Allahabad High Court
Scholar Education Trust Of India vs Athorized Officer Bank Of India ... on 6 July, 2021
Bench: Manoj Misra, Dinesh Pathak
HIGH COURT OF JUDICATURE AT ALLAHABAD
AFR
Court No. - 40
Case :- WRIT - C No. - 14619 of 2021
Petitioner :- Scholar Education Trust Of India
Respondent :- Athorized Officer Bank Of India And Another
Counsel for Petitioner :- Sarveshwari Prasad
Counsel for Respondent :- C.S.C.,R.V. Pandey
Hon'ble Manoj Misra,J.
Hon'ble Dinesh Pathak,J.
1. Heard Sri Sarveshwari Prasad for the petitioner; Sri Sanjeev Singh for the respondent no.1; learned Standing Counsel for respondent no.2; and perused the record.
2. A proceeding under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (In short SARFAESI Act, 2002) was drawn against M/s. Shiksha Education Trust. Aggrieved by those proceedings, M/s. Shiksha Education Trust filed an application (i.e Securitisation Application No.107 of 2020), under Section 17 of the SARFAESI Act, 2002, before the Debts Recovery Tribunal, Allahabad. During the pendency of those proceedings, the secured asset was put for auction/sale. To put a stay on the auction the applicant moved an application. When stay could not be obtained it approached the Debts Recovery Appellate Tribunal. When it failed to secure relief there, the applicant (i.e. M/s. Shiksha Education Trust) filed Writ C No.8816 of 2021 in this Court. This Court, by order dated 15th March, 2021, disposed off the writ petition filed by M/s Shiksha Education Trust by directing that the auction scheduled to be held on 16th March, 2021 shall remain stayed till the case is finally decided by the Debts Recovery Appellate Tribunal, Allahabad. However, despite the injunction order of this Court, the auction proceeded on 16th March, 2021. In that auction, the petitioner was the highest bidder. But, later, upon finding that the auction was stayed by the writ court, the auction agency (MSTC), on the web site concerned, marked the status of the auction as cancelled. Subsequently, Securitisation Application No.107 of 2020 filed by M/s. Shiksha Education Trust came to be dismissed by the Debts Recovery Tribunal, Allahabad vide judgment and order dated 15th June, 2021.
3. Consequent to the dismissal of the Securitisation Application filed by M/s. Shiksha Education Trust, this writ petition has been filed by the petitioner, that is, the successful bidder in the auction held on 16th March, 2021, for quashing the cancellation status of the auction and for a direction upon the Authorized Officer, Bank of India to hand over the possession of the auctioned property to the petitioner after confirmation of its sale after deciding the representation made by the petitioner on 17th June, 2021, followed by reminder dated 23rd June, 2021.
4. The contention of the learned counsel for the petitioner is that once the Securitisation Application is dismissed, the interim injunction order has merged in the final order and, therefore, the auction made should be confirmed and possession be handed over to the petitioner.
5. Sri Sanjeev Singh, who appears for the respondent Bank, submits that since by order dated 15th March, 2021 of the writ court the auction to be held on 16th March, 2021 was stayed, the auction proceedings that were carried out, inadvertently, being in the teeth of an injunction order were void and, therefore, the Bank has no option but to re-start the process of auction.
6. In response to the above submission, learned counsel for the petitioner submits that if the auction proceedings were void, the money deposited by the petitioner should have been returned/restored to the petitioner.
7. Having considered the rival submissions, we find that it is not in dispute that the auction was held on 16th March, 2021, that is, when the injunction order of the writ court, putting a restraint on the auction, was operating. Once that is the position, according recognition to such an auction would defeat the ends of justice and the prevalent public policy. Such an auction would therefore be void. In this regard we may notice a decision of the Apex Court in Surjit Singh and others Versus Harbans Singh and others, (1995) 6 SCC 50 where it was held that on the basis of an assignment made in violation of an injunction order, no impleadment should be allowed as recognition of such assignment would defeat the ends of justice and the prevalent public policy. Similar view has been expressed in Jehal Tanti and others Versus Nageshwar Singh, (2013) 14 SCC 689 and Vidur Impex and Traders Pvt. Ltd. & Others Versus Toshi Apartments Pvt Ltd., (2012) 8 SCC 384, where it was observed that sale deed executed in the teeth of order of injunction would be unlawful and no valid title would pass.
8. The submission of the learned counsel for the petitioner that the interim injunction merged in the final order, consequent to dismissal of the Securitisation Application, therefore, now, there are no fetters in recognition of the auction cannot be accepted for two reasons, firstly, because that auction took place when there was restraint order in operation and, therefore, according recognition to such an unlawful act would defeat the ends of justice and the prevalent public policy, and, secondly, the purpose of an auction, which is to discover the best price, might not be achieved as people in the know of injunction might have abstained from participating in the auction. Hence, the prayer of the petitioner to quash the cancellation status of the auction and to provide possession to the petitioner after confirming the auction cannot be accepted and is, accordingly, rejected.
9. The alternative oral prayer of the petitioner that the money deposited by him be returned to him, if the auction was rendered void, is acceptable.
10. This writ petition is therefore disposed off by giving liberty to the petitioner to seek refund of the money deposited by it without prejudice to his right to participate in a fresh auction that might take place of the property concerned. If the petitioner seeks refund of the money deposited by it, the same shall be returned to the petitioner forthwith, subject to necessary verification. The return of the money shall be without prejudice to the right of the petitioner to participate in fresh auction of the property in accordance with law.
11. The writ petition is disposed off.
Order Date :- 6.7.2021.
Rks.
