Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(SC) 1007

SUPREME COURT OF INDIA
ANIRUDDHA BOSE, BELA M. TRIVEDI, JJ.
Union Bank Of India – Appellant
Versus
Rajat Infrastructure Pvt. Ltd. & Ors. – Respondents
And
M/s. Sunview Assets Pvt. Ltd. - Applicant(Respondent No.6)
Miscellaneous Application No.1735 of 2022 In Civil Appeal No.1902 of 2020
Decided on : 04-10-2023

Advocates appeared:
For the Petitioner(s): Mr. O. P. Gaggar, AOR
For the Respondent(s): Mr. Rishi Sehgal, Adv. Mr. Nikhil Jain, AOR Mr. Keshavam Chaudhri, Adv. Ms. Arveen Sekhon, Adv. Ms. Hargun Sandhu, Adv. Ms. Nikita Gill, Adv. Ms. Divya Jain, Adv. Ms. Monika Dhingra, Adv. Ms. Mrinmayee Sahu, AOR Mr. Birendra Kumar Mishra, AOR Mr. Samman Vardhan, Adv. Ms. Poonam Atey, Adv. Mr. Hemendra, Adv. Mr. Sirajuddin, Adv. Mr. Dushyant A. Dave, Sr. Adv. Mr. Jaideep Gupta, Sr. Adv. Mr. Aditya Kr. Choudhary, Adv. Mr. Gurmehar Vaan Singh, Adv. Mr. Sandeep Pandey, Adv. Mr. Rajesh Singh Chauhan, AOR Mr. Siddhartha Sinha , AOR Mr. Tushar Singh, AOR

IMPORTANT POINTS
(1) When a statute requires a particular thing to be done in a particular manner, it must be done in that manner or not at all and other methods of performance are necessarily forbidden.
(2) Power to do complete justice – Court in exercise of powers under Article 142 cannot ignore any substantive statutory provision dealing with the subject.

Headnote:
(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Section 13 – Security Interest (Enforcement) Rules, 2002 – Rule 9 – Civil Procedure Code, 1908 – Section 148 – Auction sale of secured asset – Requirement of pre-deposit – When a statute requires a particular thing to be done in a particular manner, it must be done in that manner or not at all and other methods of performance are necessarily forbidden – Applicant was required to deposit balance amount with authorized officer of bank on or before fifteenth day of confirmation of sale of subject property – Applicant did not deposit balance sale amount as required – Even Section 148 of CPC does not permit court to extend time limit beyond thirty days of time limit fixed by court earlier – Application dismissed. (Paras 8, 9, 17, 19 and 20)
(B) Constitution of India – Article 142 – Power to do complete justice – Court in exercise of powers under Article 142 cannot ignore any substantive statutory provision dealing with the subject – Plenary powers of Supreme Court under Article 142 are inherent in nature and are complementary to those powers which are specifically conferred on court by various statutes – These powers though are of a very wide amplitude to do complete justice between parties, cannot be used to supplant substantive law applicable to case or to cause under consideration of court – Article 142 even with width of its amplitude cannot be used to build a new edifice where none existed earlier, by ignoring express statutory provisions dealing with a subject and thereby to achieve something indirectly which cannot be achieved directly. (Para 17)
Facts of the case:
Respondent No.4 & 5 having failed to repay the credit facilities/ loan granted by appellant bank, proceedings under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 were initiated by the Appellant Bank in respect of the Subject Property mortgaged with it.
Findings of Court:
It would be open to the applicant to take recourse to any other remedy that may be permissible under the law for the prayers sought in present application, or to file appropriate proceedings seeking refund of the amount deposited with the appellant-bank, as may be permissible under law.
Result : Miscellaneous Application dismissed.

JUDGMENT :

BELA M. TRIVEDI, J.

1. M.A. No.1735 of 2022 is filed in the Civil Appeal No.1902 of 2020 (arising out of Special Leave Petition (Civil) No.28608 of 2019), by the Applicant (original Respondent No.6-M/s. Sunview Assets Pvt. Ltd.) seeking directions to Union Bank of India (original Appellant) to issue Sale letter in favour of the Applicant in respect of the property bearing House No.7, Survey No. Old 168 and 169 (New No.306 & 307) of Village Palasiayana, Manormagank, Tehsil and District Indore admeasuring 109754 Sq. Ft. (2.18 Acres) (hereinafter referred to as the ‘Subject Property’) on the ground that the Applicant/ Auction Purchaser has made the full and final payment of the auction amount alongwith interest in terms of the order dated 12.05.2020 passed by this Court in M.A. No.922 of 2020.

2. The chequered history of the long-drawn litigation between the parties may be summarized as under: -

(i) The appellant in the Civil Appeal No.1902 of 2020 is a bank, a body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The Respondent No.1-Rajat Infrastructure Pvt. Ltd. claimed to be the owner of the Subject Property, the Respondent No.2-Manindra Chandrasen and Respondent No.3-Sharad Chandrasen claimed to be in the possession of the subject property, Respondent No.4- Zoom Developers Pvt. Ltd. and Respondent No.5-Zoom Vallabh Steel Ltd. were the borrowers. In order to secure the credit facilities/ loan granted by the Appellant Bank to the Respondent No.4 and 5, the Respondent No.1 on 15.04.2005 had mortgaged its interest in the subject property to the Appellant Bank.

(ii) The Respondent No.4 & 5 having failed to repay the credit facilities/ loan granted by the appellant bank, the proceedings under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act’) were initiated by the Appellant Bankin respect of the Subject Property mortgaged with it.

(iii) After certain proceedings before the Debt Recovery Tribunal (DRT) and Bombay High Court having taken place between the parties, the Appellant on 13.06.2019 had issued a notice for e-auction sale of the said property under the SARFAESI Act, scheduling the auction sale on 04.07.2019.

(iv) The Respondent no.1-Rajat Infrastructure preferred a Securitization Application No. 115 of 2019 on 30.06.2019, before the DRT for restraining the Appellant Bank from taking any further steps including the sale and confirmation of sale in respect of the Subject Property, on the ground that the Bank-the secured creditor had failed to make proper valuation of the Subject Property before proceeding with the auction sale as contemplated under sub Rule (5) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 (for short, ‘the said Rules’).

(v) In the said Securitization Application No. 115 of 2019, the Respondent no.1 Rajat Infrastructure had also filed an Interlocutory Application No. 822 of 2019 seeking interim relief restraining the Appellant Bank from proceeding further with the proposed auction sale, pending the main application. The DRT Mumbai vide the order dated 11.11.2019 refused to grant the ad interim relief as prayed for in I.A. No. 822 of 2019.

(vi) The Respondent no.1 being aggrieved by the said order passed by the DRT, preferred a Writ Petition being (ST No.29319 of 2019). The Bombay High Court vide the order dated 25.11.2019 relegated the Respondent no.1 to the statutory remedy of appeal before the Debt Recovery Appellate Tribunal (for short ‘DRAT’). It was observed in the said order by the High Court that: -

“the petitioner has an efficacious alternate remedy of appeal before the learned DRAT, where no pre-deposit is required.”

(vii) Pending the said Writ Petition before the High Court, the auction having taken place, the Respondent no.6 M/s. Sunview Assets Pvt. Ltd. (the Applicant herein) claimed to be the highest bidder for a