Sanjay Kumar vs The Punjab National Bank
2023 Latest Caselaw 2934 Jhar

                                                1


         IN THE HIGH COURT OF JHARKHAND AT RANCHI
                        W. P. (C) No. 6696 of 2018
         Sanjay Kumar                           .... .. ... Petitioner(s)
                                    Versus
         1.The Punjab National Bank.
         2.The Circle Head, Circle Office, Punjab National Bank,
           Bokaro
         3.The Chief Manager, Authorized Officer,
           Punjab National Bank, Bokaro
         4. The Branch Manager, Punjab National Bank,
            Hazaribagh Branch, Hazaribagh.
         5. Satyendra Mishra, presently the Chief Manager,
           Authorized Officer, Punjab National Bank,
           Bokaro
         6. Dheeraj Kumar Singh, presently the Branch Manager,
            Punjab National Bank, Hazaribagh.                      .. ... ...Respondent(s)
                        ...........

CORAM : HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY .........

         For the Petitioner(s) :          Ms. Tanya Singh, Advocate
         For the PNB                :     Ms. Amrita Sinha, Advocate
                        ......

07/ 17.08.2023. The instant Writ Petition (Civil) has been filed mainly for the following relief(s) :-

(a) For direction upon the Respondents for quashing letter dated 24.09.2018, sent vide e-mail wherein it was intimated by the respondents to not confirm the auction sale of property held on 13.09.2018;

(b) For commanding upon respondents to perform their part of letter of acceptance of bid dated 13.09.2018 by executing sale certificate in favour of the petitioner.

2. Petitioner is the auction-purchaser who was declared successful bidder and the Letter of Acceptance of bid was sent to the petitioner vide Letter dated 13.09.2018 (Annexure-2 to the Writ Petition). After issuance of the said letter, vide e-mail dated 24.09.2018, decision not to confirm the sale was intimated to the petitioner. Being aggrieved, the instant Writ Petition has been filed.

3. The extract of the impugned letter dated 24.09.2018 by which the sale has not been confirmed reads as under:

"After the completion of the e-auction of said property and after issuance of letter of acceptance of bid, this came to our notice that the technical error of our auction portal restricted the access of other bidder in pacing the bid. We feel that in case e- auction process is challenged in the court of law, we cannot be able to protect your interest which is our first priority. Apart from this there are some other legal issues about which we were confident that these issues will be resolved by 14.09.2018. Unfortunately these issues stand unresolved. However, we are hopeful that these issues will be resolved very soon."

4. It is submitted by learned counsel for the petitioner that the total consideration amount after acceptance of bid was deposited by the petitioner with the Bank within

the stipulated time and there was no fault on the part of the petitioner. The 'e-mail' by which acceptance of deed has been revoked is cryptic without assigning any cogent or convincing reason. The reason cited for non-confirmation of auction sale is that there was some technical error in the process of e-auction portal which restricted the access of other bidders in placing the bid. Secondly there was some other legal issues the details of which have not been disclosed in the said letter.

5. Counter-affidavit has been filed on behalf of the Bank. The instant Writ Petition is contested on the ground of maintainability. The petitioner has efficacious alternative remedy under Section 17 of the SARFAESI Act, 2002. Reliance is placed on the judgment reported in 2018(1) SCC 626 wherein at Para-27 the Hon'ble Supreme Court has held that Section 12(2) confers the power on the Tribunal to examine the issues arising out of measures taken under Section 13(4) including the measures taken by the secured creditor under Rules 8 & 9 for disposal of the secured assets of the borrower.

6. It is submitted that Section 17(2) is wide enough to bring within its compass the auction purchase and the issues arising therefrom.

7. The short question that falls for consideration is, after a party is declared successful in an e-auction and letters are issued to that effect and the consideration amount is deposited, whether the writ petition for confirmation of sale by auction purchaser is not maintainable in view of Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short SARFAESI Act, 2002)?

8. For better appreciation it shall be desirable to extract the relevant part of Section 17 of SARFAESI Act, 2002 which is as under,

[17. Application against measures to recover secured debts].--(1) Any person (including borrower) aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorised officer under this chapter, [may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken:

************* (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) of Section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of Section 13 to recover his secured debt. Further, Section 13(4) reads as under

In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:--

(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;

[(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset:

Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt:

Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt;]

(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor;

(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.

9. From the above provision it is apparent that right of any person (including borrower) under Section 17 to move the Debts Recovery Tribunal arises as and when his aggrieved by any of the measures taken by the secured creditor, referred to in sub-section(4) of Section 13 of SARFAESI Act. In the present case no step has been taken by the Bank which can be said to come within the measures contemplated under Section 13(4). The petitioner is not aggrieved by any such estate and therefore the precondition for invoking Section 17 is not complete. The argument on behalf of the Bank that instant writ petition is not maintainable in view of section 17 is not tenable. The facts of the present case is distinguishable from the authority relied upon on behalf of the Respondent. In (2018)1 SCC 626 the auction purchaser had failed to pay the instalments and consequently the secured creditor forfeited the earnest money under Section 13(4). It was for this reason that Hon'ble the Supreme Court held that the auction purchaser could move in appeal under Section 17. Here the auction purchaser is not at fault and is not aggrieved by any measure taken under Section 13(4), therefore this court is of the view that Section 17 has no application and the writ petition is maintainable.

10. On merit, the Bank which had put the property in question on auction sale is trying to resile from confirming the sale to the auction purchaser, on technical ground that there was some defect in the portal, as a result of which another bidder could not participate. It is intriguing that there was technical error only with respect to one bidder. Further, if at all there was technical issue as a result of which e-auction could not be successfully held on 13.09.2018, it was incumbent on the part of the Bank to forthwith intimate about the failure of such auction to the petitioner. Intimation was given after an inordinate delay on 24.09.2018 about non-confirmation of sale. Delayed information raises many questions about the veracity of the technical glitch. Allegation of demand of illegal gratification for confirming the sale has also been made, and one Complaint Case No.2159/2018 under section 120B/ 409/ 418/ 420 of the IPC was filed by the petitioner against Respondent nos.5 & 6.

11. The conduct of the Bank has not been proper. Bank is an instrumentality of the State, and it is expected of it to maintain high standards of fairness with its customers and others. It will be inequitable to relegate the petitioner and permit the Bank to hold another e-auction with respect to the same subject matter after five years.

Under the aforesaid facts and circumstance the impugned letter dated 24.09.2018 is set aside and the respondent is directed to perform their part in terms of letter of acceptance of bid dated 13.09.2018 within a period of eight weeks from the date of order.

The writ petition is accordingly allowed.

(Gautam Kumar Choudhary, J.) Sandeep/

Uploaded.