Amarnath Pandey vs The Bank Of Baroda
2023 Latest Caselaw 1913 Jhar

IN THE HIGH COURT OF JHARKHAND AT RANCHI
         W.P. (C) No. 5360 of 2021

Amarnath Pandey           ...  ...       ...   ...   Petitioner
                          Versus
1. The Bank of Baroda
2. The Zonal Manager, Bank of Baroda, Bihar, Jharkhand & Orissa
   Zone, Patna
3. The Regional Manager, Bank of Baroda, Jamshedpur
4. The Chief Branch Manager, Bank of Baroda, Bokaro
5. The Authorised Officer Under SARFESI Act (e-auction R.S.
   Enterprises) Bank of Baroda, Bokaro Steel City Branch, Bokaro.
6. The Circle Officer, Chas.
                                 ...    ...     ...   Respondents
                         ---------
CORAM:         SRI SANJAYA KUMAR MISHRA, C.J.
                    SRI ANANDA SEN, J.
                         ---------
For the Petitioner:      Mr. Atul Rai, Advocate
                         Mr. Amit Kumar Asthana, Advocate
For the Bank:            Mr. P.A.S. Pati, Advocate
For Respt No.6.          Mr. Ashok Kumar Yadav, Sr. S.C.-I
                         Mr. Ranjan Kumar, A.C. to Sr. S.C.-I
                         ---------

07/Dated: 04.05.2023

      Upon hearing the learned counsel for the parties, this Court

passed the following, (Per, Sanjaya Kumar Mishra, C.J.)

                    ORDER

1. By filing this writ petition under Article 226 of the Constitution

of India the petitioner has prayed for issuance of writ or writs in the

nature of certiorari to quash the sale certificate dated 20.05.2014

issued in favour of the petitioner as he was declared as successful

bidder in an e-auction conducted by the respondents-bank on

29.03.2014 for the sale of immovable property consisting of 200

decimals of land in Mouza Durga bearing plot no. 3120, Khata No. 17,

P.S. No. 49 in the district of Bokaro.

He has also prayed for a writ of mandamus directing the

respondents bank to return tender money of Rs.6,60,000/- along with

an interest @ 18% per annum on the ground that in spite of the

complete payment made by the petitioner, the respondents-bank has

refused to register the land in the name of the petitioner and sitting

over the matter since 2014. He has also prayed for a direction to pay

compensation to him by the bank.

2. The facts of the case are mostly not in dispute. The petitioner

is a businessman. He, in response to the e-auction conducted by the

Bank of Baroda on 29.03.2014 for sale of immovable property

consisting of 200 decimals as described above, participated in the

e-auction process. He deposited sum of Rs. 64,000/- on 25.03.2014,

as a pre-requisite condition for participation in the e-auction. The

petitioner was declared as successful bidder and advised to deposit a

sum equal to 25% of the total bid value of Rs. 6,60,000/- immediately.

The petitioner deposited the amount of Rs. 1,65,000/- through RTGS

on 02.04.2014. A letter of demand was issued by the Chief Manager,

Bank of Baroda on 10.04.2014 for depositing the remaining amount of

Rs. 4,31,000/- on or before 23.04.2014 i.e. equivalent of 75% of the

sale of the auction price less the EMD amount. The petitioner

complied the instructions given by the Chief Manager, Bank of Baroda

and paid the remaining amount on 21.04.2014 whereas, the deadline

was 23.04.2014. After full payment of the tendered money the Bank of

Baroda issued sale certificate regarding sale of land through e-auction

in favour of the petitioner on 20.05.2014 and further gave commitment

to the petitioner that very soon the sale deed for land in question will

be registered in his name and all documents related to the land will be

handed over to him at the earliest. The petitioner after issuance of

sale certificate and thereafter failure on the part of the Bank to execute

the sale deed, sent letters to the Chief Manager on several occasions

but, it yielded no result, hence the writ petition was filed.

In the meantime, the petitioner has also approached the

District Consumer Forum but, the same was dismissed and thereafter,

preferred an appeal to the State Consumer Commission, which was

withdrawn and the writ application has been filed.

3. Counter affidavit has been filed in this case.

4. The Bank has taken the plea that the writ petition has been

preferred after the period of limitation to seek statutory remedy and is

not maintainable in view of the fact that the petitioner has alternative

and efficacious remedy in approaching the Debts Recovery Tribunal,

Ranchi for redressal of his grievances. As far as the issue of

registration of the sale certificate is concerned, the Bank takes the

stand that the lawful cost of the same is to be paid by the petitioner

and in absence of the deposit of all the lawful charges for registration,

no registration of the sale could take place.

5. The learned counsel for the petitioner would submit that he has

been running from pillar to post for the past 9 years, even though he

has become successful in the bid and in spite of his several

representations to the Chief Manager, the registration has not been

carried out in his name.

6. The learned counsel for the respondent submits that the

requisite fee for registration, etc., has to be borne by the petitioner but,

we do not find any letter of request or any communication from the

side of the Bank addressed to the petitioner asking him to deposit the

money with the Bank. On the face of the pleadings exchanged in this

case and the submissions made by the learned counsel, three

questions need to be answered and they are enumerated as follows:-

I. Whether the writ petition is maintainable in view of the fact

that the petitioner has an alternative efficacious remedy of

approaching the Debts Recovery Tribunal under Section

17 of the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002

(hereinafter referred as "the SARFAESI Act" for brevity)?

II. Whether a writ of mandamus can be issued, directing the

Bank to refund the money to the petitioner along with

admissible interest?

III. To what other reliefs, the petitioner is entitled to?

7. At the outset, this Court is of the opinion that it is not disputed

that the petitioner has an alternative efficacious remedy. However, it is

also apparent from the record that the petitioner has filed the writ

petition on 22.12.2021 and in the meantime, more than one year and

four months have elapsed and there is no justification to relegate the

petitioner to the Debts Recovery Tribunal, Ranchi for redressal of his

grievance. If, at all, the issue of maintainability is to be considered, the

same should have been considered at the threshold, when the matter

was taken up at the first instance.

8. Be that as it may, the principle of not entertaining the writ

application under Article 226 of the Constitution, in case of availability

of efficacious and alternative remedy, is internal restrain created by

the courts and there is no such provision anywhere in the Constitution

of India or any other statute. In the case of Whirlpool Corporation

Vs. Registrar of Trade Marks, Mumbai & others (1998) 8 SCC 1,

the Hon'ble Supreme Court has held that in four circumstances, even

if there is an alternative, efficacious remedy is available, a writ petition

is maintainable. The Hon'ble Supreme Court has held that in case

there is a violation of fundamental rights, violation of principles of

natural justice, and where the order passed is without jurisdiction or

that the vires of the statute is challenged, a writ application is

maintainable. In addition to that, we consider it appropriate that in

cases where the facts are admitted in substance and there is no

necessity of giving any factual finding on any issue, a writ Court

should in appropriate case, entertain a writ application even if there is

an alternative and efficacious remedy available to the petitioner.

9. Learned counsel for the respondent would rely upon two

judgments of the Hon'ble Supreme Court to buttress his arguments. In

the case of Agarwal Tracom Private Limited Vs. Punjab National

Bank and others, (2018) 1 SCC 626, the Hon'ble Supreme Court has

held that the reason that Section 17(2) empowers the tribunal to

examine all the issues arising out of the measures taken under

Section 13(4) including the measures taken by the secured creditor

under Rules 8 and 9 for disposal of the secured assets of the

borrower. The expression "provisions of this Act and the Rules made

thereunder" occurring in sub-sections (2), (3), (4) and (7) of Section 17

of the SARFAESI Act clearly suggests that it includes the action taken

under Section 13(4) as also includes therein the action taken under

Rules 8 and 9 which deal with the completion of sale of the secured

assets. In other words, the Hon'ble Supreme Court further held that

the measures taken under Section 13(4) would not be completed

unless the entire procedure laid down in Rules 8 and 9 for sale of

secured assets is fully complied with by the secured creditor. It is for

this reason, the Hon'ble Supreme Court further held that Tribunal has

been empowered by Sections 17(2), (3) and (4) to examine all the

steps taken by the secured creditor with a view to find out as to

whether the sale of secured assets was made in conformity with the

requirements contained in Section 13(4) read with the Rules or not?

The facts of the aforesaid reported case are that the appellant

in the case was declared as the successful bidder and his bid was

accepted by the Punjab National Bank followed by execution of

memorandum of understanding between the appellant and the PNB.

The PNB also sent a letter to the appellant stating that the entire

plant, machinery, land and the building is auctioned in favour of the

appellant. The letter also authorized the appellant to dismantle and

sell the scrap plant and the machinery which was lying at

the Borrower's factory's premises after depositing the necessary

installment of sale amount, as agreed upon between the parties in the

memorandum of understanding. The appellant, however, failed to pay

the regular installments towards sale money in terms of memorandum

of understanding to PNB and sought extension of time to pay and

remove the scrap material from the site. This gave rise to the disputes

between the parties, namely, PNB, auction purchaser and the

Borrower before the Debts Recovery Tribunal, Lucknow. A S.A. was

filed wherein, an order was passed on 03.07.2014 directing the

appellant not to remove any material from the factory premises. The

appellant then wrote a letter to PNB requesting them to refund their

money with interest. This led to another dispute between the parties

which was filed in the DRT and then before the appellate authority,

i.e., DRAT and finally, in the High Court at Allahabad by filing a writ

petition, which was disposed of finally on 29.05.2015 observing

therein that since the appellant had failed to comply the terms of

memorandum of understanding inasmuch as the appellant having

failed to deposit the requisite installment of sale money, the PNB

cannot proceed with the auction sale held on 17.06.2014 nor can the

appellant be permitted to remove the scrap material lying in the

factory premises.

This led the PNB to forfeit the appellant's deposit by their letter

dated 26.06.2015. The appellant objected to the action of PNB by

letters and filed the writ petition in the High Court of Delhi challenging

therein the action of PNB in forfeiting the appellant's deposit of money

wherein the order passed by the Delhi High Court was challenged

before the Hon'ble Supreme Court and the question of availability of

alternative remedy and the principle of not entertaining writ application

in view of the availability of efficacious and alternative remedy was

issued and in such a situation, the above observations have been

made.

Clearly, the facts of the reported case and the present case

are distinguishable. In this case, the petitioner is the auction purchaser

and he has deposited the money with the Bank. But the Bank did not

carry out its part of the agreement i.e. execution of the sale deed in his

favour and registering the same and also giving a possession of the

land in question, so the observation made in the case of Agarwal

Tracom Private Limited (supra) does not appear to be applicable to

the present case.

10. Learned counsel for the respondents would further rely upon

an unreported judgment delivered by the Hon'ble Supreme Court on

17.04.2023 in the case of M/s South Indian Bank Ltd. & Ors Vs

Naveen Mathew Philip & Anr ETC. ETC., Civil Appeal Nos. 002861-

002862 of 2023 arising out of S.L.P. (Civil) Nos. 22021-22022 of 2022,

copy of which is produced having been downloaded from the internet.

In the case of M/s South Indian Bank Ltd. (Supra) the question

arose whether the High Court should entertain an application in which

challenge is made about the actions taken by the Bank under Section

13(2) and (4) of the SARFAESI Act wherein, dealing with this issue

the Hon'ble Supreme Court has held that the settled position of law on

the interference of the High Court invoking under Article 226 of the

Constitution of India in commercial matters, where an effective and

efficacious alternative forum has been constituted through a statute

should not be entertained. There is no dispute regarding the settled

principle of law and in fact, the Hon'ble Supreme Court in the case of

Authorised Officer, State Bank of Travancore & Another Vs.

Mathew K.C., (2018) 3 SCC 85, has held that a writ application

challenging action of the bank under Section 13(2) and (4) of the

SARFAESI Act is not maintainable. However, the facts of this case are

totally different. In this case the petitioner being auction purchaser is

not challenging the action taken by the bank under Section 13(2) or

13(4) of the SARFAESI Act and it simply pleads that the Bank sitting

over the matter for more than 9 years, after accepting the money, i.e.,

the bid amount in total and not executing the sale deed in his favour.

11. A similar question arose before the Hon'ble Supreme Court in

an unreported case arising out of S.L.P. (Civil) Nos. 17470 of 2019

decided on 11.04.2023 in the case of Mohd. Shariq Vs. Punjab

National Bank and others.

In that case, the judgment and order of the Division Bench of

the High Court of Uttarakhand, Nainital whereby, while reversing the

findings returned by the learned Single Judge upholding the re-auction

proceedings initiated by the first respondent, i.e. Punjab National

Bank-Secured Creditor held on 01st May, 2014 and granting liberty to

the appellant to initiate independent proceedings before the

competent forum for recovery of the amount which stood forfeited by

the first respondent, was called in question.

The facts of that case are that the third respondent borrowed

money from the first respondent. However, on his failure and its

account being declared as Non Performing Assets notices were

issued under the SARFAESI Act and auction notice was published.

The appellant, who participated in the auction proceeding was

declared the successful bidder and his furnished bid of

Rs. 2,01,00,000/- was accepted and he deposited the earnest money

as per the condition. The borrower (third respondent) preferred an

appeal before the Debts Recovery Tribunal, Lucknow, assailing the

auction notice. An interim order was passed, giving liberty to the bank

to proceed with the auction but to keep the confirmation of the sale in

abeyance and to await further orders of the D.R.T.. The auction was

held on 26.07.2013 but, the appellant was unaware of the interim

order passed by the D.R.T., as stated above. In the meantime, the

appellant had to deposit 25% of the bid amount. Later on, the D.R.T.

vacated the interim order due to non-prosecution but, the substantive

proceedings before the D.R.T. remained pending. The appellant was

informed for the first time by communication dated 18th October, 2013

and was asked to pay the balance amount as interim relief has been

rejected by the D.R.T. The appellant responded to the communication

made and submitted that he volunteers to pay the balance amount

provided that the matter pending with the D.R.T. is decided. Certain

communications were made between the appellant and the first

respondent. However, the first respondent later informed the appellant

vide communication dated 28th October, 2013 that if he fails to deposit

the balance amount of the auction bid, the first respondent may forfeit

the earnest money.

However, the Hon'ble Supreme Court further took note of the

fact that there was no material on record to substantiate that the first

respondent ever passed the order to forfeit the money deposited by

the appellant pursuant to the communication dated 28th October, 2013

for which a reference has been made. Without awaiting any further

action the first respondent initiated the re-auction proceedings

pursuant to notice dated 05.03.2014. When this fact came to the

notice of the appellant, he approached the High Court by filing a writ

application under Article 226 of the Constitution of India seeking

issuance of writ in the nature of mandamus to withhold the re-auction

proceedings which was initiated by the first respondent pursuant to

notice dated 05.03.2014 and further prayed directing the first

respondent to execute the sale deed in favour of the appellant on

deposit of the balance money of the auction bid or in the alternative,

refund the amount which the appellant had deposited pursuant to the

auction proceedings initiated in reference to notice dated 18th October,

2013.

An interim order was passed by the High Court and ultimately

on 21st July, 2015, the learned Single Judge of the High Court allowed

the application and directed the Bank to execute the sale deed in

favour of the petitioner. The order of the learned Single Judge was

challenged before the Division Bench of the same High Court, which

was disposed of on 10.03.2016 and was allowed on the ground that

the auction purchaser should seek appropriate remedy before the

competent forum, if advised.

The order of the Division Bench was assailed before the

Hon'ble Supreme Court. While considering the case of maintainability

of the writ application in view of the availability of alternative remedy,

the Hon'ble Supreme Court has observed, at paragraph 25 of the

judgment, that there is no dispute on the facts came on record. There

appears to be no reason for the appellant to be relegated to avail

other remedial mechanisms for recovery of the indisputed amount and

the Division Bench has committed a manifest error in the facts and

circumstances in not exercising its power under Article 226 of the

Constitution of India, and instead of resolving the dispute, the Division

Bench under the impugned judgment has kept the issue alive,

permitting the parties to have a second innings in reference to the

dispute which stands settled.

Thus, in case, as it is apparent from the tenor of the judgment

passed by the Hon'ble Supreme Court in the case of Mohd. Shariq

(supra) that in appropriate case where the facts are not in dispute, the

High Court should entertain a writ application under Article 226 of the

Constitution of India, even though there is an efficacious and

alternative remedy available to the petitioner. This is especially so

when the Court itself has not decided the matter at the threshold to

relegate the petitioner to the D.R.T.. Therefore, this Court comes to

the conclusion that this writ petition is maintainable in view of the

peculiar facts of this Case.

12. This view is also supported by a judgment passed by a Single

Bench of this Court in the case of U.K. Mechanical Engineering Pvt.

Ltd. Vs. the Zonal Manager, Corporation Bank, W.P.(C) No. 5561

of 2019 decided on 01.10.2020 wherein, the same question arose.

The fact remains that the Bank did not execute the sale deed,

which involves similar facts that the Bank was unable to execute a

sale deed in favour of the petitioner because the land belong to the

Scheduled Tribe person and there was a recommendation of the

internal committee of the Bank to refund the money. However, the

Bank was not refunding the money.

The learned Single Judge after taking into consideration the

facts of the case, came to the conclusion that the fact has not been

denied by the respondent-Bank in its counter affidavit, rather it has

been admitted that the possession of the said property could not be

handed over due to the order passed by the District Magistrate, East

Singhbhum, Jamshedpur denying approval for grant of possession of

the property as it comes under the purview of the Chota Nagpur

Tenancy Act, 1908. It has also been stated by the respondent-bank in

its counter affidavit that the sale committee of the respondent-Bank

had already decided to refund the sale consideration to the auction

purchaser and the said fact was duly informed to the petitioner,

however, in absence of availability of the bank account number of the

petitioner, the same could not be disbursed to it.

Having considered the rival contentions, the learned Single

Judge further held that the respondent-Bank is duty bound to refund

the amount which was received from the petitioner in lieu of auction

sale of the property in question pursuant to e-auction sale notice dated

10.05.2016 particularly keeping in view the possession of the said

property could not be handed over to the petitioner. In this case also,

the sale deed has not been executed in favour of the petitioner in spite

of the fact that he had deposited the bid amount and has been issued

with the sale certificate and in the meantime, 9 years have lapsed.

Though the reasons for non-execution of the sale deed in favour of the

petitioner is different than the reasons cited by the learned Single

Judge in the aforesaid case, we are of the opinion that principle of law

attracts to both the case with equal force.

13. The learned counsel for the respondent-Bank would very

emphatically argue that since the petitioner did not deposit the

requisite amount towards registration fee and other dues, the sale

deed has not been executed in his favour. However, as we have

stated earlier that there is no communication from the side of the

Bank, at least no copy of such communication has been annexed to

the counter affidavit that the petitioner has been asked to deposit

money towards the registration fee etc. and in that view of the matter,

this Court is of the opinion that not only the writ application is

maintainable, the Bank should refund the money of the petitioner

along with interest.

14. The question of awarding interest is also considered by the

learned Single Judge in the aforesaid case and relying upon the case

of State of Uttar Pradesh and others Vs. Jaswant Sugar Mills

Limited, and others (2014) 16 SCC 760 wherein, the Hon'ble

Supreme Court has held that it is not in dispute that in certain cases

payments have already been made. Though inevitable conclusion is

that the High Court is not justified in directing grant of interest on the

logic of various provisions contained in the Act, yet there is an element

of equity in favour of the land owners. It is, however, seen that the writ

applications were filed after long possession was taken. This factor

cannot be lost sight of while working out the equities and therefore,

the Hon'ble Supreme Court directed payment of interest @ 6 per cent.

15. Keeping in view the aforesaid analysis of the facts and the law

guiding the field, this Court is of the opinion that the writ application is

maintainable and therefore, it should be allowed.

16. Accordingly, the instant writ application stands allowed. A writ

of certiorari is issued quashing the sale certificate issued in favour of

the petitioner and writ of mandamus is issued directing the

Respondent-Bank to refund the money of Rs.6,60,000/- (Rupees Six

lacs, Sixty Thousand) along with interest at the rate of 6 per cent per

annum from the expiry of three months from the date of issuance of

the sale certificate dated 20.05.2014 till the date of actual payment.

The payment shall be made within a period of four months from the

date of receipt/production of a certified copy of this order. The Bank is

at liberty to put the property in question to re-auction.

17. Pending application, if any, stands disposed of.

18. There shall be no orders as to costs.

19. Grant urgent certified copy of this order as per the Rules.

(Sanjaya Kumar Mishra, C.J.)

(Ananda Sen, J.)

A.F.R.

APK/VK