Mer Bharatbhai Kalubhai vs Bank Of Baroda
2023 Latest Caselaw 1965 Guj

      C/SCA/16781/2022                                   ORDER DATED: 01/03/2023




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
              R/SPECIAL CIVIL APPLICATION NO. 16781 of 2022
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                         MER BHARATBHAI KALUBHAI
                                  Versus
                             BANK OF BARODA
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Appearance:
MR PRIYANK DAVE FOR MR. TIRTHRAJ PANDYA(6685) for the
Petitioner(s) No. 1
DS AFF.NOT FILED (N) for the Respondent(s) No. 2
MS NALINI S LODHA(2128) for the Respondent(s) No. 1
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     CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
                      Date : 01/03/2023
                       ORAL ORDER

Rule. Learned advocate Ms.Nalini Lodha waives service of notice of rule for the respondent no.1.

1. The present writ petition has been filed seeking the following prayers:-

"6A. Quash and set aside communication dated 05.08.2022 at Annexure-G to the petition and direct Respondent No.1 to refund amount of Rs.17,26,250/- deposited by the petitioner with Respondent No.1 towards 25% of the bid amount for the purpose of purchasing said secured asset.

Alternatively

B. Direct Respondent No.1 resolve the issue of title of the secured asset by executing registered relinquishment deed from Pravinbhai Bhogilal Patel and Bhartiben Bhogilal Patel before demanding remaining 75% of the bid amount i.e. Rs.51,78,750/- from the petitioner"

2. The petitioner is seeking quashing and setting aside the communication dated 05.08.2022, whereby the respondent-Bank of Baroda has asked him to deposit the balanced amount of Rs.51,78,750/- (75% of the bid amount) on or before 20.08.2022.

C/SCA/16781/2022 ORDER DATED: 01/03/2023

3. As the prayer clause suggests that the petitioner has not challenged the sale notice, however, he is challenging the subsequent communication issued by the respondent-Bank and further in the alternative, the petitioner has prayed for a direction on the respondent to resolve the issue of title of the secured asset by executing a registered relinquishment deed from Pravinbhai Bhogilal Patel and Bhartiben Bhogilal Patel before demanding remaining 75% of the bid amount.

4. The brief facts of the case are as under:-

4.1. The issue in the present case pertains to Tenement No. 28, having land admeasuring 274 sq. mtrs together with construction of 167 sq. mtrs, situated on the land bearing Survey No. 50+52/1+2, New Survey No. 2469 at Village: Bavla. Taluka: Bavla, District: Ahmedabad (herein after referred to as "Secured Asset")

4.2. On 13.05.2022, the respondent no. 1 published E-auction notice in Sandesh and Times of India with respect to the secured asset for a reserved price of Rs. 55,05,000/-. The petitioner participated in the E- auction and he was declared as highest bidder for the said secured asset and his bid of Rs.69,05,000/- was declared as highest bid. Accordingly, vide letter dated 31.05.2022, the respondent no.1 called upon the petitioner to deposit 25% of the bid amount forthwith and remaining 75% of the amount within 15 days from the date of auction. The petitioner deposited an amount of Rs.17,25,250/- with the respondent no.1, i.e. 25% of the total bid amount.

4.3. It appears that some other auction purchaser, who had purchased the said secured asset in the earlier round of the auction sale, filed Special

C/SCA/16781/2022 ORDER DATED: 01/03/2023

Civil Application No. 10125 of 2022 before this Court challenging the E- auction sale notice dated 13.05.2022. Vide order dated 08.06.2022, this Court passed an order of status quo in view of non-availability of the Debt Recovery Tribunal, Ahmedabad (DRT), and hence, respondent no.1 was restrained from accepting remaining 75% of the sale consideration from the petitioner.

4.4. Thereafter, by order dated 20.07.20222, this Court disposed of Special Civil Application No. 10125 of 2022 and accordingly, vacated the interim relief with effect from 27.07.2022. Under the circumstances, vide letter dated 28.07.2022, respondent no. 1 asked the petitioner to deposit the remaining 75% of the bid amount.

4.5. It is the case of the petitioner that, the search report with regard to title of the property in question of the secured asset was done by him and it was known that the said property was in the joint ownership of (i) Mr. Kaushik Bhogilal Patel; (ii) Pravinbhai Bhogilal Patel; and (iii) Bhartiben Bhogilal Patel.

5. Learned advocate Mr.Priyank Dave appearing for the petitioner has submitted that in fact the sale notice itself was misleading and defective, which was issued by the respondent no.1 since the same does not bear the correct facts of the ownership of the secured asset. It is submitted that only after the petitioner obtained the title clearance certificate, the report therein showed that the property (secured asset) is in the joint ownership and there was a release deed filed on 06.12.2018 by Pravinbhai Bhogilal Patel, Bhartiben Bhogilal Patel and Kaushik Bhogilal Patel on a stamp paper of Rs.50/-. Thus, it is submitted that the same being an unregistered document, the title of the property being deffective and the petitioner

C/SCA/16781/2022 ORDER DATED: 01/03/2023

having been mislead by the respondent no.1, he should not be coerced to deposit the remaining 75% of the bid amount i.e. Rs.51,78,750/-. He has also submitted that the petitioner has not paid the remaining 75% amount of bid in view of the defective title.

6. Learned advocate Mr.Dave, in support of his submissions, has placed reliance on the judgment of the High Court of Madras in the case of Jai Logistics vs. The Authorized Officer Syndicate Bank dated 12.07.2010 passed in Writ Petition No.27079 of 2009. Reliance is also placed by him on the judgment of the High Court of Jammu & Kashmir and Ladakh at Jammu in the case of S.K.Bakshi vs. Punjab National Bank and others dated 30.11.2022 passed in Writ Petition (C) No.465/2021. Thus, it is submitted that since initial action of the respondent no.1 itself is premised on an unregistered document, this writ petition may be allowed and the impugned communication may be set aside.

7. Per contra, learned advocate Ms.Nalini Lodha appearing for the respondent-Bank has submitted that the writ petition is ill-conceived and the same is required to be rejected. In support of her submission, she has placed reliance on the terms and conditions of the sale of secured asset, which was declared on 12.05.2022. She has placed reliance on the condition nos.15 and 16 and has submitted that the petitioner was given ample opportunities to inspect all the documents, right, title of the property in question. It is submitted that the petitioner was required to undertake necessary exercise, as envisaged under condition nos.15 and 16 before participating in the E-auction, however, having accepted those conditions, it is not open for him to challenge the aforesaid communication.

C/SCA/16781/2022 ORDER DATED: 01/03/2023

7.1. Learned advocate Ms.Lodha has further submitted that as per Rule 4(9) of the Security Interest (Enforcement) Rules, 2002 (for short "the Rules"), the petitioner is supposed to deposit balanced 75% of the bid amount on 20.08.2022. She has submitted that the auction was held on 31.05.2022 and the respondent-Bank granted extension of time upto 20.08.2022 as requested by the petitioner vide letter dated 05.08.2022, however, the petitioner has not deposited the aforesaid amount after the last extension was granted to him. Further, reliance is placed by her on Rule 9 (5) of the Rules, which empowers the Bank to forfeit the amount deposited by the petitioner. Finally, she has submitted that as on today no one has raised any objection with regard to the secured asset and neither any family member of the Kaushik Bhogilal Patel nor anyone has claimed in the right, title or interest in the property in question and hence, the petitioner, in order to resile from the payment paying the rest of the 75% amount, has filed the writ petition.

8. I have heard the learned advocates appearing for the respective parties.

9. The aforementioned facts are not in dispute. The respondent no.1- Bank has held auction on 31.05.2022 with regard to secured asset and the petitioner was declared as the highest bidder. The petitioner has also paid 25% of the bid amount, however, since he failed to pay the balanced amount of 75% of the bid amount i.e. an amount of Rs.51,78,750/-, the respondent-Bank issued the impugned communication for paying the aforesaid amount.

10. The entire case of the petitioner hinges only on one aspect i.e. the

C/SCA/16781/2022 ORDER DATED: 01/03/2023

report of the title clearance, which was obtained by him on 04.08.2022 i.e. after participating in the auction proceedings. The report dated 04.08.2022 indicates that the title of the concerned property is not clear and marketable as the previous co-owners have not released their right, title, share and interest of the said property in favour of Kaushikbhai Bhogilal Patel. The aforesaid report is prepared in view of the release deed dated 06.12.2018 executed by Pravinbhai Bhogilal Patel, Bhartiben Bhogilal Patel and Kaushik Bhogilal Patel, who is the releasee. It is also not in dispute that as on today no one has lodged or registered, claim against the aforesaid property and have not questioned against the right, title or interest of the secured asset.

11. At this stage, it would be apposite to incorporate the conditions for sale of the secured asset dated 12.05.2022. The same reads as under:-

"15.The Intending purchaser can inspect the property on date and time mentioned above at his/her expense. For inspection about the title document & other documents available with the Bank, the intending bidders may contact Bank of Baroda Branch during office hours prior at least two days before auction date.

16. The property is being sold on "As is where is", "As is what is" and "Whatever there is" basis and the intending bidders should make their own discreet independent inquiries & verify the concerned Registrar/SRO/Revenue Records/other Statutory authorities regarding the encumbrances and claims/rights/dues/charges of any authority such as Sales Tax/Excise/GST/Income Tax besides the Bank's charge and shall satisfy themselves regarding the, title nature, description extent, quality, quantity, condition, encumbrance, lien, charge, statutory dues, etc. over the property before submitting their bids. The e-auction advertisement does not constitute and will not be deemed to constitute any commitment or any representation of the bank. The Authorised Officer/Secured Creditor shall not be responsible in any way for any third party encumbrances/claim/rights/dues. No claim of whatsoever nature regarding the property put for sale charges/encumbrances over the property or on any other matter etc., will be entertained after submission of the online bid."

C/SCA/16781/2022 ORDER DATED: 01/03/2023

A plain and simple reading of the aforesaid conditions clarify that the intending purchaser can inspect the property on date and time mentioned therein by inspecting the title document and other documents available with the Bank. The condition no.16 specifically mentions that the property is being sold on "As is where is", "As is what is" and "Whatever there is" basis and the intending bidders should make their own discreet independent inquiries & verify the concerned revenue records etc. as mentioned therein. It is also clarified that the intending purchaser has to verify the title nature, lien, charge, statutory dues, etc. of the secured asset before submitting their bids.

12. Thus, the petitioner was supposed to verify all the aspects of the secured asset before participating in the bid. After participating in the bid, the petitioner cannot take a volte-face and refuse to pay the balanced 75% amount merely on the basis of a report, which he has obtained after participating in the auction. The respondent-Bank has in no uncertain terms clarified their stand by incorporating the aforesaid conditions of the sale assets. Hence, the Bank cannot be fastened with the liability of resolving the title of the property in absence of any resolving clause in the conditions of sale.

13. Reliance is placed on the judgments by the petitioner cannot rescue the petitioner since the same do not in any manner indicate that such conditions were incorporated before the property in question was put to auction. Hence, the writ petition fails. Rule is discharged.

(A. S. SUPEHIA, J) ABHISHEK/51