917.WPL.8636.17.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 8636 OF 2017
Samir Narain Bhojwani
having his address at 1st floor,
Samir Complex, St. Andrews Road,
Bandra (W), Mumbai - 400 050 ... Petitioner
Orig. Appellant/
(Auction Purchaser)
V/s.
1 Union Bank of India
having its Head Office at 239,
Vidhan Bhavan Marg, Nariman Point,
Mumbai - 400 021 and one of its
Branch amongst others at Mumbai
Samachar Marg, Fort, Mumbai known
as Asset Recovery Branch.
2 Shri Rajendra D. Mudaliarswamy
Alias Rajan D. Swamy,
Prop. Of M/s. R.D. Swamy having his
address at 250, Bazargate Street, Fort, Mumbai.
3 Mazda Computer & Software Pvt. Ltd.
represented by its Director Shri
Rohinton Cawasji Mistry (Respondent
No.6 herein) having their office at
Flat No.6, Sheila Mahal 1st Pasta Lane,
Colaba, Mumbai.
4 Ms. Salma Begum Kamruddin Karmali
having her address at Sai Laxmi Niwas,
107, 1st Floor, Nalasopara (East),
Dist. Thane 401 203.
5 Mr. Kamruddin Karmali Subhai
having his address at Sai Laxmi Niwas,
107, 1st Floor, Nalasopara,
Dist. Thane 401 203.
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6 Rohinton Cawasji Mistry
having his office at Flat No.6,
Sheila Mahal 1st Pasta Lane,
Colaba, Mumbai 400 005.
7 Mr. Rajesh Baheti
having his address at 97, Vinay
Chambers, Senapati Bapat Marg,
Shivaji Nagar, Pune 411 016.
8 Mrs. Lucy Alwine Jacinto
having her address at Koliwada
Gaothan, Kalina, Santacruz (East)
Mumbai - 400 055
and also at 7/111, Geeta, Sion (West)
Mumbai - 400 022. ... Respondents
Mr. Gautam Ankhad with Ms. Devyani Deshmukh i/b Solomon & Co.
for the Petitioner.
Mr. Shashank N. Fadia for the Respondents.
CORAM : B.R. GAVAI AND
MANISH PITALE, JJ.
DATE : 08th DECEMBER, 2017. JUDGMENT [PER : MANISH PITALE, J.] 1 Rule. Rule made returnable forthwith. Mr. Fadia waives
service of notice for the Respondents. By consent of parties, Petition is taken up for final hearing.
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2 By this Writ Petition, the Petitioner has challenged the
order dated 04.10.2016 passed by the Debts Recovery Appellate Tribunal, Mumbai, (hereinafter referred to as the "Appellate Tribunal'') whereby the Appellate Tribunal has dismissed the Appeal of the Petitioner and confirmed the order of the Debts Recovery Tribunal No.1, Mumbai, (hereinafter referred to as "D.R.T."), as a result of which the direction of the D.R.T. forfeiting the Earnest Money Deposit (EMD) amount deposited by the Petitioner has been upheld. 3 On 06.05.2013, a public notice was issued by the Recovery Officer of the D.R.T. for sale of plot of land bearing C.S. No.1053 at Bandra, by way of E-auction. This public notice stated that EMD amount would have to be deposited for the bids to be considered and further that the balance 25% amount of the purchase price minus EMD amount shall have to be deposited as soon as the auction is knocked down. This public notice also clearly stated that the sale of the said property was strictly on "as is, where is and what is basis". 4 Pursuant to the said public notice, the E-auction was conducted on 14.06.2013 wherein the Petitioner was the successful bidder having offered price of Rs.4,66,00,000/-. The Petitioner had already deposited EMD amount of Rs.42,00,000/-, as per aforesaid waghmare/- 3/8 ::: Uploaded on - 14/12/2017 ::: Downloaded on - 15/12/2017 01:01:51 :::
917.WPL.8636.17.doc condition stated in the public notice, the balance money amounting to 25% of the purchase price, was required to be deposited on the same day i.e. 14.06.2013. The admitted position on facts is that the Petitioner did not deposit the said balance amount on 14.06.2013 or even thereafter. Instead the Petitioner demanded supply of copies of all title documents from Respondent No.1-Bank. In this situation, Respondent No.1-Bank on 19.07.2013, filed an application before the Recovery Officer of the D.R.T. praying for forfeiture of the EMD amount for non-compliance of terms and conditions of the sale by the Petitioner. On 29.10.2013, the Petitioner filed an application seeking refund of EMD by setting aside of the sale. On 27.12.2013, the Recovery Officer of D.R.T. passed an order, rejecting the application of Respondent No.1-Bank and allowing that of the Petitioner, directing release of EMD amount in favour of the Petitioner. 5 Aggrieved by the said order of the Recovery Officer of D.R.T., Respondent No.1-Bank filed appeal before the D.R.T. This appeal was allowed by an order dated 28.11.2014 by the D.R.T. and it was held that the Petitioner did not deserve refund of EMD amount as he had failed to adhere to the terms and conditions of the sale. The Petitioner challenged the said order of the D.R.T. by filing an appeal waghmare/- 4/8 ::: Uploaded on - 14/12/2017 ::: Downloaded on - 15/12/2017 01:01:51 :::
917.WPL.8636.17.doc before the Appellate Tribunal, which has been dismissed by the impugned order dated 04.10.2016. Before the Appellate Tribunal, the Petitioner relied upon the judgment of the Hon'ble Supreme Court in the case of Haryana Financial Corporation and Another v/s. Rajesh Gupta1. The Appellate Tribunal has held that the said judgment of the Hon'ble Supreme Court does not apply to the facts of the present case because the Petitioner herein failed to adhere to the terms and conditions of the sale. Accordingly, the Appellate Tribunal has dismissed the Appeal of the Petitioner, which is the subject matter of challenge in this Writ Petition.
6 Mr. Ankhad, learned counsel appearing on behalf of the Petitioner, submitted that the order of the Appellate Tribunal and that of the D.R.T. is unsustainable because the Petitioner was entitled to be supplied with copies of the title documents and that in the absence of such information being provided by Respondent No.1-Bank, the EMD deposited by him could not have been forfeited. The Petitioner relied upon Section 55(1)(b) of the Transfer of Property Act, 1882, in support of the said submission. Reliance was placed on the Judgment 1 (2010) 1SCC 655.
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of the Hon'ble Supreme Court in the case of Haryana Financial Corporation (Supra).
7 On the other hand, Mr. Fadia, the learned counsel appearing on behalf of the Respondent-Bank submitted that the Writ Petition deserves to be dismissed because the Petitioner had not deposited the balance amount towards 25% of the purchase price on the date of the auction and that, therefore, there was no substance in the contention raised on behalf of the Petitioner. 8 We have heard the learned counsel for the parties and we perused the pleadings and the record of the case. It is evident from the record that the public notice for auction sale was published on 06.05.2013 and the auction was conducted on 14.06.2013. The public notice clearly stated that the property was being sold strictly on 'as is, where is and what is basis'. Thus, it was incumbent on the Petitioner, as a bidder in the said auction sale, to satisfy himself and to verify as regards the title documents and other information pertaining to the property put on sale. The time period between the public notice and the actual date of auction was about five weeks and it was for the Petitioner to have verified the aforesaid details. Since the sale of the property under the aforesaid public notice dated 06.05.2013 was on waghmare/- 6/8 ::: Uploaded on - 14/12/2017 ::: Downloaded on - 15/12/2017 01:01:51 :::
917.WPL.8636.17.doc 'as is, where is and what is basis', the Petitioner ought to have verified the said details before participating in the sale auction. Having participated in the sale auction on 14.06.2013 and being the successful bidder, as per the conditions of the sale, he was mandatorily required to deposit the balance of the 25% purchase price, having already deposited Rs.42,00,000/- as EMD.
9 It is clear from the public notice for sale and the conditions for sale of the said property that deposit of such balance amount on the date of the auction as soon as the auction was knocked down, was necessary and failure to do so amounted to default on the part of the Petitioner. The consequence of such default was forfeiture of the EMD amount of Rs.42,00,000/-. The reliance placed by the Petitioner on the judgment of the Hon'ble Supreme Court in the case of Haryana Financial Corporation (supra) is misplaced because there has been violation of the terms and conditions of sale on the part of the Petitioner himself. Having failed to adhere to the terms and conditions of the sale, the Petitioner cannot turn around and challenge the auction of the forfeiture of EMD amount because it is nothing but the consequence of the default on the part of the Petitioner. It was for the Petitioner to have verified the documents pertaining to the title of waghmare/- 7/8 ::: Uploaded on - 14/12/2017 ::: Downloaded on - 15/12/2017 01:01:51 :::
917.WPL.8636.17.doc the property, if he had any apprehension on that account, before participating and making his bid in the auction conducted pursuant to the aforesaid public notice.
10 Therefore, we are of the opinion that no error has been committed by the Appellate Tribunal in the impugned order dated 04.10.2016 and the order of the D.R.T. dated 28.11.2014, wherein the aforesaid judgment of the Hon'ble Supreme Court has been distinguished and it has been held that the EMD amount has been correctly forfeited. The Recovery Officer of the D.R.T. clearly erred in the order dated 27.12.2013 by directing refund of the EMD amount, as the Petitioner had defaulted in adhering to the terms and conditions of the sale. The D.R.T. as well as the Appellate Tribunal have correctly appreciated the facts in the present case and no fault can be found in the orders passed by them. Accordingly, the Writ Petition is dismissed. Rule is discharged with no order as to costs.
(MANISH PITALE, J.) (B.R. GAVAI, J.)
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