Vishal Jayantilal Rajdev vs Indian Overseas Bank
2021 Latest Caselaw 18369 Guj

    C/SCA/18284/2021                            ORDER DATED: 14/12/2021




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            R/SPECIAL CIVIL APPLICATION NO. 18284 of 2021

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                       VISHAL JAYANTILAL RAJDEV
                                 Versus
                         INDIAN OVERSEAS BANK
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Appearance:
MR MONAL S CHAGLANI(10240) for the (s) No. 1,2
MR ANIP A GANDHI(2268) for the Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                            Date : 14/12/2021
                             ORAL ORDER

1.Heard learned advocate Mr. Monal Chaglani for the petitioners and learned advocate Mr. Anip Gandhi for the respondent-Bank.

2.By this petition under Article 226 of the Constitution of India, the petitioners have prayed for the following reliefs:

"A.Your Lordships be kindly pleased to admit the present Writ Petition;

B. Your Lordships be kindly pleased to issue a Writ of Mandamus or any other kind of Writ which this Hon'ble Court deems fit or any other kind of direction or order which this Hon'ble Court deems fit against Respondent, whereby Respondent is ordered to perform its duty u/Rule 9(6) of the Security Interest (Enforcement) Rules, 2002 i.e. Respondent be kindly ordered to issue

C/SCA/18284/2021 ORDER DATED: 14/12/2021

Sale Certificate and execute a Sale Deed in favour of the petitioners and hand over the possession of property in bid upon receipt of residue bid amount.

Alternatively

B. Your Lordships be kindly pleased to issue a Writ of Mandamus or any other kind of writ or any other kind of direction or order against Respondent that Respondent may refund 25% of bid amount of Petitioners lying with it to the Petitioners back with Interest which this Hon'ble Court deems fit.

C. Your Lordships be kindly pleased to allow an Interim Relief pending admission and final disposal of this Writ Petition that Respondent shall not forfeit 25% of the bid amount deposited by the petitioners lying with it.

D. Your Lordhsips be kindly pleased to allow any other relief which this Hon'ble Court deems fit in favour of the Petitioners.

E. Your Lordships be kindly pleased to impose costs upon Respondent in favour of Petitioners."

3.Brief facts of the case are that the petitioners, pursuant to the public notice dated 25.08.2021, participated in the auction proceedings conducted by the respondent-Bank for sale of the property under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and as per the Rules 8 and

C/SCA/18284/2021 ORDER DATED: 14/12/2021

9 of the Security Interest (Enforcement)Rules, 2002 [for short 'Rules 2002'].

4.It is the case of the petitioners that the petitioners were declared as highest auction bidder in the auction proceedings with regard to the property situated at Bungalow No. 1, Sun Residency, Sama Savli Road at Vadodara. The respondent-Bank issued a sale confirmation letter dated 16.09.2021 in favour of the petitioners.

5.The petitioners thereafter requested the respondent-Bank for issuance of the sale certificate and executed the sale deed on deposit of the remaining amount of the sale consideration of 75% as per the Rule 9 of the Rules, 2002. The respondent-Bank extended the time to deposit 75% of the bid amount vide letter dated 30.09.2021 upto 14.12.2021. The petitioners in the meanwhile came to know that there was pending litigation being Securitization Application No. 268 of 2020 and S.A. No. 269 of 2020 between the borrower and the respondent-Bank with Debt Recovery Tribunal-II at Ahmedabad [For short 'DRT'] and the respondent-Bank was restrained by the DRT by oral direction not to part with the

C/SCA/18284/2021 ORDER DATED: 14/12/2021

possession of the property in question which is sold to the petitioners in the auction by the respondent-Bank. Therefore, the petitioners were informed that the respondent-Bank shall not extend the time beyond 90 days as per the Rule 9 of the Rules 2002. The petitioners have therefore filed this petition with the aforesaid prayers.

6.This Court passed the following order dated 08.12.2021:

"Heard learned advocate Mr.Monal Chaglani for the petitioners.

Learned advocate Mr.Chaglani submitted that in view of the email dated 28th September, 2021 sent by the respondent Bank, the petitioners are not interested to proceed further with the deed accepted by the respondent Bank in the auction held on 15th September, 2021.

Considering the above submission, issue Notice returnable on 10th December, 2021.

Direct service is permitted. To be listed on top of the Board."

7.In response to the notice issued by this Court learned advocate Mr. Anip Gandhi for the respondent-Bank submitted that the respondent-bank cannot extend time period beyond 90 days in view of the Rule 9 of the Rules 2002 and unless and until the pending

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litigation before the DRT is over, the respondent-Bank cannot execute the sale deed and issue sale certificate in favour of the petitioners. Learned advocate Mr. Gandhi therefore submitted that the respondent-Bank is bound by the oral directions issued by the DRT and if the petitioners do not deposit the remaining 75% amount by today, 25% of sale amount deposited by the would be forfeited for breach of the condition and as per the desire expressed by the petitioner, this Court may pass appropriate order, which will be binding upon the respondent Bank either to extend the time to deposit the amount or to refund the amount and the respondent-Bank has no objection in refunding the amount if directed by this Court.

8.Having heard learned advocates for the respective parties and having gone through the facts of the case it appears that the DRT could not have issued oral directions to the respondent Bank in view of the decision of the Apex Court dated 31.08.2021 in Criminal Appeal No. 884 of 2021 in case of Salimbhai Hamidbhai Memon vs. Niteshkumar Maganbhai Patel and anr wherein it is held by the Apex Court as under:

C/SCA/18284/2021 ORDER DATED: 14/12/2021

"24. Oral directions of this nature by the High Court are liable to cause serious misgivings. Such a procedure is open to grave abuse. Most High Courts deal with high volumes of cases. Judicial assessments change with the roster. Absent a written record of what has transpired in the course of a judicial proceeding, it would set a dangerous precedent if the parties and the investigating officer were expected to rely on unrecorded oral observations.

25. We are conscious of the fact that in civil proceedings, Counsel appearing on behalf of the contesting parties do in certain cases mutually agree before the court to an ad interim arrangement and agree among themselves to record the terms of the arrangement by an exchange of correspondence between the advocates. This can typically happen when civil disputants are attempting an amicable settlement. Civil cases involve disputes between two private contestants. In criminal proceedings, apart from the accused and the complainant, there is a vital interest of the State and of society in the prosecution of crime. The procedure which was followed by the Single Judge must therefore be eschewed in the future. Judges speak through their judgments and orders. The written text is capable of being assailed. The element of judicial accountability is lost where oral regimes prevail. This would set a dangerous precedent and is unacceptable. Judges, as much as public officials over whose conduct they preside, are accountable for their actions."

C/SCA/18284/2021 ORDER DATED: 14/12/2021

9. In view of the above decision of the Apex Court, the DRT is directed to pass the orders in writing instead of issuing the oral directions to the respondent-Bank.

10. In the facts of the case as the petitioners are not interested to proceed further with the purchase of the property in question the respondent-Bank is directed to refund the amount deposited by the petitioner within a period of one week from today. Petition is accordingly disposed of. Notice is discharged.

(BHARGAV D. KARIA, J) JYOTI V. JANI