Bombay High Court
Smt. Julie Amitabh Parekh And Ors vs Reliance Asset Reconstruction ... on 14 November, 2017
Bench: B.R. Gavai
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BDPSPS
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9659 OF 2015
1] Smt. Julie Amitabh Parekh ]
having address at Flat Nos.1001 & 1002 ]
Satra Residency, Ahimsa Road, Khar ]
(West), Mumbai. ]
]
2] Master Aarnav Amitabh Parekh]
Through his Guardian ]
Smt. Julie Amitabh Parekh, ]
having address at Flat Nos.1001 & 1002 ]
Satra Residency, Ahimsa Road, Khar ]
(West), Mumbai. ]
]
3] Master Aaren Amitabh Parekh ]
Through his Guardian ]
Smt. Julie Amitabh Parekh, ]
having address at Flat Nos.1001 & 1002 ]
Satra Residency, Ahimsa Road, Khar ]
(West), Mumbai. ]
]
4] Smt. Pratima Arun Parekh ]
having address at Flat Nos.1001 & 1002 ]
Satra Residency, Ahimsa Road, Khar ]
(West), Mumbai. ]
Versus
1] Reliance Asset Reconstruction ]
Company Limited, 570, Rectifier House, ]
Naigaum Cross Road, Wadala, ]
Mumbai - 400 031 ]
]
2] Yes Bank Limited ]
India Bulls Finance Centre ]
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Tower 2, 23rd Floor, Senapati ]
Bapat Marg, Elphinstone (West) ]
Mumbai 400 013 ]
]
3] Union of India, ]
Aayakar Bhavan, Annexe, ]
M.K. Road, Mumbai -400 020. ] ..... Respondents.
Mr. Zal Andhyarujina a/w Mr Simil Purohit, Ms. Nikita Vardhan i/b
Kanga & Co. for the Petitioners.
Mr. Gaurav Joshi, Senior Counsel a/w Ms. Neeta Jain and Mr. Nikhil
Rajani i/b M/s V. Deshpande & Co. for Respondent No.1.
CORAM: B. R. GAVAI &
SANDEEP K. SHINDE, JJ.
DATE: 14th November, 2017
ORAL JUDGMENT: (Per B.R. Gavai, J.)
1] Petitioners, by way of present Petition, have assailed the order
passed by the learned Chairperson of the Debt Recovery Appellate
Tribunal, Mumbai (hereinafter referred to as "DRAT"), by which, while
deciding the waiver application filed by the present Petitioners,
learned Tribunal has directed the Petitioners to deposit 25% of the
amount covered by notice issued under section 13(2), for allowing the
waiver application.
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2] Brief facts giving rise to the present Petition are as under:-
3] One Parekh Aluminex Limited was a principal borrower of the
assigner Yes Bank. Late Amitabh Arun Parekh was a mortgagor and
guarantor for the debt. Unfortunately, Mr. Amitabh Arun Parekh
expired on 06/01/2013. Subsequently, notice under section 13(2) of
the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (hereinafter referred to as
"the SARFAESI Act") came to be issued to the Petitioners who are
undisputedly legal heirs of the said deceased Amitabh.
4] After the notice was issued to the Petitioners under Section
13(2), Petitioners made a representation to the Yes Bank. The Bank
invited the Petitioners to visit the Bank for conducting inspection of
documents to satisfy themselves with regard to possession of the
documents, creating security interest in favour of the said Bank.
Subsequently, it appears that Yes Bank assigned the debt in favour of
1st Respondent on 29/06/2013. The 1st Respondent, on 30/07/2013,
took symbolic possession. The same was published on 09/08/2013.
The orders were passed under Section 14 of the SARFAESI Act on
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8/10/2013 by the learned Magistrate regarding physical possession.
The Petitioners, therefore, moved the securitization application before
the learned DRT. The securitization application came to be rejected by
the learned DRT. Being aggrieved thereby, Petitioners preferred an
appeal before the learned DRAT alongwith the application for waiver
of pre-deposit, as required under the provisions of the SARFAESI Act.
The learned DRAT passed a conditional order on 19/08/2015, thereby
directing the Petitioners to deposit 25% of the amount due, as pre-
condition for waiver. It was also directed that, if Petitioners fail to
deposit the amount within a prescribed period, appeal shall stand
dismissed automatically. Being aggrieved thereby, the present Petition
has been filed.
5] It appears that, initially, the matter was moved before the
Division Bench of this Court on 15/10/2015 on the ground that the
auction was to take place on 05/11/2015. However, the learned
Judges of the Division Bench refused to grant urgent circulation. It
appears that the Petitioners have challenged the said order of the
Division Bench of this Court dated 05/11/2015 before Their Lordships
of the Apex Court. Their Lordships on 27/11/2015 passed the order
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as under:-
"Upon hearing the counsel the Court made the following
O R D E R
It has been submitted by the learned counsel
appearing for the petitioners that on 05.11.2015, when the
property was sought to be auctioned, there was no buyer
and, therefore, ultimately respondent no.1 itself purchased
the property which, according to the learned counsel for
the petitioner, is improper.
In view of the fact that the petition is still pending
in the High Court and the Petitioners have approached this
Court at an interlocutory stage, we do not deem it fit to
entertain the petition, which is disposed of as such. However,
we direct respondent no.1 not to sell, dispose of, alienate or
create any third party right, title or interest in the property till
next date of hearing before the High Court.
A copy of this order shall be communicated to the
respondents forthwith.
The special leave petition is disposed of in the aforesaid
terms."
6] It appears that the matter was thereafter listed before various
Division Benches of this Court from time to time. Respondents
thereafter moved the matter before this Court for urgent hearing and,
as such, the matter was fixed for hearing today.
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7] We have extensively heard Mr. Zal Andhyarujina, learned
Counsel for the Petitioners and Mr. Gaurav Joshi, learned Senior
Counsel appearing on behalf of Respondent No.1.
8] Mr. Andhyarujina submits that definition of "borrower", as
defined under clause (f) of sub-section (1) of Section 2 of the
SARFAESI Act, would reveal that legal heirs of the borrower are not
included under the said definition. He submits that, a conjoint reading
of all sub-sections of Section 13, would reveal that creditor is entitled
to take action under the provisions of the said Act only against the
borrower. He submits that the SARFAESI Act is a special Act and it
applies notwithstanding anything contained in any of the provisions of
the other Acts. He therefore submits that the order passed by the
learned Chairperson by taking recourse to the provisions of Section
59A of the Transfer of Property Act is totally unsustainable.
9] The another argument advanced on behalf of the Petitioners is
on the basis of Section 13(5-A) of the SARFAESI Act. It is submitted
that Respondent No.1 had itself purchased the property in the auction
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conducted by it, which is not permissible under the said provision.
Mr. Andhyarujina also relied on the judgment of the Division Bench of
this Court in Kotak Mahindra Bank Ltd vs. Trupti Sanjay Mehta1.
10] Mr. Joshi, learned Senior Counsel appearing on behalf of
Respondent No.1, submits that the issue is no more res integra. He
submits that Division Bench of Andhra Pradesh High Court in the case
of G. Manohar vs. Indian Bank (ADB) Nagiri Branch, Chittor, Chittor
District2 and Division Bench of Delhi High Court in the case of Kamal
Gupta vs. Bank of India3, have categorically taken a view that the
"borrower" under the provisions of section 2(1)(f) of the SARFAESI
Act, would also include legal heirs of the borrower. He submits that,
in that view of the matter there is no merit in the Petition and the
Petition deserves to be dismissed.
11] For appreciating rival submissions, it would be necessary to
refer to clauses (f), (zd) and (zf) of sub-section (1) of Section 2 and
sub-section (2) of Section 2 of the SARFAESI Act, which read as
1 AIR 2016 (BOM) 123
2 2009(6) ALL MR (JOURNAL) 4
3 2007 (99) DRJ 444
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under:-
2. Definitions.- (1) In this Act, unless the
context otherwise requires,-
(a)........ to (e).........
(f) "borrower" means any person who has
been granted financial assistance by any bank
or financial institution or who has given any
guarantee or created any mortgage or pledge
as security for the financial assistance granted
by any bank or financial institution and
includes a person who becomes borrower of a
asset reconstruction company consequent
upon acquisition by it of any rights or interest
of any bank or financial institution in relation
to such financial assistance or who has raised
funds through issue of debt securities;
(g)......... to (zc).......
(zd) "secured creditor" means-
(i) any bank or financial institution or
any consortium or group of banks or financial
institutions holding any right, title or interest
upon any tangible asset or intangible asset as
specified in clause (l);
(ii) debenture trustee appointed by any
bank or financial institution; or
(iii) an asset reconstruction company
whether acting as such or managing a trust
set up by such asset reconstruction company
for the securitisation or reconstruction, as the
case may be; or
(iv) debenture trustee registered with
the Board appointed by any company for
secured debt securities; or
(v) any other trustee holding securities
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on behalf of a bank or financial institution,
in whose favour security interest is created by
any borrower for due repayment of any
financial assistance;
(ze) ..........
(zf) "security interest" means right, title or
interest of any kind, other than those
specified in section 31, upon property created
in favour of any secured creditor and
includes-
(I) any mortgage, charge,
hypothecation, assignment or any right, title
or interest of any kind, on tangible asset,
retained by the secured creditor as an owner
of the property, given on hire or financial
lease or conditional sale or under any other
contract which secures the obligation to pay
any unpaid portion of the purchase price of
the asset or an obligation incurred or credit
provided to enable the borrower to acquire
the tangible asset; or
(ii) such right, title or interest in any
intangible asset or assignment or licence of
such tangible asset which secures the
obligation to pay any unpaid portion of the
purchase price of the intangible asset or the
obligation incurred or any credit provided to
enable the borrower to acquire the tangible
asset or licence of intangible asset;"
(zg) ........ to (zj).......
(2) Words and expressions used and not
defined in this Act but defined in the Indian
Contracts Act, 1872 (9 of 1872) or the
Transfer of Property Act, 1882 (4 of 1882) or
the Companies Act, 1956 (1 of 1956) or the
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Securities and Exchange Board of India Act,
1992 (15 of 1992) shall have the same
meanings respectively assigned to them in
those Acts."
It will also be relevant to refer to sub-section (1) of Section 13 of the
said Act, which reads as under:-
"13. Enforcement of security interest.- (1) Notwithstanding
anything contained in section 69 or section 69-A of the
Transfer of Property Act, 1882 (4 of 1882), any security
interest created in favour of any secured creditor may be
enforced, without the intervention of the Court or tribunal, by
such creditor in accordance with the provisions of this Act."
12] No doubt that, as rightly pointed out by Mr. Andhyarujina, the
term "borrower", as defined in clause (f) of sub-section (1) of Section
2, means any person who has been granted financial assistance by any
bank or financial institution or who has given any guarantee or
created any mortgage or pledge as security for the financial assistance
granted by any bank or financial institution and includes a person who
becomes borrower of a asset reconstruction company consequent upon
acquisition by it of any rights or interest of any bank or financial
institution in relation to such financial assistance or who has raised
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funds through issue of debt securities. We need not elaborately
discuss the definition of "secured creditor" and "security interest", as
provided under clause (zd) and (zf) of sub-section (1) of Section 2
inasmuch as Mr. Andhyarujina fairly concedes that Respondent No.1
would be a 'secured creditor' within the meaning of clause (zd) and
the assets which are subject matter of the Petition would be covered by
the term "security interest" within the meaning of clause (zf) of sub-
section (1) of Section 2.
13] Mr. Andhyarujina has also rightly pointed out that from sub-
sections (2) onwards of Section 13, the legislature has used the word
"borrower". He therefore contends that the provisions have to be read
in such a manner that it is only the borrower, as defined under clause
(f) of sub-section (1) of Section 2, who could be proceeded against by
the secured creditor. He submits that the Bank is not without remedy.
However, the provisions of the Special Act can be invoked by the Bank
only against the persons, permitted under the provisions of the said
statute and since the Petitioner cannot be termed to be a "borrower"
within the meaning of clause (f) of sub-section (1) of Section 2, the
bank cannot proceed against the Petitioners under the provisions of
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the SARFAESI Act.
14] By now, it is a settled position in law, that the provisions of a
statute cannot be read in isolation. The Courts are required to read
the provisions in harmony with each other and make an attempt to
give effect to the legislative intent. Reliance in this respect could be
placed on the following observations of Their Lordships of the
Supreme Court in the case of Municipal Corporation of the City of
Ahmedabad vs. Ben Hiraben Manilal1:-
"The question involved being one of
construction of a provision of a statute that
construction must be so made as to be in
conformity with the other provisions of that
particular statute and the provisions must
be read as a whole."
It is equally settled that even while interpreting different parts of a
particular section also, principles of harmonious construction have to
be applied. The different parts of a section are required to be read
together, so as to give effect to the true intention of the legislature.
Reliance in this respect could be placed on the following observations
of Their Lordships of the Supreme Court in the case of The Balasinor
Nagrik Co-operative Bank Ltd vs. Babubhai Shankerlal Pandya and
1 AIR 1983 SC 537
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Others1.
"It is an elementary rule that construction
of a section is to be made of all parts
together. It is not permissible to omit any
part of it. For, the principle that the
statute must be read as a whole is equally
applicable to different parts of the same
section."
15] Perusal of sub-section (1) of Section 13 of the SARFAESI Act,
would reveal that the said Section begins with non-obstante clause,
which provides that the provisions under the said Section can be
invoked notwithstanding anything contained in Section 69 or 69A of
the Transfer of Property Act. The provisions of sub-section (1) would
reveal that the provisions are to be resorted to by any secured creditor
for enforcement of any security interest without intervention of the
Court or Tribunal in accordance with the provisions of the said Act. It
could thus be seen that legislative intent is clear that the secured
creditor is entitled to take recourse to the provisions contained in the
said Act, for enforcing any security interest created in favour of such
secured creditor notwithstanding anything contained in the provisions
of Section 69 or 69A of the Transfer of Property Act. Perusal of the
provisions contained in sub-section (2) onwards, would reveal that the
1 AIR 1987 SC 849
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said provisions only provide for procedure for enforcing the security
interest, as has been mentioned in sub-section (1) of Section 13.
16] We find that while deciding the present case, another rule of
interpretation of statutes, which is required to be employed is
Heydons' rule. The Constitution Bench of the Apex Court, consisting
of 7 Hon'ble Judges, has succinctly described the said Rule in the case
case of Bengal Immunity Co. Ltd. vs. State of Bihar and Others 1. It will
be apposite to refer to the following observations of Their Lordships :-
(22) It is a sound rule of construction of a
statute firmly established in England as far back
as 1584 when - 'Heydon's case', (1584) 3 Co Rep
7a (V) was decided that -
".......for the sure and true interpretation
of all Statutes in general (be they penal or
beneficial, restrictive or enlarging of the
common law) four things are to be
discerned and considered:
1st. What was the common law
before making of the Act,
2nd. What was the mischief and
defect for which the common law did not
provide,
3rd. What remedy the Parliament
hath resolved and appointed to cure the
1 AIR 1955 SC 661
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disease of the Commonwealth, and
4th. The true reason of the remedy;
and then the office of all the judges is
always to make such construction as shall
suppress the mischief, and advance the
remedy, and to suppress subtle inventions
and evasions for continuance of the
mischief, and 'pro privato commodo', and
to add force and life to the cure and
remedy, according to the true intent of the
makers of the Act, 'pro bono publico'".
In - 'In re, Mayfair Property Co.', (1898) 2
Ch 28 at p. 35(W) Lindley M.R. in 1898
found the rule "as necessary now as it was
when Lord Coke reported 'Heydons' case
(V)'. In - 'Eastman Photographic Material
Co. vs Comptroller General of Patents,
Designs and Trade Marks', 1898 AC 571 at
p. 576 (X), Earl of Halsbury re-affirmed
the rule as follows :
"My Lords, it appears to me that to
construe the Statute in question, it is
not only legitimate but highly
convenient to refer both to the former
Act and to the ascertained evils to
which the former Act had given rise,
and to the later Act which provided the
remedy. These three being compared
I cannot doubt the conclusion."
It appears to us that this rule is equally
applicable to the construction of Art. 286
of our Constitution. In order to properly
interpret the provisions of that Article it is,
therefore, necessary to consider how the
matter stood immediately before the
Constitution came into force, what the
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mischief was for which the old law did not
provide and the remedy which has been
provided by the Constitution to cure that
mischief."
It could thus be seen that, while interpreting the provisions, one will
have to examine as to what was the mischief noticed by the legislature
and what remedy was provided by the legislature to cure the said
mischief. It will be relevant to refer to the Statements of Objects and
Reasons of the said Enactment for finding out what was the mischief
which was noticed by the legislature, why it was found necessary to
cure the said mischief and what remedy was provided by the
legislature. The Statements of Objects and Reasons of the said
Enactment, reads thus:-
"Statement of Objects and Reasons.- The financial sector
has been one of the key drivers in India's efforts to achieve
success in rapidly developing its economy. While the
banking industry in India is progressively complying with
the international prudential norms and accounting
practices, there are certain areas in which the banking and
financial sector do not have a level playing field as
compared to other participants in the financial markets in
the world. There is no legal provision for facilitating
securitisation of financial assets of banks and financial
institutions. Further, unlike international banks, the banks
and financial institutions in India do not have power to
take possession of securities and sell them. Our existing
legal framework relating to commercial transactions has
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not kept pace with the changing commercial practices and
financial sector reforms. This has resulted in slow pace of
recovery of defaulting loans and mounting levels of non-
performing assets of banks and financial institutions.
Narasimham Committee I and II and Andhyarujina
Committee constituted by the Central Government for the
purpose of examining banking sector reforms have
considered the need for changes in the legal system in
respect of these areas. These Committees, inter alia, have
suggested enactment of a new legislation for securitisation
and empowering banks and financial institutions to take
possession of the securities and to sell them without the
intervention of the Court. Acting on these suggestions, the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Ordinance, 2002 was
promulgated on the 21 st
June, 2002 to regulate
securitisation and reconstruction of financial assets and
enforcement of security interest and for matters connected
therewith or incidental thereto. The provisions of the
Ordinance would would enable banks and financial
institutions to realise long-term assets, manage problem of
liquidity, asset liability mismatches and improve recovery
by exercising powers to take possession of securities, sell
them and reduce non-performing assets by adopting
measures for recovery or reconstruction."
(Emphasis supplied)
It could thus be seen that the legislature found that, there were certain
areas in which the banking and financial sector in India did not have a
level playing field as compared to other participants in the financial
markets in the world. It was found that, there was no legal provision
for facilitating securitisation of financial assets of banks and financial
institutions. It was further found that, unlike international banks, the
banks and financial institutions in India did not have power to take
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possession of securities and sell them. The legislature found that, our
existing legal frame work relating to commercial transactions has not
kept pace with the changing commercial practices and financial sector
reforms. It was found that, on account of that, there was slow pace of
recovery of defaulting loans and mounting levels of non-performing
assets of banks and financial institutions. The Statement of Objects
and Reasons would further reveal that the Central Government had
constituted three Committees; two under the Chairmanship of an
eminent economist Mr. Narasimham who was also the Governor of
Reserve Bank of India and the third under the Chairmanship of an
eminent jurist Mr. Andhyarujina, for the purpose of examining
banking sector reforms and for considering the need for changes in
the legal system in respect of these areas. It could also be seen from
the Statement of Objects and Reasons that, these Committees had
suggested enactment of a new legislation for securitisation and
empowering banks and financial institutions to take possession of the
securities and to sell them without the intervention of the Court.
Acting on the suggestions of the said Committees, initially, an
Ordinance was promulgated on 21st June, 2002 to regulate
securitisation and reconstruction of financial assets and enforcement
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of security interest and for matters connected therewith or incidental
thereto. The Ordinance came to be translated into the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 ( 54 of 2002), which came into force with effect
from 17/12/2002. The said Act was enacted to enable the banks and
financial institutions to realise long-term assets, manage problems of
liquidity, asset liability mismatches and improve recovery by exercising
powers to take possession of securities, sell them and reduce non-
performing assets by adopting measures for recovery or
reconstruction. Para 2 of the Statement of Objects and Reasons,
would show various measures that have been provided under the
SARFAESI Act for giving effect to the legislative intent, as contained in
para 1 of the Statement of Objects and Reasons.
17] It could thus be clearly seen that the legislature found that, as
compared to international practices, India was lagging much behind in
providing powers to the banks and financial institutions of taking
possession of the secured assets and selling them for recovery of their
dues. After noticing the said mischief, the legislature, in order to
provide a remedy to cure the said defect, appointed three Committees
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under the Chairmanship of an eminent economist and an eminent
jurist. On the recommendations of these Committees, in order to
provide a remedy to cure the mischief, the Central Government
brought an Ordinance and thereafter the Parliament enacted the
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 ( 54 of 2002).
18] It could thus be seen that predominant purpose for legislating
the said Act was to give a weapon in the hands of the banks for
securing the assets, take possession thereof, sell them and reduce the
non-performing assets by adopting measures for recovery or
reconstruction.
19] It could further be seen that sub-section (2) of Section 2 of
the said Act clearly provides that, words and expressions used and not
defined in the said Act but defined in the Indian Contract Act, 1872 (9
of 1872) or the Transfer of Property Act, 1882 (4 of 1882) or the
Companies Act, 1956 (1 of 1956) or the Securities and Exchange
Board of India Act, 1992 (15 of 1992) shall have the same meanings
respectively assigned to them in those Acts. Undoubtedly, the word
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"mortgagor" has not been defined in the SARFAESI Act. However, by
virtue of sub-section (2) of Section 2, since the term "mortgagor" has
not been defined under the said Act but has been defined under the
Transfer of Property Act, it shall have the same meaning to it as is in
the Transfer of Property Act. The effect would be, as if the
"mortgagor" as is defined under the provisions of the Transfer of
Property Act, would be the "mortgagor" for the provisions contained in
the SARFAESI Act. Since there is no definition of "mortgagor" and
"mortgagee" in the SARFAESI Act, in view of sub-section (2) of Section
2 of the SARFAESI Act, the effect would be that, the reference to
mortgagors and mortgagees made in the Transfer of Property Act
would, by principle of incorporation, be a reference to the mortgagors
and mortgagees under the provisions of the SARFAESI Act. Section
59A of the Transfer of Property Act, specifically provides that the
mortgagors and mortgagees shall be deemed to include references to
persons deriving title from them. In that view of the matter, the legal
heirs of original borrower who is a mortgagor would also be deemed
to be a mortgagor under the provisions of the SARFAESI Act.
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20] Division Bench of the Delhi high Court in the case of Kamal
Gupta (supra), relying on Section 59A of the Transfer of Property Act
1882 has, in clear terms, held that the word "borrower" defined in
section 2(f) would mean the original borrower and after his death his
legal representatives. The learned Judges of the Delhi High Court
have also relied on the Judgment of the Apex Court in the case of
Samarendra Nath Sinha & Another vs. Krishna Kumar Nag 1 for arriving
at the said finding.
21] We find that upon harmonious construction of the provisions of
sub-section (1) of Section 13 read with sub-section (2) of Section 2,
view taken by Division Bench of Delhi High Court in the case of Kamal
Gupta (supra) lays down the correct proposition of law and we are in
complete agreement with the same.
22] Division Bench of Andhra Pradesh High Court has also
taken the similar view, relying on the provisions of Section 59A of the
Transfer of Property Act read with sub-section (2) of Section 2 of the
said Act. In addition, Division Bench of the Andhra Pradesh High Court
1 AIR 1967 SC 1440
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has also relied upon the provisions of Section 37 of the SARFAESI Act
for negating the contention which is raised by Mr. Andhyarujina in the
present matter. The Division Bench of the Andhra Pradesh High
Court has held that in view of provisions of Section 37 of the
SARFAESI Act, the provisions of the SARFAESI Act are in addition to
the provisions which are available to the secured creditor under the
provisions of the other Enactments.
23] Insofar as the Judgment of Division Bench of this Court in Kotak
Mahindra Bank Ltd (supra) is concerned, the said judgment has been
stayed by the Hon'ble Supreme Court. Even otherwise, we find that
the said judgment would not be applicable to the facts of the present
case. Their Lordships of the Supreme Court in the case of The
Regional Manager and Another vs. Pawan Kumar Dubey 1, have
succinctly described as to what would amount to ratio decidendi. In
that case, it has been held by Their Lordships as under:-
"It is the rule deducible from the
application of law to the facts and
circumstances of a case which constitutes its
ratio decidendi and not some conclusion
1 (1976) 3 SCC 334
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based upon facts which may appear to be
similar. One additional or different fact can
make a world of difference between
conclusions in two cases even when the
same principles are applied in each case to
similar facts."
It could be seen that Their Lordships have held that ratio decidendi of
the case is what is decided by the Court on the facts of the case by
applying the provisions of law in the said case. It has further been
held that a slight distinction in facts with the application of the same
principle of law may lead to totally diagonally opposite results. In the
case of Kotak Mahindra Bank Ltd (supra), what fell for consideration
before the learned Judges of the Division Bench was, as to whether the
provisions of the SARFAESI Act are available to the non-banking
financial institutions or not. While deciding the said issue, the obiter,
as to what would mean to be a borrower, in our considered view,
cannot be said to be a ratio decidendi.
24] We have hereinabove elaborately considered the provisions of
the statute with respect to the facts as are available in the present case
and have held that the term "borrower" would also include the legal
representatives of the original mortgagor.
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25] Insofar as the second argument of Mr. Andhyarujina with regard
to the provisions of Section (5-A) of Section 13 is concerned, no doubt,
that, as directed by Their Lordships of the Supreme Court vide Order
dated 27.11.2015 passed in SLP No.32139 of 2015, Respondent No.1
is restrained from creating any third party right till the next date of
hearing before the High Court.. However, we find that the argument
on the said issue, is also without any substance. Sub-section (5-A) of
Section 13 reads thus:-
"13(5-A) Where the sale of an immovable property, for
which a reserve price has been specified, has been
postponed for want of a bid of an amount not less than
such reserve price, it shall be lawful for any officer of the
secured creditor, if so authorised by the secured creditor
in this behalf, to bid for the immovable property on
behalf of the secured creditor at any subsequent sale."
It could thus be seen that what is prohibited by the said Act is
participation by secured creditor in the first auction. However, the
said provision does not preclude the secured creditor from
participating in the second or onward auctions, if the property was not
sold in the first auction. A specific statement is made on an affidavit
by Mr. Vinod Suryakant Pawaskar, the Head - Legal of Respondent
No.1, stating therein that since the earlier public auctions held three
times have failed for want of bidders, Respondent No.1 had no option
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but to bid in the fourth auction. Though period of one year has
elapsed from the date of filing of the said affidavit, no rejoinder is
filed. Mr. Andhyarujina would rely on the order dated 27/10/2016
and particularly on para 3 of the said order. It could be noticed that
the said order was passed by the Division Bench in Civil Application
No.2803 of 2016 for amendment of the Petition. Learned Counsel for
Respondent No.1 did not object to the amendment being carried out.
The Court has also noticed that grant of pre-admission amendment is a
matter of rule. In para 3 of the said order, only oral argument made
on behalf of the Petitioner is recorded that it does not admit the
allegations made in the affidavit in reply by Respondent No.1. It is
stated that, as Respondent No.1 has consented to the amendment,
Petitioner is not filing its affidavit in rejoinder.
26] Where a particular fact is stated on an affidavit, a non-denial
thereto by counter affidavit, would deem such averment to be
uncontroverted and, as such, admitted. We are therefore of the
considered view that the statement made on an affidavit that since
Respondent No.1 did not get a bidder on three occasions, it
participated in the fourth bid, has gone unchallenged. The said fact
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could have been countered by the Petitioners, either by filing specific
affidavit or by any other mode of pleadings. The same having not
been done, we find that the assertion by Respondent No.1 that in first
three biddings, there was no bidder and, therefore, they participated in
the fourth bid, has gone unchallenged. In that view of the matter, we
find that the submission in that regard also deserves to be rejected.
27] In that view of the matter, we do not find any error in the view
taken by the learned Tribunal, calling for interference by this Court
under its extraordinary jurisdiction under Article 226 of the
Constitution of India.
28] Petition is found to be devoid of merit and dismissed as such.
Rule stands discharged.
29] At this stage, Mr. Andhyarujna presses for grant of protection, so
as to enable the Petitioners to approach the Hon'ble Supreme Court.
In the light of the view that we have taken, the prayer is rejected.
(SANDEEP K. SHINDE, J. ) (B. R. GAVAI, J. )
