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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M. S. Sahoo, JJ.
M/s. Sr Distillery Pvt. Ltd., Cuttack & Anr. – Appellants
Versus
Deputy General Manager, Punjab National Bank, Circle Office, Master Canteen Road, Bhubaneswar, Districtkhurda & Anr. – Respondents
Writ Petition (C) No. 17292 of 2022
Decided On : 17-01-2023
Defaulting Borrower - Auction Sale of Mortgaged Properties - The court dismissed the writ petition filed by the defaulting borrower challenging the auction sale of mortgaged properties for recovery of outstanding liability, as the auction had already been successfully conducted and the sale certificate issued to the auction purchaser.
Fact of the Case:
The petitioner, a defaulting borrower, challenged the Sale Notice issued by the bank for auction sale of mortgaged properties for recovery of outstanding liability.
Finding of the Court:
The court dismissed the writ petition as infructuous, as the auction of the mortgaged properties had already been successfully conducted and the sale certificate issued to the auction purchaser. The petitioner was granted permission to withdraw the writ petition to seek available remedies before the DRT.
Issues: Challenge to Sale Notice, Auction of Mortgaged Properties, Outstanding Liability, Permission to Withdraw Writ Petition
Ratio Decidendi: The court found that the auction of the mortgaged properties had been successfully conducted and the sale certificate issued, rendering the writ petition infructuous. The petitioner was granted permission to withdraw the writ petition to pursue available remedies before the DRT.
Final Decision: The writ petition stands dismissed as withdrawn with the liberty for the petitioner to seek available remedies before the DRT.
JUDGMENT
1. The petitioner is a defaulting borrower and has challenged the Sale Notice dated 07.06.2022 issued by the Punjab National Bank, Bhubaneswar/Opposite Party No.1 fixing the auction sale of the two mortgaged properties on 29th June, 2022 for recovery of an outstanding liability of Rs.78,51,36,138.53/-plus unapplied interest, expenses etc.
2. Mr. Biswal, learned counsel for the Bank states that the auction of the mortgaged properties stands successfully conducted on 27th July, 2022 and upon deposit of the entire sale price of Rs.21.10 Crores, the Sale Certificate of the secured assets stands issued in favour of the auction purchaser M/s. Avira Distillery Pvt. Ltd. rendering the present Writ Petition as infructuous.
3. At this stage, learned proxy counsel appearing on behalf of the petitioner files a memo dated 17.01.2023 in Court today (taken on record) praying for permission to withdraw the present Writ Petition to enable the petitioner to seek his available remedies before the DRT in accordance with law.
4. In view of the above, the present Writ Petition stands dismissed as withdrawn with the aforesaid liberty.
The court upheld the validity of the auction sale of mortgaged properties for recovery of outstanding liability and granted the petitioner permission to pursue remedies before the DRT.
The court's decision was based on the property not being sold in the auction, rendering the Writ Petition infructuous.
The remedy for seeking details of the loan account was available to the petitioner by making a proper application before the DRT itself.
The rights of redemption for borrowers are constrained to the publication date of sale notices, according to the statutory regime and relevant case law.
The validity of the sale/e-auction notice under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002.
Delay defeats equity and can render a petition unentertainable, especially in cases where the petitioner was aware of the proceedings but failed to act in a timely manner.
The main legal point established in the judgment is the validity of the award against the petitioner and the direction for the petitioner to seek waiver of penal interest through a fresh representati....
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