Raj Purohit Sogaram And Another vs The Indian Overseas Bank And 2 ...
2022 Latest Caselaw 6074 Tel

             HON'BLE SRI JUSTICE P.NAVEEN RAO
                                AND
           HON'BLE SRI JUSTICE J.SREENIVAS RAO


              WRIT PETITION NO.40649 OF 2022


                        Date:22.11.2022

Between:

Raj Purohit Sogaram S/o.Ashaji Raj Purohit,
Aged 42 yrs, R/o.H.No.8-11-75, J.P.N.Road,
Warangal Chowrastha,
Warangal, Telangana 506 002 & another
                                              .....Petitioners
     And

The Indian Overseas Bank,
Chief Manager and Authorised Officer,
Hanamkonda Branch,
H.No.2-5-74, Nakkalagutta, Hanamkonda,
Warangal & others
                                              .....Respondents

The Court made the following:

HON'BLE SRI JUSTICE P.NAVEEN RAO

AND

HON'BLE SRI JUSTICE J.SREENIVAS RAO

WRIT PETITION NO.40649 OF 2022

ORDER : (Per Hon'ble Sri Justice P.Naveen Rao)

Heard Sri A. Venkatesh, learned counsel for the petitioners.

2. Petitioners are the auction purchasers of the secured asset.

Petitioners paid 25% of the sale amount. On the ground that in the

meanwhile litigation ensued on the same property, the balance sale

consideration was not paid by the petitioners. By the proceedings

impugned herein, petitioners were informed that e-auction is

deemed to have been cancelled since they did not pay the balance

sale consideration. Challenging the same, this writ petition is filed.

3. Against any measures/decisions taken by the secured

creditor under the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 (for short 'the

SARFAESI Act'), petitioners have an effective and efficacious remedy

under Section 17 of the SARFAESI Act. Section 17 of the SARFAESI

Act provides remedy in the form of securitization application before

the Debts Recovery Tribunal.

4. This very issue has come up for consideration before the

Hon'ble Supreme Court in Agarwal Tracom Private Limited Vs

Punjab National Bank and others1. The Hon'ble Supreme Court

considered the scope of provision in Section 17 of the SARFAESI Act

and Rule 9 of the Security Interest (Enforcement) Rules, 2002. The

Hon'ble Supreme Court, following the earlier decisions held as

under:

"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).

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 instalment 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.

33. In the light of the 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 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."

5. In view of the same, petitioners have to avail the remedy

provided under Section 17 of the SARFAESI Act. Since petitioners

have an effective and efficacious remedy, we are not inclined to

entertain the writ petition.

1 (2018) 1 Supreme Court Cases 626

6. The Writ Petition is accordingly dismissed granting liberty to

the petitioners to avail the remedy provided under Section 17 of the

SARFAESI Act. If petitioners avail the remedy under Section 17 of

the SARFAESI Act within two weeks from today, the Debts Recovery

Tribunal may consider to condone the delay in filing the

securitization application objectively.

Pending miscellaneous petitions, if any, shall stand closed.

__________________ P.NAVEEN RAO,J

_______________________ J.SREENIVAS RAO, J 22nd November, 2022

Note :

Issue c.c. in two (2) days B/o.

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