Revachand Takhtani vs Bank Of Baroda And Others

Sushrut Arvind Dharmadhikari, J

This petition under Article 226 of the Constitution of India has been filed

by the petitioner/auction purchaser against the sale notice dated 19.04.2024 (Annexure P/1) and auction dated 12.07.2023 (auction notice dated 26.06.2023) (Annexure P/2). The petitioner has prayed for the following reliefs:

(a) Direct the respondent No.1 to either clarify on the count of clear title of the subject property or return the auction money deposited by the petitioner, or alternatively,

(b) Direct the respondent bank to maintain status quo till the Securitization Application to be filed by the petitioner/auction purchaser is disposed of.

(c) Direct the Debt Recovery Tribunal not to treat the Securitization application barred by limitation.

(d) Any other relief(s), which this Court may deem fit to be granted to the petitioners under the facts and circumstances of the present case.

The brief facts of the case are that initially respondent No.3 (borrower) availed credit facility from the respondent No.1/bank by way of mortgage of the commercial property situated at Plot No. B-120, IDA Scheme No. 78, Part-I (New Loha Mandi), Indore MP admeasuring an area of 1870.44 sq. ft. Due to default in repayment, the account of the borrower was declared as NPA. Thereafter, respondent No.1/bank published the auction notice dated 26.06.2023 for the subject property. Petitioner was declared as the successful bidder of the auction proceedings. As per the conditions of the auction, petitioner deposited a total of Rs. 50,00,000/- for completing the said sale. On 06.11.2023, petitioner submitted an application for mutation before the Indore Development Authority/respondent No.2. In response, IDA/respondent No.2 vide letter dated 23.11.2023 informed that the lease was issued in the name of respondent No.3 and a condition was imposed on the original lease to vacate the old business premises and to shift his business to the newly allotted land. Since, the lease condition was not fulfilled, therefore, no permission for sale or transfer of the lease has been granted by the IDA/respondent No.2. Subsequently, petitioner sent a notice to the bank to prove the legal sanctity of the subject property to which the respondent/bank did not reply. Thereafter, the petitioner wrote to the bank demanding the amount deposited by him towards bid as the auction sale could not be honored without the permission of the IDA. However, instead of remitting the said dues, the respondent No.1/bank denied all the averments and alleged that since the petitioner has disobeyed the conditions of the auction, therefore his remittance shall be forfeited. Inspite of various communications by the petitioner, the respondent No.1/bank proceeded to publish second auction notice dated 19.04.2024. Hence, this petition.

Learned counsel for the petitioner contended that the petitioner is a bonafide auction purchaser having complied with the terms and condition of the auction. The respondent No.1/bank has not complied with the mandate of Rule 8(6) of the Rules, 2002 by way of non-disclosure of all factors substantial for the prospective bidder with regard to the subject property. Therefore, the action of the respondent No.1 is illegal reflecting absence of fair play and transparency as envisaged under Article 14 of the Constitution of India. Hence, it is prayed that the petition be allowed.

Heard learned counsel for the appellant.

The fact remains that the maintainability of the writ petition in as much as filing of writ petition by the auction purchaser is an abuse of process of the Court. The petitioner ought to have approached the Debt Recovery Tribunal (DRT) by way of filing an appeal under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act hereinafter) but the petitioner has preferred to file the present petition. In case of Phoenix ARC Private Limited Vs. Vishwa Bharati Vidya Mandir and Ors. (Civil Appeal Nos.257-259/2022) reported in (2022) SCC online SC 44, the Apex Court has held that the High Court ought not have to entertain the writ petition and issue direction to maintain status-quo. The High Court should be extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserves to be set aside. In case of Radha Kishnan Industries Vs. State of Himachal Pradesh in (Civil Appeal No. 1155/2021) reported in (2021) 6 SCC 771, the Apex Court has held that where an efficacious alternative remedy is available to the aggrieved person, the High Court has discretion not to entertain a writ/miscellaneous petition.

Recently, the Apex Court in case of M/S South Indian Bank Ltd. & Ors. Vs. Naveen Mathew Philip and Anr. Etc. [2023 Livelaw (SC) 320] has deprecated the practice adopted by the High Courts whereby the writ petitions are being entertained in Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act hereinafter) matters, especially against the private banks when the statute prescribes a particular mode, an attempt to circumvent shall not be encouraged by the writ Court. The litigant cannot avoid the non-compliance of approaching the Tribunal which requires the prescription of fee and use of constitutional remedy as an alternative.

The Apex Court in the case of M/S South Indian Bank Ltd. (supra) further went on to hold that “we deprecate such practice of entertaining the writ petitions by the High Court in exercise of power under Section 226 of the Constitution of India without exhausting the alternative remedy available under the law.”

In view of the aforesaid and also looking to the fact that the petitioner without exhausting the alternative efficacious remedy as available to him as per the SARFAESI Act has approached this Court, therefore, we do not find it proper to entertain this petition. However, the petitioner would be at liberty to avail remedy in accordance with law, if so advised.

Accordingly, the writ petition is hereby dismissed. No order as to costs.