The main legal point established in the judgment is that the promisor is entitled to seek reciprocal performances from the promisee after the period of impossibility expires, and the question of payment of compensation does not arise when there is no element of failure on the promisor's part.

JUDGMENT :

M.M. Sundresh, J.

(Prayer: Petition filed under Article 226 of the Constitution of India praying to issue a writ of certiorarified mandamus calling for the records relating to the communication e mail dated 02.05.2020 sent by the Branch Head, Alangulam Branch, Tamilnadu Mercantile Bank Pvt. Ltd., the second respondent and quash the same and direct the respondents to extend the period for payment of balance amount by 45 days for the sale of the item 2 of the property under sale notice dated 13.01.2020 issued by the first respondent.)

1. In Periyar Pathai, Puliyur Village, Choolaimedu, Egmore, Nungambakkam (TK), Chennai, a land with an extent of 2400 sq ft., situated at old T.S.No.127 and 129, New T.S.No.129/4 pt was brought up for auction by the respondents on 03.02.2020 with the reserve price of Rs.1,50,00,000/- (Rupees One Crore and Fifty Lakhs only). The petitioner took part in the auction held on 03.02.2020 offering to bid for a sum of Rs.1,70,00,000/- (Rupees One Crore and Seventy Lakhs only). The following is the relevant terms and conditions governing the parties:-

“5. The successful bidder shall deposit the balance seventy five percent (75%) of the bid amount within 15 days of the sale or such extended period as agreed upon in writing by the Authorized Officer/Secured Creditor at his discretion. In case of any default in depositing the amount within the stipulated period, the deposit will be forfeited as per sub Rule (5) of Rule (9) of Security Interest (Enforcement) Rules 2002 and the property shall be resold and the defaulting purchaser will forfeit all his/her claims to the property or to any part of the sum for which it may be subsequently sold.”

1.1 Accordingly, the petitioner paid a sum of Rs.42,50,000/- (Rupees Forty Two Lakhs and Fifty Thousand only) being the one-fourth of the bid amount on 06.02.2020 followed by sale confirmation letter issued by the respondents. In furtherance of the sale, he made further payment of Rs.40,00,000/- (Rupees Forty Lakhs only) on 16.03.2020 and Rs.10,00,000/- (Rupees Ten Lakhs only) on 18.03.2020 and Rs.4,00,000/- (Rupees Four Lakhs only) on 21.03.2020. Thus, the petitioner paid a sum of Rs.96,50,000/- (Rupees Ninety Six Lakhs and Fifty Thousand only).

1.2 However, the petitioner did not pay the remaining amount within the maximum period of ninety days allowed. Accordingly, on 29.04.2020, the second respondent asked the petitioner to remit the remaining amount on or before 03.05.2020 failing which the one-fourth of the amount already paid shall stand forfeited. The relevant paragraphs of the said communication are appositely referred hereunder:-

“You have paid Rs.42,50,000(25% of bid amount) on 06.02.2020 and we have issued sale confirmation letter. Subsequently, you have paid an amount of Rs.40,00,000/- on 16.03.2020, Rs.10,00,000/- on 18.03.2020 and Rs.4,00,000/- on 21.03.2020.

Further, please note as per Sub- Rule(4) of Rule 9 of security interest rules – The balance amount of purchase price payable shall be paid by the purchaser to the authorized officer on or before the fifteenth days of confirmation of sale of the immovable property.

Sub-Rule (5) of Rule 9 of security interest rules – in default of payment within the period mentioned in sub-rule (4), the deposit shall be forfeited to the secured creditor and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.

Even though we have granted maximum period of three months time as per the rule (ie up to 03.05.2020) you have failed to remit the remaining amount till date. Therefore you are requested to pay the remaining bid amount of Rs.73,50,000/- on or before -03.05.2020. Otherwise the 25% of the bid amount already paid by you shall be forfeited as per the above said rules of the Act and the property will be resold and you have no claim over the property or to any part of the sum or which it may be subsequently sold.”