2009 Supreme(Ori) 10

2009 (II) OLR — 201
DR. B.S. CHAUHAN, C.J. AND B.N. MAHAPATRA, J.
Swastik Agency and 2 others...Petitioners
Versus
State Bank of India, Main Branch, Bhubaneswar and 3 others...Opp. Parties
W.P.(C) No.7361 of 2008
Decided on 8th January, 2009.

Headnote:1. SECURITIZATION AND RECONSTRUCTION OF THE FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 - Sec. 13(2), 13(4) - Petitioners failed to deposit the loan amount - Notice under the section - Notice for auction of property - Quashing of - Non-compliance of the statutory provisions would vitiate the proceedings altogether - If the notice is published in English in a newspaper printed in vernacular language, it would not serve the purpose - Notice has to be published in vernacular language in the newspaper published in vernacular language - Held, all proceedings being in flagrant violation of the statutory provisions are liable to be quashed - Direction issued.

       The Tribunal and DRAT have mis-directed themselves without entering into the legal issues, particularly the requirement and compliance of statutory provi¬sions as non compliance thereof would vitiate the entire proceed¬ings. It seems to be highly arbitrary and unreasonable that for the recovery of a sum of amount about Rs. 4 lakhs a property had been sold for Rs.14 lakhs and after adjusting its outstanding dues a sum of rupees more than double of their outstanding dues had been remitted to the petitioners. The petitioners did not accept the amount and returned the same to the Bank. The recovery proceedings had definitely not been made complying with the statutory provisions. Non-compliance of such statutory provisions tantamount to fundamental procedural defects which enables the Court to set aside the confirmed sale even after issuance of sale certificate.

       Non-compliance of statutory requirements of publication of possession notice and auction notice in vernacular language rendered the statutory requirement as farce. There should be purposeful compliance of the provisions of law and it cannot be reduced to an empty formality. The requirement to cause publica¬tion in “vernacular language” in the newspaper is fundamental and the statutory requirement which cannot be compromised. It is not for the borrower or guarantor to establish that non-publication of the said notices in “vernacular language” in the newspaper has caused any prejudice to its cause. It is for the respondents to establish that non compliance of the statutory requirements has not caused any prejudice at all. Proof of prejudice is unneces¬sary where requirement of statutory provision is mandatory. “It till comes from a person who has denied justice that the person who has been denied justice is not prejudiced.” (Paras - 66 to 76)

       2. SECURITY INTEREST (ENFORCEMENT) RULES, 2002 - Rules 8, 9 - "Possession notice" is mandatorily required to be published in two leading newspapers - Authority to decide as to whether the property is to be sold as a whole or in part and accordingly reserve price is to be fixed - It further provides the various modes of alienation of the property - Notice of sale is to be served upon the borrower. (Para - 10)

       3. PUBLIC MONEY - Recovery of - Public money should be recovered and recovery should be made expeditiously - Authority must ensure compliance of the statutory provisions.

       It becomes an legal obligation on the part of the authority that property be sold in such a manner that it may fetch the best price. Thus essential ingredients of such sale remain a correct valuation report and fixing the reserve price. In case proper valuation has not been made and the reserve price is fixed taking into consideration the inaccurate valuation report the intending buyers may not come forward treating the property as not worth purchase by them. As a moneyed person or a big businessman may not like to involve himself in small sales/deals. (Paras - 11 to 16)

       4. WORDS AND PHRASES - "Value" - It means intrinsic worth or cost or price for sale of a thing/property. (Para - 17)

       5. MAXIM - "Expressio unius est exclusio alterius" - If a statute provides for a thing to be done in a particular, then it has to be done in that manner and in no other manner and following other course is not permissible. (Para - 38)

       6. MAXIM - "Sublato fundamento cedit opus" - In case a foundation is removed, the superstructure falls - If initial action is not in consonance with law, the subsequent proceedings would not sanctify the same. (Para - 39)

       7. WRIT - Jurisdiction - It is discretionary in nature and must be exercised in furtherance of justice - Court has to keep in mind that its order should not defeat the interest of justice nor it should permit an order to secure dishonest advantage or perpetuate an unjust gain or approve an order which has been passed in contravention of the statutory provisions. (Para - 41)

       8. STATUTE - When the action of the state or its instrumentalities is not as per the rules or regulations and supported by the statute, the Court must exercise its jurisdiction to declare such an act to be illegal and invalid.

       Whenever any action of the authority is in viola¬tion of the provisions of the statute or the action is constitu¬tionally illegal, it cannot claim any sanctity in law, and there is no obligation on the part of the Court to sanctify such an illegal act. Wherever the statutory provision is ignored, the Court cannot become a silent spectator to such an illegality, and it becomes the solemn duty of the Court to deal with the persons violating the law with heavy hands.

       The legal position remains that every statutory provision requires strict adherence, for the reason that the statute creates rights in favour of the citizens, and if any order is passed de hors the same, it cannot be held to be a valid order and cannot be enforced. As the statutory provision creates legal rights and obligations for individuals, the statutory authorities are under a legal obligation to give strict adherence to the same and cannot pass an order in contravention thereof, treating the same to be merely decoration pieces. (Paras - 46, 54 and 55)