The court established that the time for deposit under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 is extendable with mutual consent, and unilateral cancellation by the bank was unjustified.

JUDGMENT :

PANKAJ MITHAL, J.

1. Leave granted.

2. The appellant-IDBI Bank has preferred these two appeals challenging the judgment and order dated 19.09.2022 passed by the High Court in Writ Petition No. 3820 of 2020, Ramswaroop Daliya and Others vs. IDBI Bank Ltd. and the order dated 29.11.2022 passed in Review Petition No. 1 of 2022 arising from the above writ petition.

3. The respondents who were the petitioners in the writ petition are the auction purchasers of the property which comprises of 2 guntas of land of Survey No. 121 part, situated at Bogaram village, Keesara Mandal, Medchal Malkajgiri district, Telangana. Pursuant to the e-auction notice dated 17.03.2018, the auction took place on 10.04.2018. The respondents were the highest bidders for a total sum of Rs. 1,42,50,000/-. They deposited 25% of the bid amount i.e. Rs. 36,00,000/- on the day of the auction itself. The auction was confirmed but the sale certificate was not issued and the sale deed was not executed as the respondents could not deposit the balance sale consideration within 15 days, may be for the reason that the appellant-Bank refused to accept the balance amount for various reasons. Finally, the appellant-Bank vide communication dated 24.12.2019 cancelled the auction and refunded the amount deposited by the respondents by means of four demand drafts which were never encashed by the respondents.

4. The respondents as such invoked the writ jurisdiction of the High Court challenging the action of the appellant-Bank cancelling the auction dated 10.04.2018 unilaterally and for seeking a direction to issue the sale certificate after receiving the balance sale consideration of Rs. 1,06,50,000/-.

5. The aforesaid Writ Petition No. 3820 of 2020 filed by the respondents was allowed by the impugned judgment and order dated 19.09.2022 passed by the High Court holding that the appellant-Bank was not justified in withholding the sale certificate. The respondents were always ready and willing to pay the sale consideration. The appellant-Bank could not have denied the issuance of the sale certificate and the execution of the sale deed. The issuance of the sale certificate was not refused by the appellant-Bank for want of non-deposit of the balance sale consideration within 90 days as stipulated under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002¹ [Hereinafter referred to as ‘the Rules’] therefore, such a plea taken by the appellant-Bank for the first time in the writ petition is not tenable.

6. The argument of the learned counsel for the appellant-Bank is that in view of the statutory provisions contained under the Rules, especially Rule 9(4) of the Rules, since the respondents had not deposited the balance sale consideration within the mandatory period of 90 days, the High Court has erred in directing the appellant-Bank to issue the sale certificate and to execute the sale deed. The balance sale consideration was never deposited by the respondents within the time permitted and the letters of the respondents clearly establishes that they kept on seeking extension of time without depositing the amount. Moreover, on the complaint of the appellant-Bank to the Central Bureau of Investigation² [in short “CBI”] made on 08.03.2018, the Enforcement Directorate³ [in short “ED”] had taken suo moto cognizance and issued an advisory to the appellant-Bank not to release the title deeds.

7. In the facts and circumstances of the case, the only issue which arises for consideration is as to whether there was any default on part of the respondents in depositing the balance amount within the time prescribed pursuant to the auction sale dated 10.04.2018 so as to attract Rule 9(4) of the Rules and allow the appellant-Bank to cancel the auction which had already been confirmed.

8. There is no dispute to the fact that the appellant-Bank had issued e-auction notice on 17.03.2018 and had conducted the auction on 10.04.2018. The respondents had participated in the said auction and were