That thereafter the respondent no.1 filed a Writ Petition No.31098 of 2016 before the High Court on 14.09.2016 challenging the e-auction notice dated 28.07.2016 to the extent it concerns Flat No.6401. The said writ petition was filed much after the auction was complete and the appellant was declared as a successful bidder. The respondent no.1 did not disclose in the writ petition that the auction has already taken place. The appellant herein was also not made party. By impugned judgment and order dated 15.09.2016 the High Court stayed the auction qua Flat No.6401 as notified under the e-auction sale notice subject to respondent no.1 (original wit petitioner) paying to the bank not less than 25.81 lakhs before the scheduled date and time of the auction, failing which, the Bank shall be free to proceed with the auction. The Bank issued a letter to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent no.1 which was against the steps taken by the Bank under Section 13(4) of the SARFAESI Act namely against e-auction notice; (ii) That the respondent no.1 being the agreement to sale holder had no right title in the flat in question and therefore could not have filed the writ petition challenging e-auction notice on the basis of the agreement to sale in his favour; (iii) Even if the respondent no.1 had any right, if any, in that case also he had alternative efficacious statutory remedy available under Section 17 of the SARFAESI Act challenging the e-auction notice; (iv) That there was suppression of material facts on the part of respondent no.1 which was specifically pointed out by the appellant in the counter affidavit that at the time when the writ petition was filed and the interim relief was obtained the auction had taken place in which the appellant was declared the successful bidder; (v) That in fact the DRT in the earlier order dated 24.08.2016 declared the sale agreement in favour of the respondent no.1 by the borrower as void as the same was entered into without prior permission of the DRT or even the Bank; and (vi) The High Court has materially er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the flat in question which was agreed to be sold in favour of respondent no.1 for which part consideration was paid is put to auction, immediately he filed the writ petition showing his inclination to deposit the entire amount of sale consideration which is permissible under Section 13(8) of the SARFAESI Act. It is submitted that the object and purpose of Section 13(8) of the SARFAESI Act is to save the property from auction in case the borrower and/or the person interested in the property agrees to clear the dues. 5.2 It is submitted that in the present case at the relevant time there was no concluded sale in favour of the appellant, as at the relevant time the appellant deposited only 25% of the auction sale consideration. It is submitted that as per the catena of decisions unless the full sale consideration is paid; the sale deed is executed and/or the sale certificate is issued in favour of the auction purchaser there is no concluded sale. It is submitted that if the sale is not concluded, Section 13(8) of the SARFAESI Act shall be applicable and/or can be invoked. In support of his submissions, he has relied upon the decisions of this Court in the case of Mathew Varghe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARFAESI Act, the High Court ought not to have entertained the writ petition under Article 226 of the Constitution of India in which the e-auction notice was under challenge. Therefore, the High Court has committed a very serious error in entertaining the writ petition under Article 226 of the Constitution of India challenging the e-auction notice issued by the Bank in exercise of power under Section 13(4) of the SARFAESI Act. 8.1 Even otherwise it is required to be noted that the respondent no.1 original writ petitioner filed the writ petition as agreement to sale holder of the flat in question. At this stage it is required to be noted that earlier against the measures taken by the Bank under Section 13(4) of the SARFAESI Act the borrower filed S.A.No.253 of 2012 before the DRT, Hyderabad. The DRT, Hyderabad by order dated 19.12.2016 gave the liberty to the borrower to file the list of intending buyers of the property and to bring forth with the buyers so as to enable the Tribunal to consider the same for repayment of the dues of the Bank. That thereafter on 25.02.2016 the DRT passed the following order: The Bank is directed to go ahead with the sale as proposed excluding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oached the DRT against the e-auction notice he would have been nonsuited in view of the earlier order passed by the DRT dated 24.08.2016. Therefore, calculatively the respondent no.1 filed the writ petition before the High Court challenging the e-auction notice and that too after conducting of the e-auction on 31.08.2016 and the sale in favour of the appellant was confirmed. The aforesaid facts were pointed out before the High Court and despite the same the High Court has allowed the writ petition which is not sustainable at all. By the impugned order the respondent no.1 has got the relief which as such the borrower failed to get from the DRT. On the aforesaid grounds the impugned judgment and order passed by the High Court is unsustainable. 8.3 Even otherwise it is very debatable whether Section 13(8) of the SARFAESI Act shall be applicable in favour of a person who is only an agreement to sale holder or Section 13(8) of the SARFAESI Act shall be applicable only in case of the borrower who is ready and willing to pay the entire debt. In the present case the borrower failed to get any relief from the DRT. The borrower did not apply and/or invoke Section 13(8) and did not agree t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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