Shree Balaji Malls And ... vs Bank Of Maharsthra
2021 Latest Caselaw 2992 MP

                                 1

        THE HIGH COURT OF MADHYA PRADESH
                   WP-10300-2021
  (SHREE BALAJI MALLS AND INFRASTRUCTURE (INDIA) PVT LTD VS
                   BANK OF MAHARASHTRA )



JABALPUR
 DATED : 06.07.2021
       Heard through Video Conferencing.
       Shri Shreyas Dharmadhikari, learned counsel for the
petitioner.
       Shri Abhijeet C. Thakur, learned counsel for the
respondent.

Heard on the preliminary objection raised by the respondent.

The first preliminary objection of the respondent is that the writ petition is not maintainable because it has been filed by a person who is not authorized by the Directors of the Company to file the present petition.

Having examined the record, it is noticed that in support of the writ petition the affidavit of Dheeraj Sharma S/o Shri M.L. Sharma has been filed and he has been shown as authorized representative of the company. The petitioner has subsequently placed on record the resolution of the Board of Directors of the petitioner-company dated 08.06.2021 as Annexure P/8 by which the said Dheeraj Sharma has been authorized to file the petition. In view of this, this preliminary objection is overruled.

The next objection raised by the counsel for the respondent is that the petitioner has alternative remedy of filing an appeal under Section 17 of the Securitization Act and in support of his submission, he has placed reliance upon the judgment of the Supreme Court in the matter of Agarwal Tracom Private Limited Vs. Punjab National Bank and others, (2018) 1 SCC

626.

As against this, the submission of learned counsel for the petitioner is that the alternative remedy is not a bar in entertaining the writ petition and that the petitioner is only seeking extension of time to deposit the balance amount and considering the Covid-19 situation in other petitions the relief has been granted.

Having heard the learned counsel for the parties and on the perusal of the record, it is noticed that the petitioner is the auction-purchaser of the property in question and the auction was held in pursuance to the provisions contained in the Securitization Act. The bid of the petitioner was for Rs.3,80,20,000/-. The petitioner had deposited 25% of the said amount on 17.03.2021 and was requited to deposit the balance 25% amount within the period as agreed between the parties but not exceeding three months in terms of Rule 9 (4) of the SARFAESI Rules, 2002. As per the respondent, 90 days' period in terms of Rule 9(4) of the SARFAESI Rules which is the maximum permissible time expired on 15.06.2021. As per the reply of the respondent, thereafter the amount of 25% deposited by the petitioner has been forfeited in terms of Rule 9(5) of the SARFAESI Rules, 2002.

The Supreme Court in the matter of Agarwal Tracom Private Limited (supra) has held that the action under Rule 9(5) in forfeiting the deposit made by the auction-purchaser is a part of the measures taken by the secured creditor under Section 13 (4) of the Act, hence remedy of appeal under Section 17 is available against such an action. In this regard, it has been held that :

"26. Reading of the aforementioned sections and the rules and, in particular, Section 17(2) and Rule 9(5) would clearly go to show that an action of secured creditor

in forfeiting the deposit made by the auction purchaser is a part of the measures taken by the secured creditor under Section 13(4).

27. The reason is 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 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 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 Tribunal has been empowered by Section 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?

28. We also notice that Rule 9(5) confers express power on the secured creditor to forfeit the deposit made by the auction- purchaser in case the auction-purchaser commits any default in paying installment of sale money to the secured creditor. Such action taken by the secured creditor is, in our opinion, a part of the measures specified in Section 13(4) and, therefore, it is regarded as a measure taken under Section 13(4) read with Rule 9(5). In our view, the measures taken under Section 13(4) commence with any of the action taken in clauses (a) to (d) and end with measures specified in Rule 9.

It has further been held that :

"33. In the light of foregoing discussion, we are of the considered opinion that the writ court as also the appellate court were justified in dismissing the appellant's writ petition on the ground of availability of alternative statutory remedy of filing an application under Section 17(1) of the SARFAESI Act before the Tribunal concerned to challenge the action of the PNB in forfeiting the appellant's deposit under Rule 9(5). We find no ground to interfere with the impugned judgment of the High Court.

34. The appellant is, accordingly, granted liberty to file an application before the Tribunal concerned (DRT) under Section 17(1) of the SARFAESI Act, which has jurisdiction to entertain such application within 45 days from the date of this order. In case, if the appellant files any such application, the Tribunal shall decide the same on its merits in accordance with law uninfluenced by any of the observations made by this Court and the High Court in the impugned judgment."

From the aforesaid judgment of the Hon'ble Supreme Court, it is clear that the auction-purchaser is required to avail the remedy of appeal under Section 17 of the Act against the measures taken under Section 13(4) of the Act which includes the action under Rule 9(5).

Counsel for the petitioner has placed reliance upon the order of this Court dated 21.09.2020 passed in W.P. No.9119/2020 in the case of Abdul Hameed and another Vs. State Bank of India and another but in that case the only issue was in respect of extension of time to deposit balance amount but the issue of action under Rule 9(5) was not involved whereas in

the present case action under Rule 9(5) has already been taken. Same was the position in respect of the order dated 01.03.2021 passed in W.P. No.4424/2021 and order dated 11.01.2021 passed in W.P. No.14144/2020. Hence, those orders stand on different footing.

The reply filed by the respondent also reveals that the DRT, Jabalpur is functioning as the charge of the DRT, Jabalpur is with the Presiding Officer, Lucknow and the matters are being heard through VC on moving necessary application before the DRT, Jabalpur.

Having regard to the aforesaid, we are of the opinion that since an alternative efficacious remedy of appeal is available to the petitioner, therefore, no case is made out to entertain the writ petition directly at this stage.

The writ petition is accordingly dismissed, however, with liberty to the petitioner to avail the remedy of appeal.

                      (PRAKASH SHRIVASTAVA)                       (VIRENDER SINGH)
                          JUDGE                                        JUDGE
DV


Digitally signed by
DINESH VERMA
Date: 2021.07.13
16:31:19 +05'30'