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TMI Blog2017 (2) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... h the same and consequently direct the respondents 2 and 3 to enlarge the time for compliance of the balance payment of Rs. 9,92,50,000/- payable by the petitioner in accordance to the E-Auction dated 07.09.2016. 2. The Authorised Officer / third respondent issued e-auction sale notice dated 25.07.2016 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act ) for the sale of the mortgaged property bearing Nos.240, 241, 242, 718, 719, 720, 721, 722, 737, 854 & 855 at Thillai Ganga Nagar Subway, Morrisson Street, St.Thomas Mount, Adambakkam Village, Alandur Taluk, Chennai and the e-auction was fixed for 07.09.2016 between 10.00a.m. to 11.00a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.SAMB/CBE/CLO-11/1065 dated 09.09.2016 forfeiting the EMD payment of Rs. 6,60,00,000/- made by the petitioner and quash the same thereby consequently direct the respondents 2 and 3 to enlarge the time for compliance of the balance payment of Rs. 9,92,50,000/- payable by the petitioner in accordance to the E-Auction dated 07.09.2016. 5. Subsequent to the said sale notice, the Bank has filed W.P.No.16561 of 2016 filed by the State Bank of India, Stressed Assets Management Branch, Raja Plaza, First Floor, No.1112, Avinashi Road, Coimabtore, Rep.by its Asst. General Manager on the file of this Court against [i] The Inspector General of Registration, No.100, Santhome High Road, Chennai; [ii] The District Collector (Administration), South Chenn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney deposit in accordance with the provisions of SARFAESI Act and time cannot be extended as requested by the petitioner. According to him, a relief contrary to the statute cannot be granted. 8. Admittedly, the security creditor put up the property for e-auction sale. E-auction notice has been issued in terms of Rule 8 of Security Interest (Enforcement) Rules, 2002. The petitioner submitted bid form to participate in the e-auction and deposited earnest money deposit and he became the successful bidder in the e-auction held on 07.09.2016. As per Rule 9(3) of Security Interest (Enforcement) Rules, 2002, successful bidder is required to deposit 25% of the sale price immediately. The Bank has allowed the petitioner to deposit the balance amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporation was quashed. 10. A Division Bench of this Court in JAI LOGISTICS vs. THE AUTHORIZED OFFICER, SYNDICATE BANK [2010 (4) CTC 627] has observed that the intending purchaser should be put on notice of the encumbrances relating to the property, the Court has set aside the order of forfeiture and the Bank was directed to refund the earnest money. A learned single Judge of this Court in CHEMSTAR CHEMICALS & INTERMEDIATES (P) LTD., vs. THE COMMERCIAL TAX OFFICER [2010 (6) CTC 635] held that the Bank is bound to disclose order of attachment of Tax Department in sale notice itself. 11. In the present case, the Authorised Officer has disclosed in the sale notice that there are few encumbrances created by third parties subsequent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision Bench of this Court in R.SHANMUGACHANDRAN (DECEASED) & OTHERS vs. THE CHIEF MANAGER, INDIAN BANK ASSET RECOVERY MANAGEMENT BRANCH [2012-4-L.W.900] has held that it is for the auction purchaser to apply for encumbrance certificates, in the time of 30 days made available to the intending buyers to see if there are any encumbrances. In JAI LOGISTICS vs. THE AUTHORIZED OFFICER, SYNDICATE BANK [2010 (4) CTC 627] the Division Bench has observed thus it will be a different issue in the event the auction notice indicated that it is the duty of the intending purchaser to verify not only the encumbrance by way of alienation of the property, but also the other statutory liabilities and in that case, the intending purchaser cannot later on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment of the Hon'ble Supreme Court in JANATHA TEXTILES AND OTHERS vs. TAX RECOVERY OFFICER AND ANOTHER [(2008) 12 SCC 582] wherein it has been held that a third party auction-purchaser's interest in the auctioned property continues to be protected notwithstanding that the underlying decree is subsequently set aside. However, in the instant case, the sale was not confirmed in favour of the petitioner. Therefore, this decision does not in any way help the petitioner in the present case. 15. However, as per Rule 9(3) of Security Interest (Enforcement) Rules, 2002 if the buyer does not deposit 25% of the sale price immediately, the immovable assets shall be offered for e-auction on 25.07.2016. The Bank has already issued subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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