HC: Won't allow pushing of personal agenda in the name of PIL, Rs.1 Lakh Cost imposed, Read Order

The Delhi High Court has imposed a considerable cost of ₹1 lakh on a litigant for filing a frivolous PIL with tainted objective to obstruct the sale of a property that was mortgaged by the borrowers with a financial institution to secure their loan.

The Division Bench of Acting Chief Justice Vipin Sanghi and Justice Navin Chawla observed that the petition is nothing but a motivated exercise undertaken by the petitioner at the behest of the borrowers after they have failed to obstruct the sale of the property.

The Petitioner herein had sought action against respondent- financial institutions for allegedly sourcing huge amount of money to the illegal group of companies as financial favour.

The Court however, during the course of hearing, opined that the petition gives the impression that the petitioner, in public interest, is challenging the manner in which the loans were disbursed to the borrowers and seeks investigation of the said transactions as the Counsel has questioned the manner in which the mortgaged asset was sold under the SARFAESI Act by the Financial Institution.

The Court thus stated that it fail to appreciate as to how the petitioner can raise any grievance in relation to the said sale transaction, which has been undertaken through a public sale.

"The petitioner’s submission that the property was sold at a price lower than the market price, cannot be accepted since the sale was a public sale through a public auction. In any event, that is a matter which does not concern the petitioner, and the borrowers have already challenged and lost the said challenge. Moreover, we are informed that the sale has already been confirmed."

When the Court was informed that in relation to the outstanding loan amount, the petitioner has already filed its claim before the NCLT, since the borrower company is facing insolvency proceedings, it noted that the petition is ill-motivated and perverse.

"In our view, this petition is nothing but a motivated exercise undertaken by the petitioner at the behest of the borrowers after they have failed to obstruct the sale of the property. It appears that the petitioner has now been set up by them. Though the prayers made in the writ petition seek to assail the loan transaction by which loans were advanced to the said borrowers, the submissions of the petitioner relate to the manner in which the Financial Institution has sought to make recovery of a part of the loaned amount by publicly auctioning the asset of the borrowers which was mortgaged to secure the loan."

Read Order Here:

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