Point of Law: When an auction-sale is advertised in well-known newspapers having wide circulation, all eligible persons can come and bid for the same, and they are themselves to be blamed if they do not come forward to bid at the time of the auction.

JUDGMENT :

The attempt of a lone bidder in an auction, to implead in a securitisation application before the Debts Recovery Tribunal ended in a failure. The said lone bidder, is challenging in this original petition, two separate orders issued by the Tribunal, including the order rejecting his application for impleading. Original petitioner claims to be the auction purchaser and is challenging Ext.P2 order dated 15-01-2021 and Ext.P5 order dated 08-02-2021 passed by the Tribunal. This challenge is preferred under Article 227 of the Constitution of India.

2. There are three parties to this litigation, (i) original petitioner, (ii) respondents 1 and 2, and (iii) respondents 3 and 4. Petitioner claims to be the auction purchaser while respondents 1 and 2 are the borrowers, the 3rd and 4th respondents are the asset reconstruction company and its authorized officer, respectively. For easier comprehension, the three parties are referred to as Petitioner, Borrowers and ARC in this judgment.

3. In the first amongst the two impugned orders, the Tribunal had observed that the Borrowers had arranged a proposed purchaser who was ready to purchase the security interest for Rs.7.60 Crores. It is observed in Ext.P2 that the Borrowers will accordingly pay an amount of Rs.2 Crores through the proposed purchaser within eight days and the balance on or before 07-02-2021. In the latter of the two orders, i.e. Ext.P5, the Tribunal rejected the impleading application of the Petitioner herein.

4. Challenge in this original petition is built upon the auction notice published on 03-12-2020 and the consequent participation of the Petitioner at the auction held on 29-12-2020 for Rs.7.51 Crores. By Ext.P1 letter issued by the ARC to the Petitioner on 31-12-2020, it was conveyed that Petitioner’s bid was accepted and the balance amount of auction money is liable to be deposited. It is claimed that, after the publication of the auction sale notice and the consequent sale, Borrowers could not have brought in any person to purchase the property. On 15-01-2021, the Tribunal, by Ext.P2 order permitted the Borrowers to deposit an amount of Rs.2 Crores through an intending purchaser, that too, for a sum which was merely Rs.9 lakhs more than what the Petitioner had bid for, at the auction. Petitioner alleges that the direction of the Tribunal to the ARC to accept the amount of Rs.2 Crores, behind the back of the auction purchaser and contrary to section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the Act), is without authority and in excess of its jurisdiction.

5. Petitioner further contends that, on coming to know about the order of the Tribunal dated 15-01-2021, it sought to implead itself in the securitisation proceedings by filing I.A No.158 of 2021 (Ext.P3), apart from I.A No.159 of 2021, seeking directions to confirm the sale and issue the consequent sale certificate favouring the Petitioner. It is pleaded that the Tribunal by Ext.P5 order dismissed the application for impleading. According to the Petitioner, after the Borrowers lost their right to redeem the property, the Tribunal could not have permitted the Borrowers to bring in some other person to purchase the property by offering to pay an amount which is marginally higher than what was bid at, by the Petitioner. The findings of the Tribunal are attacked as being contrary to the statute and the settled propositions of law.

6. A counter affidavit has been filed on behalf of the Borrowers. Apart from questioning the maintainability of the original petition on the ground of alternative remedy under section 18 of the Act, it is stated that Ext.P2, though styled as an order, is only a proceeding recording an arrangement entered into between the Borrowers and the ARC and hence, the same cannot be subject to any supervisory jurisdiction of this Court under Article 227 of the Constitution of India.

7. The Borrowers further pleaded that