Rajasthan High Court - Jodhpur

M/S. Dsb Motors Pvt. Ltd., And Anr vs Udaipur Urban Coop. Bank Ltd. And ... on 15 December, 2021

Bench: Pushpendra Singh Bhati

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 6772/2018

1. M/s Dsb Motors Pvt. Ltd., Jamar Kotra Link Road, Hiranmagri Sector No.6, Udaipur, Through- Its Managing Director, Shri Basant Kumar Bakaliya, Aged About 60 Years.

2. M/s Classic Automobiles Pvt. Ltd., Jamar Kotra Link Road, Hiranmagri Sector No. 6, Jawar Kotra Link Road, Udaipur. Through-Its Managing Director Shri Basant Kumar Bakaliya.

----Petitioners Versus

1. Udaipur Urban Co-Operative Bank Ltd. Regd., Office 9C-A, Madhuban, Udaipur, Through-Its Authorized Officer.

2. S.n.g. Enforcement, 184, Bhupalpura, Main Road, Udaipur.

3. Bhupesh Patel S/o Sh. Damodar Patel, Resident Of 1-Shiv Park, Durga Nursery Road, Udaipur.

4. Sarfraz Sheikh S/o Sh. Masood Ahmed Sheikh, Resident Of 25, Alkapuri, Udaipur.

5. Kuldeep Patel s/o Sh. Sh. Damodar Patel, r/o 1-Shiv Park, Durga Nursery Road, Udaipur.

----Respondents

For Petitioner(s) : Mr. Manoj Bhandari with Mr. Aniket Tater.

For Respondent(s) : Mr. Manish Shishodia, Mr. J.S. Saluja, Mr. Sanjay Nahar, Mr. Falgun Buch Mr. Lalit Parihar

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Order

15/12/2021

1. This writ petition has been preferred claiming the following

reliefs:

"1. The auction conducted on 16th & 17th April, 2018 in pursuance of auction notice dated 09.02.2018 (Annex.5) and further the illegal extension dated 17.03.2018 (Annex.6) (published in newspaper on

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18.03.2018) may kindly be declared illegal and may kindly be quashed and set aside.

2. The auction notice dated 09.02.2018 (Annex.5) may kindly be declared to be redundant and the General information dated 17.03.2018 (Annex.6) (published in newspaper dated 18.03.2018) regarding deferring the date of auction may kindly be declared illegal and may kindly be quashed & set-aside.

3. The documents regarding confirmation of sale, if any, Sale Certificates and registering of same, if any, may kindly be called from the respondents and may kindly be declared illegal and may kindly be quashed and set-aside.

4. The respondent no.1 may kindly be directed to proceed with the proposal given by the petitioner companies vide communication dated 08.05.2018 (Annex.14) and implement the same."

2. At the outset, this Court takes note of the fact that at the

instance of the petitioners, an earlier writ petition being S.B. Civil

Writ Petition No.788/2016 was disposed of by this Hon'ble Court

on 15.03.2018. The said order dated 15.03.2018 reads as under:

"The present writ petition comes up for orders on second stay application moved by the petitioner - firms.

Vide Order dated 06.07.2017, the liberty was granted to the petitioner - firms to deposit an amount of Rs. 8.30 crores with the respondent - bank for which, the petitioner - firms were granted time upto 31.07.2017. The said amount was not deposited as directed. Thereafter, the petitioner - firms and the respondent - bank agreed on an amount of Rs. 9.05 crores as per their Letter dated 22.01.2018, which was required to be deposited by the petitioner - firms by 25.01.2018. The said letter was received by the

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petitioner - firms on 24.01.2018. Since only one day time was given to deposit the heavy amount, the petitioner - firms could not do so. Accordingly, the present second stay application has been moved seeking extension of time to permit the petitioner - firms to deposit the said amount.

Learned counsel for the respondents, however, has no objection to the extension of time in case, the petitioner - firms pay enhanced amount of Rs. 9.50 crores as one time amount on or before 09.04.2018.

In view of the above, this Court deems it proper to dispose of the present writ petition with the following directions :-

A. The notice under Section 13(2) of the SARFAESI Act, 2002 dated 05.01.2016 shall stand quashed in case, the petitioner - firms deposit Rs. 9.50 crores with the respondent - bank on or before 09.04.2018. B. In case, the said amount is not deposited within stipulated period, the present writ petition shall deem to have been dismissed and the respondent - Bank shall be at liberty to proceed further against the petitioner - firms under the SARFAESI Act, 2002.

The present writ petition stands disposed of in the above terms. "

However, the petitioners failed to abide by the aforementioned

order of this Hon'ble Court and also failed to take the benefit of

the same.

3. Today the learned counsel for the petitioners raises three

issues:

Firstly, that the mandatory notice under the Securitisation And

Reconstruction Of Financial Assets And Enforcement Of Security

Interest Act, 2002 (SARFAESI Act) and the Rules made

thereunder require that no sale of immovable property shall take

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place before expiry of 30 days, and therefore, the auction could

not have place before 30 days from 09.04.2018;

Secondly, the auction has taken place, while prescribing the rates

below the DLC rates prevailing in the area; and

Thirdly, as an alternate remedy, the Hon'ble Supreme Court has

approved the exercise of powers under Article 226 of the

Constitution of India.

4. Learned counsel for the petitioners relied upon the precedent

law laid down by the Hon'ble Supreme Court in Mathew

Varghese Vs. M. Amritha Kumar & Ors., reported in (2014)

5 SCC 610, relevant portion of which reads as under:

"31. Once the said legal position is ascertained, the statutory prescription contained in Rules 8 and 9 have also got to be examined as the said Rules prescribe as to the procedure to be followed by a secured creditor while resorting to a sale after the issuance of the proceedings under Sections 13(1) to (4) of the SARFAESI Act. Under Rule 9(1), it is prescribed that no sale of an immovable property under the Rules should take place before the expiry of 30 days from the date on which the public notice of sale is published in the newspapers as referred to in the proviso to sub-

rule (6) of Rule 8 or notice of sale has been served to the borrower. Sub-rule (6) of Rule 8 again states that the authorised officer should serve to the borrower a notice of 30 days for the sale of the immovable secured assets. Reading sub-rule (6) of Rule 8 and sub-rule (1) of Rule 9 together, the service of individual notice to the borrower, specifying clear 30 days' time-gap for effecting any sale of immovable secured asset is a statutory mandate. It is also stipulated that no sale should be affected before the

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expiry of 30 days from the date on which the public notice of sale is published in the newspapers. Therefore, the requirement under Rule 8(6) and Rule 9(1) contemplates a clear 30 days' individual notice to the borrower and also a public notice by way of publication in the newspapers. In other words, while the publication in newspaper should provide for 30 days' clear notice, since Rule 9(1) also states that such notice of sale is to be in accordance with the proviso to sub-rule (6) of Rule 8, 30 days' clear notice to the borrower should also be ensured as stipulated under Rule 8(6) as well. Therefore, the use of the expression "or" in Rule 9(1) should be read as "and" as that alone would be in consonance with Section 13(8) of the SARFAESI Act.

32. The other prescriptions contained in the proviso to sub-rule (6) of Rule 8 relates to the details to be set out in the newspaper publication, one of which should be in "vernacular language" with sufficient circulation in the locality by setting out the terms of the sale. While setting out the terms of the sale, it should contain the description of the immovable property to be sold, the known encumbrances of the secured creditor, the secured debt for which the property is to be sold, the reserve price below which the sale cannot be effected, the time and place of public auction or the time after which sale by any other mode would be completed, the deposit of earnest money to be made and any other details which the authorised officer considers material for a purchaser to know in order to judge the nature and value of the property.

33. Such a detailed procedure while resorting to a sale of an immovable secured asset is prescribed under Rules 8 and 9(1). In our considered opinion, it has got a twin objective to be achieved:

33.1. In the first place, as already stated by us, by virtue of the stipulation contained in Section 13(8)

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read along with Rules 8(6) and 9(1), the owner/borrower should have clear notice of 30 days before the date and time when the sale or transfer of the secured asset would be made, as that alone would enable the owner/borrower to take all efforts to retain his or her ownership by tendering the dues of the secured creditor before that date and time. 33.2. Secondly, when such a secured asset of an immovable property is brought for sale, the intending purchasers should know the nature of the property, the extent of liability pertaining to the said property, any other encumbrances pertaining to the said property, the minimum price below which one cannot make a bid and the total liability of the borrower to the secured creditor. Since, the proviso to sub-rule (6) also mentions that any other material aspect should also be made known when effecting the publication, it would only mean that the intending purchaser should have entire details about the property brought for sale in order to rule out any possibility of the bidders later on to express ignorance about the factors connected with the asset in question.

33.3. Be that as it may, the paramount objective is to provide sufficient time and opportunity to the borrower to take all efforts to safeguard his right of ownership either by tendering the dues to the creditor before the date and time of the sale or transfer, or ensure that the secured asset derives the maximum price and no one is allowed to exploit the vulnerable situation in which the borrower is placed.

34. At this juncture, it will also be worthwhile to refer to Rules 8(1) to (3) and in particular sub-rule (3), in order to note the responsibility of the secured creditor vis-à-vis the secured asset taken possession of. Under sub-rule (1) of Rule 8, the prescribed manner in which the possession is to be taken by issuing the notice in the format in which such notice of possession is to be

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issued to the borrower is stipulated. Under sub-rule (2) of Rule 8 again, it is stated as to how the secured creditor should publish the notice of possession as prescribed under sub-rule (1) to be made in two leading newspapers, one of which should be in the vernacular language having sufficient circulation in the locality and also such publication should have been made seven days prior to the intention of taking possession. Sub-rule (3) of Rule 8 really casts much more onerous responsibility on the secured creditor once possession is actually taken by its authorised officer. Under sub-rule (3) of Rule 8, the property taken possession of by the secured creditor should be kept in its custody or in the custody of a person authorised or appointed by it and it is stipulated that such person holding possession should take as much care of the property in its custody as a owner of ordinary prudence would under similar circumstances take care of such property. The underlying purport of such a requirement is to ensure that under no circumstances, the rights of the owner till such right is transferred in the manner known to law is infringed. Merely because the provisions of the SARFAESI Act and the Rules enable the secured creditor to take possession of such an immovable property belonging to the owner and also empowers to deal with it by way of sale or transfer for the purpose of realising the secured debt of the borrower, it does not mean that such wide power can be exercised arbitrarily or whimsically to the utter disadvantage of the borrower.

35. Under sub-rule (4) of Rule 8, it is further stipulated that the authorised officer should take steps for preservation and protection of secured assets and insure them if necessary till they are sold or otherwise disposed of. Sub-rule (4), governs all secured assets, movable or immovable and a further responsibility is created on the authorised officer to

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take steps for the preservation and protection of secured assets and for that purpose can even insure such assets, until they are sold or otherwise disposed of. Therefore, a reading of Rules 8 and 9, in particular, sub-rules (1) to (4) and (6) of Rule 8 and sub-rule (1) of Rule 9 makes it clear that simply because a secured interest in a secured asset is created by the borrower in favour of the secured creditor, the said asset in the event of the same having become a non-performing asset cannot be dealt with in a light-hearted manner by way of sale or transfer or disposed of in a casual manner or by not adhering to the prescriptions contained under the SARFAESI Act and the abovesaid Rules mentioned by us."

5. Learned counsel for the petitioners also relied upon the

precedent law laid down by the Hon'ble Supreme Court in Ram

Kishun & Ors. Vs. State of U.P. & Ors., reported in (2012)

11 SCC 511, relevant portion of which reads under:

"17. Therefore, it becomes a legal obligation on the part of the authority that property be sold in such a manner that it may fetch the best price. Thus essential ingredients of such sale remain a correct valuation report and fixing the reserve price. In case proper valuation has not been made and the reserve price is fixed taking into consideration the inaccurate valuation report, the intending buyers may not come forward treating the property as not worth purchase by them, as a moneyed person or a big businessman may not like to involve himself in small sales/deals."

6. Learned counsel for the petitioners further relied upon the

precedent law laid down by the Hon'ble Supreme Court in

Haryana Financial Corporation & Ors. Vs. Jagdamba Oil

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Mills & Ors., reported in (2002) 3 SCC 496, relevant portion of

which reads as under:

"14. As was observed in Chairman and Managing Director, SIPCOT v. Contromix (P) Ltd. [(1995) 4 SCC 595 : JT (1995) 6 SC 283] in the matter of sale of public property, the dominant consideration is to secure the best price for the property to be sold. This can be achieved only when there is maximum public participation in the process of sale and everybody has an opportunity of making an offer. Public auction after adequate publicity ensures participation of every person who is interested in purchasing the property and generally secures the best price. But many times it may not be possible to secure the best price by public auction when the bidders join together so as to depress the bid or the nature of the property to be sold is such that suitable bid may not be received at a public auction. In that event, any other suitable mode for selling of property can be by inviting tenders. In order to ensure that such sale by calling tenders does not escape attention of an intending participant, it is essential that every endeavour should be made to give wide publicity so as to get the maximum price. These are aspects which the Corporations have to keep in view while dealing with disposal of seized units."

7. Learned counsel for the petitioners also relied upon the

precedent law laid down by the Hon'ble Supreme Court in Divya

Manufacturing Company (P) Ltd. & Ors. Vs. Union Bank of

India & Ors., reported in (2000) 6 SCC 69, relevant portion of

which reads as under:

"7. The Court noted that it cannot shut its eyes to the fact that initially the property was proposed to be sold

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at the price of Rs 37 lakhs. Thereafter the sale was confirmed at Rs 85 lakhs which was set aside and at the intervention of the Division Bench, the amount was enhanced to Rs 1.3 crores. The Court observed that as two applicants have come forward with a proposal to purchase the said property at Rs 2 crores, the principle laid down in LICA (P) Ltd. (1) v. Official Liquidator [(1996) 85 Comp Cas 788 (SC) [see below at p. 79]] and LICA (P) Ltd. (2) v. Official Liquidator [(1996) 85 Comp Cas 792 (SC) [see below at p. 82]] applies squarely to the facts of the present case. The Court also observed that it was conscious of the fact that there should be a finality even in a company sale, but so long as possession is not handed over to the purchaser and the sale deed is not executed, the Court by virtue of clause 11 of the terms and conditions for sale can reopen the sale in the interests of justice. The Court also referred to the decision in Navalkha and Sons v. Ramanya Das [(1969) 3 SCC 537] . Considering all the submissions made by the learned counsel for the parties, the sale confirmed in favour of the appellant for an amount of Rs 1.3 crores was set aside with a direction that Respondents 7 and 8 should compensate "Divya" by paying Rs 70 thousand each for the loss suffered by it and directed for resale of the assets of the Company. That order is under challenge before this Court.

13. From the aforesaid observation, it is abundantly clear that the court is the custodian of the interests of the company and its creditors. Hence, it is the duty of the court to see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. As stated above, in the present case, the sale proceedings have a chequered history. The appellant started its offer after having an agreement with the Employees' Samity for

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Rs 37 lakhs. This was on the face of it under bidding for taking undue advantage of court sale. At the intervention of the learned Single Judge, the bid was increased to Rs 85 lakhs. Subsequently, before the Division Bench, the appellant increased it to Rs 1.30 crores. At that stage, Respondent 7 "Sharma" was not permitted to bid because it had not complied with the requirements of the advertisement. It is to be stated that on 26-6-1998 the Division Bench has ordered that offers of Eastern Silk Industries Ltd. and Jay Prestressed Products Ltd. would only be considered on 2-7-1998 and confirmation of sale would be made on the basis of the offers made by the two parties. Further, despite the fact that the appellant "Divya" had withdrawn its earlier offer, the Court permitted it to take part in making further offer as noted in the order dated 2-7-1998. In this set of circumstances, there was no need to confine the bid between three offerors only."

8. Learned counsel for the petitioners further relied upon the

judgment rendered by the Hon'ble Madras High Court in K.

Raamaselvam & Ors. Vs. Indian Overseas Bank & Ors.,

reported in (2010) MLJ 313, relevant portion of which reads as

under:

"10. It is no doubt true, that any illegality in the auction can be raised in a proceeding under Section

17. We do not think that such a plea should be countenanced, in the present case, as the question now raised depends purely on a question of interpretation of the Statutory Rule. The existence of alternative remedy is not considered as an absolute bar for entertaining a Writ Petition. This is more so, in view of the fact that the Bank, a public sector undertaking and even considered as State under

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Article 12 of the Constitution of India, is expected to act strictly in accordance with the Statute and Rules.

11. The contention of the counsel for the Bank that a technical objection is being raised is also of little assistance. It is no doubt true that SARFAESI Act and Rules have been framed with a view to expedite the recovery of money due to the Bank. However, since the provisions have vested wide power, on the Authorised Officer/Secured Creditor, it is expected such power should be exercised within strict parameters indicated in the Statute and the Rules."

9. Learned counsel for the petitioners also relied upon the

precedent law laid down by the Hon'ble Supreme Court in

Navalkha & Sons Vs. Ramajuna Das & Ors., reported in

(1969) 3 SCC 537, relevant portion of which reads as under:

"6. The principles which should govern confirmation of sales are well-established. Where the acceptance of the offer by the Commissioners is subject to confirmation of the Court the offerer does not by mere acceptance get any vested right in the property so that he may demand automatic confirmation of his offer. The condition of confirmation by the Court operates as a safeguard against the property being sold at inadequate price whether or not it is a consequence of any irregularity or fraud in the conduct of the sale. In every case it is the duty of the Court to satisfy itself that having regard to the market value of the property the price offered is reasonable. Unless the Court is satisfied about the adequacy of the price the act of confirmation of the sale would not be a proper exercise of judicial discretion. In Gordhan Das Chuni Lal v. S. Sriman Kanthimathinatha Pillai [AIR 1921 Mad 286] it was observed that where the property is authorised to be

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sold by private contract or otherwise it is the duty of the Court to satisfy itself that the price fixed is the best that could be expected to be offered. That is because the Court is the custodian of the interests of the Company and its creditors and the sanction of the Court required under the Companies Act has to be exercised with judicial discretion regard being had to the interests of the Company and its creditors as well. This principle was followed in Rathnaswami Pillai v. Sadapathi Pillai [(1925) Mad 318] and S. Soundarajan v. Roshan & Co. [AIR 1940 Mad 42] In A. Subbaraya Mudaliar v. K. Sundarajan [AIR 1951 Mad 986] it was pointed out that the condition of confirmation by the Court being a safeguard against the property being said at an inadequate price, it will be not only proper but necessary that the Court in exercising the discretion which it undoubtedly has of accepting or refusing the highest bid at the auction held in pursuance of its orders, should see that the price fetched at the auction is an adequate price even though there is no suggestion of irregularity or fraud. It is well to bear in mind the other principle which is equally well-settled namely that once the Court comes to the conclusion that the price offered is adequate, no subsequent higher offer can constitute a valid ground for refusing confirmation of the sale or offer already received. (See the decision of the Madras High Court in Roshan & Co. case)."

10. Learned counsel for the petitioners further relied upon the

precedent law laid down by the Hon'ble Supreme Court in Anil

Kumar Srivastava Vs. State of U.P. & Ors., reported in

(2004) 8 SCC 671, relevant portion of which reads as under:

"12. The aforestated ruling explains the meaning of the term "reserve price". It indicates the object

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behind fixing the reserve price viz. to limit the authority of the auctioneer. In the present case, the Board resolution is meant to guide the officers of the second respondent. The resolution prescribes the guidelines for fixing the reserve price. The concept of reserve price is not synonymous with "valuation of the property". These two terms operate in different spheres. An invitation to tender is not an offer. It is an attempt to ascertain whether an offer can be obtained with a margin. [See Pollock & Mulla: Indian Contract & Specific Relief Acts (2001), 12th Edn., p.

50.]"

11. Learned counsel for the petitioners further relied upon the

judgment rendered by Hon'ble Kerala High Court at Ernakulam in

K.T. Unnikrishnan Vs. The Authorised Officer, U.C.O. Bank &

Ors., reported in 2018(1) KLJ 796, relevant portion of which

reads as under:

9. In so far as respondents 7 to 11 are not amenable for an agreed order, the sustainability of the sale held in their favour under the Act needs to be considered on merits. It is beyond dispute that very wide powers have been conferred on banks and financial institutions under the Act to realise the amounts due to them. The said powers include the power to take over possession of securities with a right to transfer it by sale as well. As held consistently by the Apex court, every wide power, the exercise of which has far-reaching repercussion, has inherent limitation on it also.

Such powers can be exercised only to effectuate the purposes of the statutes concerned. The responsibility is far graver in legislations enacted for general benefit and common good. Test of reasonableness is also strict in such cases. The exercise of such powers have to be tested on the

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touchstone of fairness and justice. That which is not fair and just is unreasonable and what is unreasonable is arbitrary. Power to take possession of a property of the defaulter and transfer the same by sale requires the authority to act cautiously, honestly, fairly and reasonably. Lack of reasonableness or even fairness at either of the two stages renders the take over and transfer invalid. The authority should justify the action assailed on the touchstone of justness, fairness, reasonableness and as a reasonable prudent owner. Right to property is a constitutional right protected under Article 300A of the Constitution, which mandates that no person shall be deprived of his property save by authority of law. When the provisions of the Act and the Rules made thereunder are analysed and understood in the background of article 300A of the Constitution, it is clear that when it comes to the question of realising the dues of the secured creditors by bringing the property entrusted with them for sale to realise money advanced without approaching any court or tribunal, the secured creditor is a trustee and he cannot deal with the property in any manner it likes. The secured creditor, in the circumstances, is duty bound to ensure that maximum price is received from the secured asset and that no one is taking advantage of the vulnerable possession in which the borrower is placed on account of the proceedings against him. In other words, the secured creditor is bound to ensure that the rights of the owner of the security is not infringed in any manner. Merely because a secured interest in a secured asset is created by the borrower in favour of the secured creditor, the said asset cannot be disposed of in a casual or light-hearted manner (See Mathew Varghese v. M.

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Amritha Kumar [(2014) 5 SCC 610]). It is relevant in this context to refer to the following observations made by the Apex court in Ram Kishun v. State of U.P. [(2012) 11 SCC 511]:

"Undoubtedly, public money should be recovered and recovery should be made expeditiously. But it does not mean that the financial institutions which are concerned only with the recovery of their loans, may be permitted to behave like property dealers and be permitted further to dispose of the secured assets in any unreasonable or arbitrary manner in flagrant violation of the statutory provisions"

10. The above principles make it clear that though the recovery of public dues should be made expeditiously, it should be in accordance with the procedure prescribed by law and that it should not frustrate a constitutional right as well as the human right of a person to hold a property and that in the event of a fundamental procedural error occurred in a sale, the same is liable to be set aside.

11. The case set up by the petitioner has to be considered in the light of the aforesaid principles. As noted above, the property of the petitioner has been sold by the bank for Rs. 85,60,000/-. It is stated by the petitioner in ground C of the writ petition that the said property is worth more than Rs. 3 crores. To substantiate this case, the petitioner produced Ext.P5 sale deed executed on 2.11.2017, the day previous to the date of sale, in respect of a property situated in the very same survey number, measuring 4 cents. The value of the property shown in the said sale deed is Rs. 40,00,000/-. If the price of the property shown in

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Ext.P5 sale deed is taken as the true price of the property transacted between the parties to the said document, the value of the property of the petitioner which was sold in terms of Ext.P1 sale notice on the next day would be Rs. 1,28,33,000/-. In so far as a considerably high percentage of the value of the property is to be paid towards stamp duty and registration charges, it is common knowledge that there is a tendency among the people in our State to show a lesser price in the sale deeds to save stamp duty and registration fees in connection with the execution and registration of documents. If that reality is taken into account, it can be easily inferred that the price of the property transacted between the parties to Ext.P5 sale deed would be far more than what is stated therein. Further, as noted above, in terms of Ext.P6 agreement, a third party has come forward to purchase the property of the petitioner for almost twice the price at which the property was sold by the bank. It is stated by the petitioner that it is that third party who has made available the demand drafts of the amounts payable to the bank, to the petitioner to present the same before the Court. The said circumstances alone are sufficient to hold that the price of the property of the petitioner is far more than the amount at which the same was sold by the bank. Further, having regard to the facts and circumstances of this case and the practices prevailing in the State in transactions of this nature as also the vulnerable position in which the petitioner is placed, and the risk involved for a third party to enter into a transaction in the nature of Ext.P6 agreement, I am of the view that the price of the property agreed between the petitioner and the third party referred to in Ext.P6 agreement would be far more

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than the price shown in the agreement. True, in the absence of any formula to arrive at the correct market price of a property for the purpose of showing the same as the minimum sale price in a sale notice, the banks and financial institutions may commit errors while arriving at the minimum sale price of the properties to be sold, but such errors shall not go to the extent it has gone in the instant case. Even if the price shown in Ext.P6 agreement is taken as the true price of the property, I have no hesitation to hold that the bank has acted in an unfair and unreasonable manner in arriving at the minimum price of the property for its sale. Needless to say that the entire proceedings for sale of the property of the petitioner is thus vitiated. I hold so also for the reason that the counter affidavit filed by respondents 7 to 11 indicates that the very same bank through the very same branch has extended personal loans to the buyers to purchase the property, making the whole transaction suspicious.

12. On the other hand, learned counsel for the respondents,

while opposing the petition, relied upon the precedent law laid

down by the Hon'ble Supreme Court in Kanaiyalal Lalchand

Sachdev & Ors. Vs. State of Maharashtra & Ors., reported in

(2011) 2 SCC 782, relevant portion of which reads as under:

"21. In Indian Overseas Bank v. Ashok Saw

Mill [(2009) 8 SCC 366] the main question which

fell for determination was whether the DRT would

have jurisdiction to consider and adjudicate post

Section 13(4) events or whether its scope in terms

of Section 17 of the Act will be confined to the

stage contemplated under Section 13(4) of the

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Act? On an examination of the provisions

contained in Chapter III of the Act, in particular

Sections 13 and 17, this Court held as under: (SCC

pp. 375-76, paras 35-36 & 39) "35. In order to prevent misuse of such wide powers and to prevent prejudice being caused to a borrower on account of an error on the part of the banks or financial institutions, certain checks and balances have been introduced in Section 17 which allow any person, including the borrower, aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in sub-section (3) thereof.

36. The intention of the legislature is, therefore, clear that while the banks and financial institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee.

***

39. We are unable to agree with or accept the submissions made on behalf of the appellants that the DRT had no jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated under Section 13(4) of the Act. On the other hand, the law is otherwise and it contemplates that the action taken by a secured creditor in terms of Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT."

(emphasis supplied by us)"

13. Learned counsel for the respondents also relied upon the

judgment rendered by the Hon'ble Bombay High Court in Radhika

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Rajesh Agarwal Vs. Union of India & Ors. (Writ Petition (L)

No.3880 of 2020, decided on 05.11.2020), relevant portion of

which reads as under:

"3. This writ petition has been filed under Article 226 of the Constitution of India by the petitioner seeking to challenge sale of two flats i. e. flat Nos. 801 and 802 situated in Shivtapi Building along with two car parking spaces on the third podium level at Gamdevi, Mumbai (hereinafter referred to as 'the two flats') in favour of respondent Nos. 3 and 4 being declared as the highest/successful bidder in the e-auction conducted by respondent No. 2 Bank. Petitioner is the second highest bidder.

4. Petitioner has challenged the bidding process as being compromised by respondent No. 2 Bank in collusion and connivance with respondent Nos. 3 and 4 resultantly denying the petitioner an opportunity to better the highest bid and has invoked the extra ordinary jurisdiction of this Hon'ble Court.

13. In the case of United Bank of India v. Satyavati Tondon (supra), the Apex Court had the occasion to examine in detail the provisions of the SARFAESI Act and the question regarding invocation of the extraordinary jurisdiction under Articles 226/227 in challenging the actions taken under the SARFAESI Act. While delivering a note of caution with respect to writ filed to challenge the actions taken under the SARFAESI Act, their Lordships made the following pertinent observations, which in our view squarely apply to the present case : (SCC p. 143, paragraphs 42-45).

"42. There is another reason why the impugned order should be set aside. If respondent 1 had any tangible grievance against the notice issued under

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section 13(4) or action taken under section 14, then she could have availed remedy by filing an application under section 17(1). The expression "any person" used in section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under section 13(4) or section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.

43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.

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44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.

45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance."

14. The law is therefore well settled that where any person is aggrieved by any notice or action pursuant thereto under the provisions of SARFAESI Act, the only remedy available to such person would be to approach the DRT by filing an appropriate application under the provisions of the Act.

15. In the light of the foregoing discussion, we are of the considered opinion that on account of availability of alternative statutory remedy of filing an application under section 17(1) of the SARFAESI Act before the DRT Mumbai being available to the petitioner to challenge the action of respondent No. 2 Bank in confirming the sale of the two flats in favour

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of respondent Nos. 3 and 4, we do not think fit to interfere with the petitioner's case in writ jurisdiction."

14. After hearing learned counsel for the parties as well as

perusing the record of the case, alongwith the precedent laws

cited at the Bar, this Court finds that on merits, the petitioners

cannot be permitted to submit anything particularly, when they

themselves have violated the aforequoted order dated 15.03.2018

passed by this Hon'ble Court, and thus, the petitioners do not

deserve any kind of indulgence by this Court under Article 226 of

the Constitution of India.

15. Furthermore, on account of availability of the alternative

remedy before the Debt Recovery Tribunal as well as after