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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. RAJESWARAN AND S. VAIDYANATHAN, JJ.
Beauline Global Services (P) Ltd., rep. By its Managing Director, Tuticorin 628 002
Versus
Indian Bulls Housing Finance Ltd., rep. By its Authorised Officer, T. Nagar, Chennai 600 017 and Another
W.P. No. 4066 of 2014 M.P. Nos. 1 and 2 of 2014
Decided on: 25 March 2014
The writ petition was filed challenging the action of the 1st respondent in re-auctioning the properties described in the Public Notice dated 17.01.2014, by forfeiting 25% of the amount deposited as sale price in the auction, without giving an opportunity to the petitioner to deposit the balance 75% of the sale price, after clearance of the encumbrance.
Fact of the Case:
The petitioner submitted its bid for the purchase of the scheduled properties on 30.08.2013, quoting the price of Rs. 17,80,00,000/-, which was accepted by the 1st respondent and as per the terms of the notice, the petitioner deposited 25% of the sale price with the 1st respondent. The 1st respondent by its letter dated 30.08.2013, granted time to the petitioner to deposit the balance 75% of the sale price on or before 14.09.2013. Since the petitioner could not make the payment within the stipulate time, it sought time till 15.10.2013 and the period was also extended by the 1st respondent vide its letter dated 14.09.2013. However, the 1st respondent did not furnish the copy of the order dated 12.08.2013 passed in I.A. No. 329 of 2013 in O.A. No. 146 of 2013, which was reflected in the Encumbrance Certificate issued by the Sub Registrar Office, Tiruvottiyur.
Finding of the Court:
The court found that there was no encumbrance on the schedule property at the time of the publication of the sale notice and the 1st respondent had complied with the Rules by disclosing all the encumbrances known to it on the date of the sale notice. The court also found that the petitioner had not come with clean hands as it had failed to pay the balance 75% of the sale price despite being granted several extensions of time.
Issues: 1. Whether the action of the 1st respondent in re-auctioning the properties described in the Public Notice dated 17.01.2014, by forfeiting 25% of the amount deposited as sale price in the auction, without giving an opportunity to the petitioner to deposit the balance 75% of the sale price, after clearance of the encumbrance, is correct or not? 2. Whether the petitioner is entitled to any relief on merits in this WP.
Ratio Decidendi: The court held that the action of the 1st respondent in re-auctioning the properties was correct as there was no encumbrance on the schedule property at the time of the publication of the sale notice and the 1st respondent had complied with the Rules by disclosing all the encumbrances known to it on the date of the sale notice. The court also held that the petitioner was not entitled to any relief on merits as it had failed to pay the balance 75% of the sale price despite being granted several extensions of time.
Final Decision: The writ petition was dismissed with a cost of Rs. 25,000/- (Rupees twenty five thousand only) to be paid by the petitioner to the Cancer Institute, Madras within a period of one month from the date of receipt of a copy of this order.
MR. S. VAIDYANATHAN, J.
1. The writ petition was filed originally with the following prayer:
“to issue a writ of mandamus to forbear the 1st respondent from re-auctioning the properties described in the Public Notice for auction sale dated 17.01.2014 on 18.02.2014 or any other date by forfeiting the amount of Rs. 4,45,00,000/- deposited by the Petitioner towards 25% of the sale price in auction held on 30.08.2013, without giving an opportunity to the petitioner to deposit the balance 75% of the sale price after clearance of the encumbrance stated by the 2nd respondent in its letters dated 24.12.2013 and 18.01.2014”.
2. The above prayer stood amended pursuant to the order of this Court dated 04.03.2014 made in M.P. Nos. 3 and 4 of 2014 and the same is as follows:
“to issue a writ of certiorarified mandamus to call for the records of the 1st respondent dated 17.01.2014 for re-auctioning the properties described in the Public Notice for auction sale dated 17.01.2014 on 18.02.2014 or any other date forfeiting the amount of Rs. 4,45,00,000/- deposited by the Petitioner towards 25% of the sale price in auction held on 30.08.2013 and direct the 1st respondent to give an opportunity to the petitioner to deposit the balance 75% of the sale price after clearance of the encumbrance stated by the 2nd respondent in its letters dated 24.12.2013 and 18.01.2014”.
3. The learned Senior Counsel for the petitioner by referring to the facts leading to the filing of this writ petition has submitted that
(i) On 27.07.2013, the 1st respondent Company, having its registered office at New Delhi and its local office at Chennai, issued a Public Notice for auctioning the properties mentioned in the schedule, which has been mortgaged by Exim Rajathi India Private Limited and Rajathi Properties Holding Pvt. Ltd., in exercise of the powers conferred under Section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter called as the SARFAESI Act), fixing the upset price as Rs. 17,75,00,000/-. The petitioner submitted its bid for the purchase of the scheduled properties on 30.08.2013, quoting the price of Rs. 17,80,00,000/-, which was accepted by the 1st respondent and as per the terms of the notice, the petitioner deposited 25% of the sale price with the 1st respondent. The 1st respondent by its letter dated 30.08.2013, granted time to the petitioner to deposit the balance 75% of the sale price on or before 14.09.2013. Since the petitioner could not make the payment within the stipulate time, it sought time till 15.10.2013 and the period was also extended by the 1st respondent vide its letter dated 14.09.2013. In the said letter of the 1st respondent dated 14.09.2013, for the first time read that the Company undertakes to deliver the possession of the property in question after clearing the encumbrances known to the company and this was a marked deviation from its original stand, wherein it had stated that it had no knowledge of any subsisting encumbrances.
(ii) It is the further contention of the learned Senior Counsel for the petitioner that the pendency of the proceedings before the Debt Recovery Tribunal No. II, Chennai in I.A. No. 329 of 2013 in O.A. No. 146 of 2013 came to the knowledge of the petitioner, only when he applied and got encumbrance certificate on 02.10.2013. Subsequently, on 10.10.2013, the petitioner requested the 2nd respondent to advance the balance sale consideration, so that it can remit the same with the 1st respondent. On 16.10.2013, the petitioner informed the 1st respondent about availing of term loan from the 2nd respondent and sought for extension of time till 15.11.2013 and the 1st respondent on 23.10.2013, also granted extension of time till 15.11.2013, subject to forfeiture, if the amount is not deposited within such time. Hence, the petitioner on 04.11.2013 informed the 1st respondent that discharge certificate copy to be furnished otherwise the 2nd respo
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