The impact of communication from the bank on the actions of auction purchasers and the compliance with the Security Interest (Enforcement) Rules were central to the court's decision.

JUDGMENT

(Prayer: Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorarified Mandamus to quash the order dated 22.02.2023 passed by the Debt Recovery Appellate Tribunal in RA Nos.16 of 2021 and 17 of 2021 and restore the order dated 04.02.2021 passed by the Debts Recovery Tribunal in SA No.243 of 2019.)

Sanjay V. Gangapurwala, C.J.

1. We have heard Mr.Satish Parasaran, learned Senior Counsel for the petitioners.

2. The present petitioners are the borrowers of respondent No.1. The petitioners defaulted in payment of the loan amount. Proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short ''the SARFAESI Act'') were undertaken by respondent No.1. Eventually, eauction notice was issued in respect of the secured assets of the petitioners. E-auction was conducted and the sale was confirmed on 16.08.2019. The auction purchasers deposited 25% of the amount on 17.08.2019. On or about 19.08.2019, the petitioners approached the Debts Recovery Tribunal by filing Securitisation Application. On 19.08.2019, the Debts Recovery Tribunal passed an interim order thereby granting stay on condition that the petitioners deposit Rs.10,00,00,000/- (Rupees ten crores only) on or before 26.08.2019 and further Rs.10,00,00,000/- (Rupees ten crores only) on or before 31.08.2019. The said stay order was a conditional one, upon default being committed, the stay would axiomatically stand vacated. The petitioners did not comply with the first condition of deposit of Rs.10,00,00,000/- (Rupees ten crores only) on or before 26.08.2019. The stay stood vacated. On 26.08.2019, the bank issued a communication to the auction purchasers that the auction purchasers shall not deposit the amount until further communication. On or about 03.09.2019, the bank communicated the auction purchasers that the borrowers did not comply with the condition imposed for grant of interim order and that the balance payment be made. On 10.09.2019, the auction purchasers made the payment of 75% of the amount.

3. The Debts Recovery Tribunal allowed the Securitisation Application filed by the present petitioners on the ground of non- compliance of Rule 9(4) of the Security Interest (Enforcement) Rules, 2002, inter alia observing that there is no written agreement for extending the time. The Debt Recovery Appellate Tribunal, on an appeal filed by the bank, allowed the appeal and set aside the judgment of the Debts Recovery Tribunal holding that the compliance is made by the auction purchasers. Aggrieved thereby, the present writ petition.

4. Mr.Satish Parasaran, learned Senior Advocate for the petitioners, strenuously contends that the Debts Recovery Tribunal had rightly come to the conclusion that Sub-Rule (4) of Rule 9 of the Security Interest (Enforcement) Rules has not been complied with. There is no agreement in writing between the auction purchasers and the bank extending the time to deposit the amount. The learned Senior Advocate, to buttress his submission, relies upon the judgment of the Division Bench of Telangana High Court in a case of P.Sudha Lakshmi vs. Bank of India reported in 2018 (4) ALT 518. The learned Senior Advocate further submits that when Rule 9(4) contemplates agreement between the parties, the borrower also is to be included in it as the borrower is to be made known about the time being extended so that the borrower can bring a better prospective purchaser. It is further contended that the bank in clear terms had averred that the confirmation of sale was revoked and once the confirmation of sale is revoked, there is no further fresh auction conducted. On this count also, the appeal deserved to fail.

5. We have considered the submissions and also heard Mr.A.Arokia Sathish learned counsel for the first respondent.

6. The chronology of dates and events as narrated above are not disputed.

7. It is not disputed that the auction purchasers had deposited 25% of t