Judicial Analysis Court Copy Headnote Facts Arguments Court observation

BOMBAY HIGH COURT
B.P. Dharamadhikari and Ravindra V. Ghuge, JJ.
Umang Sugars Private Limited, Through its Director, Satish Jagannath Ghatge Patil —Petitioner
versus
The State of Maharashtra, Through it’s Secretary Department of Cooperation & Anr. —Respondents
Writ Petition No. 6331 of 2013
Decided on 10.12.2013

Counsel for the Parties:
For the Petitioner:Mr. V.D.Sapkal h/f Mr. Y.V.Kakade, Advocates.
For the Respondent No.1: Mr. P.P.More, A.G.P.
For the Respondent No.2:Mr. S.B.Gorade Patil, Advocate.

IMPORTANT POINT
Conduct of secured creditors must be conducive to encourage more & more persons to participate in its auctions.

Headnote:Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002—Sections 13(4) and 17—Possession of secured asset—Auction sale—Writ jurisdiction can be exercised by High Court despite availability of alternate remedy whenever there is contravention or violation of principles of natural justice—Merely because some alternate remedy could be available, is not enough to relegate a litigant to avail of such remedy—Contention of respondent that petition is not maintainable and that High Court should refrain itself from entertaining a dispute falling within realm of Indian Contract Act, is a feeble and unsustainable objection— When there is violation of principles of natural justice or when proceedings are without jurisdiction, High Court may pass suitable orders in exercise of writ jurisdiction—Presently, time of 30 days to deposit 75% amount rendering its deposit impossible was issued by DRT—If loan recovery through auction process has to be expeditious process, spirit of SARFAESI Act also warrants that auction purchaser cannot be made to wait indefinitely or watch helplessly with huge money blocked— Petitioner had not purposefully or for any oblique motive rescinded from tender proceedings or refrained from depositing remainder 75% of bid amount—Impugned order set aside and respondent directed to refund 25% amount of EMD along with simple 6% interest . (Paras 42, 43 and 58)

JUDGMENT

Ravindra V. Ghuge, J.—Rule.

2. Rule made returnable forthwith by consent of the parties and heard the respective advocates. 3. The petitioner is a Private Limited Company registered under the Companies Act. Respondent No.1 is the Department of Cooperation, State of Maharashtra. Respondent No.2 is the Cooperative Bank & a Secured Creditor which has taken possession of the assets of borrower the Ghrushneshwar Sahakari Sakhar Karkhana Ltd., under the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI Act). It then issued the tender for the sale of movable and immovable assets of the said Karkhana.

4. The contention of the petitioner is that respondent No.2 has its Regional Office at Aurangabad. The said Bank had given loan to the Ghrushneshwar Sahakari Sakhar Karkhana Ltd. Khatnapur, Tal.Khultabad, Dist. Aurangabad. (Hereinafter referred to as the G.S.S.K.L.). G.S.S.K.L. went into liquidation and accordingly respondent No.2 took over movable and immovable assets against the loan sanctioned by it and other consortium members of the said Bank.

5. Certain dates and events germane to the controversy before us need to be recorded. With the assistance of Mr.V.D.Sapkal and Mr.S.B.Gorde, learned advocates representing the petitioner and respondent No.2 respectively, we have compiled the dates and events in chronological order, which are as follows :

08/01/2013 Proclamation about the tender/bid for sale of movable and immovable properties of G.S.S.K.L. was published in “Dainik Sakal” and “Economic Times”, newspapers having wide circulation.

14/01/2013 to 31/01/2013 The time frame for purchase of tender/bid forms.

07/02/2013 The last date up to 5.00 p.m. for submission of tenders at the Head Office of respondent No.2 at Mumbai.

07/02/2013 The petitioner submitted its tender/bid form within time.

11/02/2013 Opening of the tender/bid forms. It is found that the petitioner was the highest bidder. 08/02/2013 S.A. filed alongwith Misc.Appl.(Delay) No.11/2013 and interim application No.96/2013 in the Debt Recovery Tribunal (D.R.T.) by One Uttam Engineering Ltd. Not a party to the instant proceeding.

12/02/2013 The petitioner’s bid is accepted. Respondent No.2 has directed the petitioner to pay the remainder portion from the initial 25% amount to be deposited within a period of 7 days and the rest of the amount to be deposited within a period of 30 days as per tender terms.

18/02/2013 The petitioner deposited the balance of the 25% of the amount with respondent No.2.

20/02/2013 The petitioner communicated to respondent No.2 seeking some documents so as to enable the petitioner to approach financial institutions for aid in order to generate funds and deposit rest of the 75% amount.

25/02/2013 The Debt Recovery Tribunal passed an order on the interim application No.96/2013 filed by M/s Uttam Engineering Ltd. The appearance of respondent No. 2 is shown recorded as respondent No.2 appeared in the matter on oral instructions. Notice is issued to respondent No.2/Bank on 25/02/2013 and made returnable on 06/03/2013.

27/02/2013 The notice of Debt Recovery Tribunal is formally served on respondent No.2/Bank. 06/03/2013 Respondent No.2 formally filed its appearance on its behalf and sought copies of the interim application no.96/2013 and M.A.No.11/2013 to enable it to file reply.

11/03/2013 The petitioner once again communicated to respondent No.2 seeking draft copies of the certificate of sale, sale/purchase agreement/deed.

16/03/2013 Petitioner again communicated to respondent No. 2/Bank vide its letter dated 16/03/2013 once again seeking copies of the documents. 16/03/2013 Legal opinion dated 16/03/2013 (Page 58 of the petition paper book) is forwarded by the Advocate for respondent No.2 Mr.S.B.Gorde intimating respondent No.2/Bank that in view of the interim order passed by the Debt Recovery Tribunal on the application made by Uttam Industries Limited

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IMPORTANT POINTConduct of secured creditors must be conducive to encourage more & more persons to participate in its auctions.

Cases Referred (3)

IMPORTANT POINT
Conduct of secured creditors must be conducive to encourage more & more persons to participate in its auctions.