2013 Supreme(Bom) 2463

In the High Court of Bombay at Aurangabad
B.P. DHARMADHIKARI & RAVINDRA V. GHUGE, JJ.
Umang Sugars Private Limited
Versus
State of Maharashtra, through it's Secretary Department of Co-operation & Another
Writ Petition No. 6331 of 2013
Decided On: 10-12-2013

Headnote:Constitution of India - Article 226 - SARFAEOSI Act, 2002, Section 17 - Maintainability of writ petition. - Where under was invited by Bank for sale of borrower’s property therefore bidder can file writ petition for his grievance as appeal under Section 17 of Act in not an alternate remedy for him.

       Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(4) - Tender for sale of borrower‘s property. - Since withdrawal of highest bidder from tender is justified hence bidder entitled to refund of Earnest Money Deposit (EMD). - It is an admitted position that the tender was opened on 11.2.2013 and was accepted on 12.2.2013. E.M.D. has been deposited on 18.2.2013. Sum and substance of the contention of the petitioner is that it could not proceed with the tender in view of the pending litigation which it was not aware of. It is also the case of the petitioner that it had consistently requested respondent No. 2/Bank to supply necessary documents so as to enable the petitioner to seek financial assistance from financial institutions on the strength of the said documents which eventually were not supplied to the petitioner despite adequate persuasion. It is also the case of the petitioner that it had not sought extension of time to pay the remaining 75% amount and that it was through correspondence at the behest of respondent No. 2 that it had requested the petitioner to defer the payment of the remaining amount in view of interim orders passed by the Debt Recovery Tribunal and later by the Debt Recovery Appellate Tribunal.

       To add to the woes of the petitioner, respondent No. 2 extended time to deposit the remaining amount and at the same time, informed the petitioner that 8% interest would be levied for a period of one month on the remaining amount and that would be followed by 12% interest for a period of 3 months and thereafter @ 18% interest. According to the petitioner, this has been an atrocious approach adopted by respondent No. 2 which has resulted in penalizing the petitioner for no fault on its part.

       Notwithstanding the fact that there appears to be a blame game between the petitioner and respondent No. 2, which neither bothers us nor deters us from arriving at a conclusion. From the facts narrated hereinabove, we find that on account of no fault on the part of the petitioner and no laches being attributable to the conduct of the petitioner, it has suffered and therefore said blame game is not relevant. On the one hand, it is constrained to withdraw from the tender/bid and on the other hand it has suffered the impugned order, dated 31.7.2013 issued by respondent No. 2 to the extent of rejecting the claim of refund of 25% E.M.D. In short, respondent No. 2 has forfeited the amount.

       In the instant case, on the one hand, respondent No. 2/Bank desired that the petitioner should proceed with the tender proceedings and complete the sale and on the other hand issued letters to the petitioner to defer depositing of the balance amount in view of the interim orders passed by the Debt Recovery Tribunal and Debt Recovery Appellate Tribunal. 25% amount i.e. Rs. 8,90,67,750/- is already deposited by the petitioner and to enable it to deposit the balance 75% amount of Rs. 26,72,03,250/-, respondent No. 2 unilaterally extended time and further imposed interest at penal rate for such extended period. Vacation of restraining orders by the DRT is an uncertain event and time it may take is not known even today. This extension, not being bilateral, can not revive or continue the contract after expiry of time to deposit balance amount.

       Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(4) and 17 - Appeal. - An appeal under Section 17 of Act is available to a person who is aggrieved of measures taken under Section 13(4) of Act. - Section 17 of the SARFAESI Act gives a right to appeal to any person including the borrower aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorized officer under the said chapter. Needless to state, Section 17 is a remedy to a person who is aggrieved by any measures taken by the secured creditor under Section 13(4).

       Section 13(4) clearly appears to be a provision meant only for the secured creditor to take recourse to one or more of the measures mentioned in sub-clauses (a) to (d). As such, Court is of the view that measures initiated under Section 13(4) by M/s. Uttam can not be termed to be the measures initiated by a secured creditor. As such, though for the purposes under Section 17 (Right to appeal) of the SARFAESI Act, the petitioner is presumed to fall within the meaning of ’any person’, it can not be held to be aggrieved by the appeal filed by M/s. Uttam. Our view is fortified by the phraseology of Section 17 as well in light of the words ’any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor’. As such, in our considered view, the petitioner would not have an alternate remedy of right to appeal under Section 17.