IMPORTANT POINT
The court established that a secured creditor must deliver physical possession of a property sold at auction, free from encumbrances, as per the SARFAESI Act and the Security Interest (Enforcement) Rules, and failure to do so constitutes a breach of duty.

JUDGMENT :

Sindhu Sharma, J.

1. The petitioner in this petition seeks issuance of appropriate writ of mandamus, order or direction to the respondents to put him into physical possession of the property being a double story commercial building constructed on a plot measuring 20' x 60' on shop Site No. 115 Phase-I Fruit Market Complex, Narwal Jammu. The case set up by the petitioner is that Respondent No. 1/Punjab National Bank had issued an e-auction sale notice in the newspaper on 04.09.2019 as per SARFAESI Act and Rules with respect to auction of Double Story Commercial Building constructed on a plot measuring 20' x 60' on Site No. 115 Phase-I Fruit Market Complex, Narwal Jammu owned and possessed by late Sh. Vipin Kumar Gupta. This premise was leased out and possessed by legal heirs of deceased lessee namely Vipin Kumar Gupta, who had mortgaged the lease hold rights of the property which were granted to him by the Jammu and Kashmir Horticulture Department by way of Lease Deed dated 15.01.2011 executed by the said department in his favour. As the borrower of the property, i.e., M/s N.S. Walnut became defaulter, the property was proceeded against and ultimately, e-auction of the property was held on 09.10.2019. The petitioner participated in the public e-auction process initiated by Respondent No. 1 for sale of its secured assets and was declared as successful auction purchaser on 09.10.2019 of Double Story Commercial Building constructed on a plot measuring 20' x 60' on Site No. 115 Phase-I Fruit Market Complex, Narwal, Jammu.

2. The petitioner was directed by the respondents to make payment of entire bid amount within a period of fifteen days i.e., before 24.10.2019, failing which, earnest money submitted by him would be forfeited. The petitioner, accordingly, deposited the entire bid Amount of Rs. 1,67,50,000/- (Rupees one Crore Sixty Seven Lakh and fifty thousand only) with the bank. After receiving the entire amount, the Respondent No. 1 had to issue a sale certificate as well as give physical possession of the property. The contention of the petitioner is that the sale certificate of the property was issued to the petitioner on 03.01.2020, which stated handing over the delivery of possession but, in fact, the physical possession of the property was not given to the petitioner. The petitioner immediately approached the respondents for handing over the physical possession of the property to him but he was informed that some trespassers had taken possession of the said property and the Bank has initiated the proceedings against them. The petitioner, accordingly, again vide his e-mail dated 16.03.2020 requested the Bank to deliver the physical possession of the property sold to him which had not been given till date.

3. Respondent No. 1 in reply to this e-mail had stated that the Bank had sold the property on the basis of symbolic possession and the Bank had moved to the appropriate authority for removing encumbrances from the property in question. However, during the process, some self claimed owners of the property had managed to get restraining order from the Court and immediately after getting the said order, the Bank had also moved to the Court and on 03.01.2020, though the Bank was successful in taking the physical possession of the said property and on the same day had also issued a sale certificate to the successful bidder, i.e., the petitioner but unfortunately on the same day, some miscreants broke open the seal and locks of the Bank from the aforesaid property and regarding this, the Bank has already lodged an FIR with the competent authority. It was further stated that the Respondent No. 1 is in procedure of getting back the possession of the aforesaid property which is under process as per the law.

4. The grievance of the petitioner is that the sale certificate was issued to the petitioner as the Respondent No. 1 had auctioned the aforesaid premise and the petitioner has purchased the same in auction by paying the en