Samir Narain Bhojwani vs Union Of India And Ors
2017 Latest Caselaw 9449 Bom

                                                    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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                                                             917.WPL.8636.17.doc

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

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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

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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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                                                         917.WPL.8636.17.doc

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

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'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

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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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