The main legal point established in the judgment is that the Bank's actions must adhere to the statutory provisions and be fair and transparent, especially in the context of property auctions under the SARFAESI Act.

ORDER :

1. This writ Petition is filed for the following relief:

“to issue an appropriate order, writ or direction more particularly one in the nature of writ of Mandamus declaring the inaction on the part of the respondent Bank in not considering the representation submitted by the petitioner dated 11.10.2019 through e-mail for refund of part sale consideration amount paid by the petitioner pursuant to the auction held by the respondent Bank on 26.08.2019 for sale of vacant site admeasuring 302.50 square yards situated at D. No. 21/B and 21/B2, near D. No. 45-32/16, Near Little Flower School and Chennakesava Towers, Ring Road, 1st Line, Vidya Nagar, Guntur in respect of Loan A/c No. 2492261010159 of M/s. Perumallu Agro Industries as illegal, arbitrary and contrary to law and consequently direct the respondent Bank to refund the part sale consideration amount paid by the petitioner pursuant to the auction held by the respondent Bank on 26.08.2019 for sale of vacant site admeasuring 302.50 square yards situated at D. No. 21/B and 21/B2 near D. No. 45-32/16 Near Little Flower School and Chennakesava Towers, Ring Road, 1st Line, Vidya Nagar, Guntur in respect of Loan A/c No. 2492261010159 of M/s. Perumallu Agro Industries in the interest of justice......”

2. This Court has heard Sri K.V. Simhadri, learned senior counsel for Smt. Manikya Veena and Sri Hari Narayana, learned standing counsel for the respondent-Bank.

3. As per Sri K.V. Simhadri, learned senior counsel, pursuant to a sale notice dated 07.08.2019; the writ petitioner participated in an auction conducted by the respondent-Bank under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Act (for short SARFAESI Act’). His bid was accepted on 26.08.2019. Thereafter, in terms of the bid etc. 25% of the amount was paid by the writ petitioner amounting to Rs.22.50 lakhs. Since he could not mobilize the rest of the funds due to his health reasons as he was constantly suffering from dengue fever, he sought extension of time. The time for deposit of amount was extended twice from 10.09.2019 to 25.10.2019. The petitioner’s ill-health continued. He also submitted a request for furnishing the link documents which were not furnished by the Bank. It is also urged by the learned senior counsel that as per advertisement published, the site measures 302.50 sq. yards, but in reality, it is only 240 sq. yards and the rest is a pathway. It is stated that the site is a ‘L’ shaped site and these details were not furnished by the respondent-Bank. Learned counsel by relying upon Rule 8(5) and 8(6) and the proviso therein of the Security Interest (Enforcement) Rules, 2002 (for short ‘the Rules’) states that the respondent-Bank had a duty to publish the advertisement clearly and categorically so that the intending buyer would know the site conditions and bid accordingly. He submits that the reason for the delay in deposit is genuine and that as the requisite details of the site were not furnished in the advertisement, the bid submitted by the writ petitioner is not realistic. In addition, he submits that the Bank entered into a One Time Settlement with the original borrower and that they also closed the loan account. Therefore, they did not sustain any loss in the matter as they willingly closed the account. It is submitted that the Rules and in particular, Rule 8(6) of the Rules is flouted along with Rule 9(4) and 9(5) of the Rules. It is argued that the Bank committed a gross error in adjusting the amount deposited even before the last date of payment.

4. Relying upon two judgments reported in Mandava Krishna Chaitanya vs. UCO Bank, Asset Management Branch, 2018 (3) ALD 266 and Adhya Industries and Others vs. Vijaya Bank and Others, MANU/TL/0049/2020 learned senior counsel argues that the writ must be decided in his favour as the Rule is now caveat venditor and not caveat emptor.

5. In reply to this, Sri Hari Narayana, learned sta