M/S Shiv Kumar Aggarwal & Ors. vs Development Credit Bank Ltd. & ...
2012 Latest Caselaw 3735 Del

       *       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                         Judgment delivered on 29.06.2012

+      WP(C) No. 3799/2012


       M/s Shiv Kumar Aggarwal & Ors.                                   ... Petitioners


                                       Versus


       Development Credit Bank Ltd. & Anr.                             ...Respondents



Advocates who appeared in this case:
For the Petitioners   : Mr. Sudhir Nandrajog with Mr Ravi Data and Mr Rajesh Sharma,

For the Respondents : Mr Hashmat Nabi, Advocate for Respondent No.1
                      Mr. Akhil Sibal, Mr Anil Karnwal and Mr Suresh Arora for the
                      Respondent No. 2/Caveator.

CORAM:
HON'BLE MR. JUSTICE V.K. JAIN
HON'BLE MS. JUSTICE PRATIBHA RANI

                            JUDGMENT

V.K. JAIN, J. (ORAL)

CM No. 7966/2012 (Exemption)

Allowed, subject to just exceptions.

The application stands disposed of.

Cav 630/2012

Since the caveator/Respondent No. 2 has put in appearance, caveat stands

discharged.

WP (C) No. 3799/2012 & CM No. 7965/2012 (under Section 151 CPC)

1. This writ petition is directed against the order dated 27.06.2012 passed by

Debt Recovery Appellate Tribunal (DRAT) in Appeal No. 110/2012 in S.A. No.

10/2010 (Delhi-II).

2. The petitioners are co-owners of Property No. C-134-D, Surya Nagar,

Ghaziabad. Pursuant to notice issued under Section 13(2) of Securitisation and

Reconstruction of Financial Assets and Enforcement of Security

Interest (SARFAESI) Act, possession of the aforesaid property was taken by

defendant No. 1--Development Credit Bank Limited on 17.10.2008. The

possession of the aforesaid property was handed over to the Court Receiver on

23.10.2010. Pursuant to the order passed by DRAT, the above-referred property

was put to auction. The highest bid of Rs 2.45 crore was received as against the

reserved price of Rs 2.40 crore. The Tribunal permitted the petitioners to bring a

better buyer. This order was passed on account of the petitioners challenging the

order dated 23.11.2011, whereby the reserved price was fixed by DRAT at Rs 2.40

crore. Pursuant to the permission granted by the Tribunal, the petitioners

introduced two buyers, namely, M/s Quadros Impex Pvt. Ltd., which offered Rs

2.50 crore and M/s ADPS Consultants Pvt. Ltd. which offered Rs 2.55 crore. At

this stage, respondent No. 2 M/s G.C.G. Enterprises Private Ltd. entered the fray

and expressed willingness to purchase the aforesaid property. The Tribunal

directed inter se bidding amongst the four bidders introduced by the petitioners,

i.e., the bidder who had given bid of Rs 2.45 crore, respondent No. 2 and two

bidders, namely, M/s Quadros Impex Pvt. Ltd., and M/s ADPS Consultants Pvt.

Ltd. The bidders were also permitted to withdraw their offer before start of the

process of inter se bidding. M/s Quadros Impex Pvt. Ltd. withdrew its offer and

consequently, the inter se bidding took place only amongst three bidders.

Respondent No. 2, which gave the bid for Rs 311 lakh was declared as the highest

bidder. Admittedly, sale certificate to respondent No. 2 has already been issued on

30.05.2011 though it has not been registered so far. The grievance of the petitioners

is that 25% of the bid amount of Rs 311 lakh was not deposited by respondent No.

1 on 19.04.2011 when the inter se bidding took place, the same having been

deposited only on 23.04.2011. Yet another grievance of the petitioners is that the

time for depositing the balance 75% of the sale price was extended by defendant

No. 1 which it could not have done. The petitioners filed IA No. 422/2011 seeking

fresh auction and also an order forfeiting the amount deposited by respondent No.

2. Yet another application being IA No. 781/2011 was filed by them seeking re-

auction of the property and permission to bring a better buyer, who was ready to

offer Rs 325 lakh. Vide order dated 19.03.2012, both these applications were

dismissed by the Tribunal. Feeling aggrieved by the order dated 19.03.2012, the

petitioners filed the appeal which is still pending before DRAT.

3. Vide order dated 03.05.2012, DRAT directed the petitioners to deposit 25%

of the notice amount of Rs 3,13,80,466 /- within two weeks. This order was

necessitated on account of the provisions contained in Section 18 of SARFAESI

Act, which, to the extent, it is relevant provides that no appeal shall be entertained

unless the borrower has deposited with the Tribunal 50% of the amount of debt due

from him, as claimed by the secured creditors or determined by the Debts Recovery

Tribunal, whichever is less and which further provides that the Appellate Tribunal

may, for the reasons to be recorded in writing, reduce the amount to not less than

25% of debt referred to in the second proviso. The petitioners, however, failed to

comply with that order. Vide order dated 18.05.2012, DRAT granted four days

more to the petitioners to comply with the order. However, the petitioners still did

not comply with the orders dated 03.05.2012 and 18.05.2012. Vide order dated

11.06.2012, DRAT noted the contention of the learned counsel for the petitioners

that the appellants before it (the petitioners before this Court) had made

arrangement of the money and demand draft of Rs 20 lakh and two cheques of Rs

25 lakh each were ready with him, whereas a sum of Rs 10 lakh had already been

deposited earlier. DRAT condoned the delay in deposit and directed that the

demand draft and the cheques be given to the bank officer for deposit in the loan

account of the petitioners before this Court. It was made clear that the payment

was subject to clearance of the cheques and if the cheques were cleared, the interim

order granted earlier shall continue, otherwise the bank shall be at liberty to

proceed as per law. It would be appropriate to note that the interim order passed

by DRAT was that in case 25% of the notice amount was deposited, the bank shall

not hand over the possession in question to the auction purchaser. However, two

cheques of Rs 25 lakh each which the petitioners before this Court handed over to

the counsel for the bank before DRAT on 11.06.2012 were dishonoured. As a

result, there was default in compliance of the order dated 11.06.2012. The

petitioners before this Court then filed IA No. 200/2012, which came to be

dismissed vide impugned order dated 27.06.2012.

4. Since the appeals filed by the petitioners are pending before DRAT, we

refrain from making any observations on the merits of the case set up by the

petitioners, lest our observations prejudice the appeals pending before DRAT. But,

we would like to say that when cheques are handed over by a party to the litigation

to another party in the Court, there is an implicit assurance given to the Court that

these cheques, when presented to the bank will be honoured. We would, at this

stage, also like to note again that the learned counsel appearing for the petitioners

before DRAT on 11.06.2012, had made a categorical statement that the funds had

been arranged by the petitioners, which clearly implied that they had sufficient

money with them for encashment of the cheques which were being handed over to

the bank officer before DRAT. The petitioners, therefore, failed to honour the

implied assurance, which they gave to the DRAT, while handing over two cheques

of Rs 25 lakh each to the bank on 11.06.2012. We feel that DRAT has been quite

indulgent while dealing with the appeal of the petitioners. DRAT did not insist on

deposit of 50% of the notice amount and directed deposit of the minimum

permissible amount. The time given for the deposit was extended initially by four

days and thereafter, cheques were taken instead of insisting upon payment by pay

orders/bank drafts being given to the bank. Considering the conduct of the

petitioners, we are of the view that they do not deserve any further indulgence in

the matter.

5. The learned counsel for the respondent No. 2 has, in order to address the

apprehensions of the petitioners, states before us, on instructions from Mr Vijay

Verma, Manager/authorized representative of respondent No. 2, that respondent

No. 2 shall not (i) create any third party interest in the property in question and

shall not hand over possession of the property or any part of it to any other person;

(ii) shall not induct any person in this property in any capacity; (iii) shall not carry

out any addition, alteration or repair in the aforesaid property, without prior

permission of the Tribunal; (iv) in case the appeals pending before the DRAT are

allowed, shall hand over peaceful and vacant possession of the aforesaid property

to the Court Receiver. We also direct that delivery of possession by Court Receiver

to respondent No. 2 will not create any equities in its favour.

With these directions, the writ petition stands disposed of.

V.K.JAIN (VACATION JUDGE)

PRATIBHA RANI (VACATION JUDGE)

JUNE 29, 2012 bg