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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 ..... d taken loan from respondent no.2 - Bank for the development of the multistorey housing project. That the respondent no.3 (hereinafter referred to as the borrower) was not able to repay the security interest to the Bank, the Bank initiated proceedings against the borrower under Section 13 of the Securitization and Reconstruction of Financial Assets 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As stated hereinabove, it is also question of great concern that the Applicant has entered into an agreement with third party in respect of few other flats i.e. Flat No.3202, 6401, 7101, 7202 and 3201 without the permission of the Respondent Bank or this Tribunal. Hence, any such transaction is declared as void." 2.5 That thereafter e-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 - original writ petitioner and Shri Ananga Bhattacharyya, learned counsel has appeared on behalf of respondent no.3. 4. Shri A. Sirajudeen, learned Senior counsel appearing on behalf of the appellant has made the following submissions: (i) That the High Court has materially erred in entertaining the writ petition filed by 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to sale holder of the flat in question agreed to pay/deposit the entire sale consideration the High Court has not committed any error in entertaining the writ petition under Article 226 of the Constitution of India challenging the e-auction notice. 5.1 It is submitted that as soon as respondent no.1 came to know 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 certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 13(4) of the SARFAESI Act the aggrieved party has a remedy under the SARFAESI Act by way of appeal under Section 17 of the SARFAESI Act to approach the DRT. Therefore, in view of the availability of the alternative statutory remedy available by way of proceedings/appeal under Section 17 of the SARFAESI 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 lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready held to be void by the DRT. That thereafter, after the borrower having failed to obtain any order, the respondent no.1 had straightway filed the writ petition challenging the e-auction notice which the borrower failed to get any relief before the DRT. If the respondent no.1 would have approached 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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