JUDGMENT :

1. This writ-petition has been filed by the State Bank of India seeking to set aside the order passed by the Debts Recovery Appellate Tribunal on August 31, 2022.

2. The principal grievance of the Bank is that the order passed by the Appellate Tribunal directing refund of a sum of Rs. 1.95 Crore to the respondent no. 1, is illegal and should be set aside.

3. The brief facts leading to this writ petition are enumerated hereinafter.

4. The petitioner, pursuant to proceedings initiated by it against the borrower and guarantor for default of a loan, had put the mortgaged properties of such borrower for sale. The sale notice dated December 16, 2014, specifically mentioned that the property included therein for the purpose of sale would be held on “as is where is basis”. It also specified that all intending purchasers would be entitled to inspect the property and the documents of title pertaining to such property.

5. The respondent no. 1 participated in the auction process and was adjudged the highest bidder at Rs. 7.81 Crores. In terms of the notice, the respondent no. 1 had deposited a sum of Rs. 1.95 Crores, aggregating to 25 per cent of the bid amount, on January 21, 2015. The last date to pay the balance sale value was February 4, 2015.

6. On February 4, 2015, the respondent no. 1 sought certain clarifications, including inspection all the title deeds of the entire property as advised.

7. Since, the bank did not reply to the notice of February 4, 2015 the respondent no. 1 sent similar notices on March 17, 2015 and March 23, 2015.

8. The bank replied to such notices on March 26, 2015, stating that, in terms of the request of the respondent no. 1, relevant documents had already been given for inspection. In fact, in this letter, the bank had extended the time to make payment of the balance consideration by the respondent no.1.

9. It is not clear when such documents were handed over.

10. Evidently, after inspection of the documents, the respondent no.1 found multiple discrepancies, which were noted and intimated to the bank, seeking further clarification, on April 21, 2015. From the said letter of April 21, 2015, it appears that even though 17 title deeds had been given for inspection, the land purported to be sold measuring approximately 270.46 satak (approximately 1,17,814 square feet), with building and structure, being the subject matter of 17 registered deeds was actually of a much lesser area of 242 sataks. In fact, the bank had failed to mention in the notice that there was a pending land acquisition case and that the chain of title in respect of fragmented land areas was not available.

11. There was no reply or clarification given by the bank to the concerns of the respondent no. 1 as specified in the letter of April 21, 2015.

12. Since the respondent no. 1 had not paid the balance 75 per cent of the sale consideration, the bank had approached the Debts Recovery Tribunal and obtained an order, whereby the bank was permitted to put the property for resale. The property was thus sold, this time for a higher price of Rs. 7.82 Crores.

13. In the meanwhile, on August 18, 2015, the Bank informed the respondent no. 1 that its earnest money deposit constituting 25 per cent of the sale price quoted by the respondent no. 1 was being forfeited.

14. The respondent no. 1 had thereafter approached the Debts Recovery Tribunal seeking refund of the security deposit by way of an IA No. 1000 of 2015 in the SARFAESI application filed by the borrower. This application was however rejected and was carried in appeal by the respondent no. 1 before the Debts Recovery Appellate Tribunal.

15. It was on August 31, 2022 that the Debts Recovery Appellate Tribunal allowed the appeal of the respondent no. 1 and directed the petitioner herein to refund a sum of Rs. 1.95 Crores to the respondent no. 1 along with interest at fixed deposit rates.

16. It is this order of the Debts Recovery Appellate Tribunal which has been challenged in the present proceeding by