Failure to comply with mandatory statutory provisions requiring the immediate deposit of a percentage of the auction sale price results in the forfeiture of the purchaser's claims. Such failures cannot be waived, and writ jurisdiction is not an appropriate substitute for established alternative statutory remedies.

JUDGMENT :

Bhaskar Raj Pradhan, J.

The moot question

1. The question that falls for determination is whether the writ petition filed in the year 2020 by the auction purchaser who had participated in an auction sale of the immovable property of the secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act) in the year 2011 but failed to pay the deposit of 25% of the sale price as required under Rule 9(3) or pay the balance within the time frame under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 (the SI Rules), should be allowed?

The parties

2. Meena Jha (the petitioner) was the auction purchaser who has sought to invoke the writ jurisdiction of this Court against the State Bank of India (respondent no.1) the secured creditor, its Chief Manager-cum-Branch Manager (respondent no.2), the Recovery Officer-I, Debts Recovery Tribunal (respondent no.3), Akhileshwar Prasad (respondent no.4)-the borrower, his wife Laxmi Devi (respondent no.5), the District Collector (respondent no.6) and the State of Sikkim (respondent no.7).

Facts

3. Before this Court examines the legal issues arising in the present writ petition it would be important to set out the relevant sequence of events:

(i) On 26.11.2007 the respondent no.4 was sanctioned a housing loan by the respondent no.1. The property was mortgaged with the respondent no.1. The property was in fact a leasehold property owned by one Shirshak Gurung. The lease deed dated 29.03.2008 granted lease of the property to the respondent no.4 as the lessee. The lease deed permitted mortgage of the property and allowed the respondent no.4 to avail loan from any bank/financial institution on the condition that the respondent no.4 shall repay such loan. It further permitted the respondent no.4 to transfer/mortgage the property i.e. the land and the building constructed thereon. The lease deed specifically provided that if the respondent no.4 failed to repay the loan with interest the same could be recovered by disposal of the property and in such an event even the lessor shall not raise any objection at all.

(ii) The respondent no.4 failed to repay the loan and the respondent no.1 initiated recovery measures under the SARFAESI Act. O.A. No.144 of 2010 was filed by the respondent no.1 against the respondent no.4 and others before the Debts Recovery Tribunal.

(iii) The petitioner participated in the auction sale conducted by the respondent no.1 for sale of the property of the respondent no.4 vide notice published on 09.09.2011. The petitioner was declared the successful bidder in the auction which was held on 13.10.2011.

(iv) The petitioner deposited the earnest amount of Rs.6,50,000/- vide bank draft No.701975 dated 11.10.2011 which was not encashed.

(v) However, admittedly the petitioner did not pay the deposit of 25% of the amount of sale price immediately as required by Rule 9(3) of the SI Rules. The balance amount of sale price payable which was to be paid on or before the 15^th day of confirmation of the sale of the property was also not paid. Instead on 24.10.2011 the petitioner addressed a letter to the Assistant General Manager of respondent no.1 seeking further time of one month to deposit the remaining money. According to the respondent no.1 time was not granted. On this letter there is a hand written endorsement