The Court emphasized that the sale confirmation letter could not have been issued before the expiry of the stay order and held that the petitioner should not be burdened with additional interest or payment of any further amount.

ORDER :

Ujjal Bhuyan, J.

Heard Mr.C.V.Mohan Reddy, learned senior counsel representing Mr. Ch.Siva Reddy, learned counsel for the petitioner and Dr. K.Lakshmi Narasimha, learned counsel for respondent No.1.

2. By filing this writ petition under Article 226 of the Constitution of India, petitioner seeks a direction to respondent No.1 to issue confirmation of sale after withdrawing letters dated 08.10.2020 as well as 13.10.2020.

3. Case of the petitioner is that petitioner is engaged in software business with interest to make investment in real estate. Respondent No.1 issued e-auction sale notice dated 22.01.2020 for sale of the schedule properties. It may be mentioned that the schedule properties were furnished as security for the loans availed of by respondent No.2. As respondent No.2 committed default in repayment of loan, respondent No.1 invoked provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly ‘the SARFAESI Act’ hereinafter) and consequently issued the e-auction sale notice. There were three schedule properties i.e. Lot ‘A’, Lot ‘B’ and Lot ‘C’.

4. Petitioner was interested in Lot ‘A’ property for which the reserve price was fixed at Rs.7,21,82,000-00 and Earnest Money Deposit (EMD) was fixed at Rs.72,25,000-00.

5. As per the condition in the e-auction sale notice, petitioner deposited the EMD of Rs.72,25,000-00 on 24.02.2020 and participated in the online auction on 27.02.2020. Petitioner was declared as the highest bidder in respect of Lot ‘A’ property at his bid amount of Rs.9,17,57,000-00. Accordingly, petitioner’s bid was accepted and was declared as the successful bidder for Lot ‘A’ schedule property. In terms of the conditions of sale, petitioner deposited Rs.1,57,14,250-00 on 28.02.2020 which together with the EMD of Rs.72,25,000-00 deposited on 24.02.2020 amounted to 25% of the bid amount i.e. Rs.2,29,39,250-00.

6. Petitioner was waiting for the letter of confirmation of sale as he was informed that he would have to pay the balance 75% of the sale price within 15 days of receipt of the letter of confirmation of sale.

7. According to the petitioner, despite payment of 25% of the sale price, he did not receive letter of confirmation. When he enquired with the first respondent about the delay in issuing the letter of confirmation of sale, petitioner was informed that respondent No.2 had filed Securitization Application No.37 of 2020 before the Debts Recovery Tribunal-I, Hyderabad (Tribunal) wherein it had obtained an order dated 25.02.2020 staying confirmation of sale subject to depositing 15% of the total outstanding dues in three installments. Bank had informed the petitioner that respondent No.2 had paid Rs.1,74,42,408-00 being the first installment in terms of order dated 25.02.2020 passed by the Tribunal and that the sale would be confirmed if respondent No.2 committed default in payment of the other two installments.

8. Petitioner has stated that he has not been informed about the developments in respect of S.A.No.37 of 2020 filed by the second respondent. However, petitioner continued to approach respondent No.1 for issuance of sale confirmation to enable him to pay the balance sale price. However, respondent No.1 never informed the petitioner of any such development. On the contrary, respondent No.1 issued a letter dated 29.08.2020 alleging that on 27.03.2020 sale confirmation was sent to the petitioner but petitioner did not comply with the condition of payment of 75% of sale price within 15 days of receipt of the said letter dated 27.03.2020. Therefore, the amount already paid by the petitioner would be forfeited.

9. Petitioner replied on 10.09.2020 stating that he had not received any letter from respondent No.1, much less, the letter dated 27.03.2020 and that he was ready to pay the balance sale price of 75% within 15 days of receipt of the letter of sale confirmation. Respondent No.1 was requested to withdraw the letter dated 29.08.2020.

1