The extended period for payment after an auction sale should exclude the duration of any stay order, and the threat of forfeiture of deposit should consider the impact of any stay order.

ORDER :

Ujjal Bhuyan, J.

Heard Mr. A.P. Reddy, learned counsel for the petitioner; Mr. B.Mukherjee, learned counsel appearing on behalf of Mr. N.Rajeshwar Rao, learned Assistant Solicitor General for respondent No.1-Union of India; and Mr. G.Prabhakar Sarma, learned counsel for respondent No.2-State Bank of India.

2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of letter dated 25.03.2022 issued by the 2nd respondent and also seeks a direction to the said respondent to accept the balance 75% of the sale price.

3. Case of the petitioner is that respondent No.2 had conducted auction sale of the schedule property on 28.12.2021. Details of the schedule property are mentioned in paragraph 3 of the writ affidavit, which are as under:

“land admeasuring Ac. 3-00 Guntas in Sy. No. 182 and Ac. 2-15 Guntas in Sy. No. 183 total admeasuring Ac. 5-15 Guntas of Kondurgu Village and Mandal, Mahboobnagar District”

4. The auction sale was conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly referred to hereinafter as the ‘SARFAESI Act’) for failure of the borrowers to repay the loan amount.

5. Petitioner participated in the auction and became the highest bidder at its bid value of Rs.5,32,00,000.00. Accordingly, petitioner was declared as the successful bidder by respondent No.2, following which petitioner remitted 25% of the sale price to respondent No.2. Respondent No.2 advised the petitioner to deposit the balance 75% within 15 days of auction sale.

6. Petitioner requested respondent No.2 for extension of time for paying the balance 75%. It is stated that 2nd respondent accepted the request of the petitioner and extended the time for payment of the balance 75% of the sale price till 27.03.2022.

7. In the meanwhile, the borrowers i.e., respondent Nos.3 to 5 had filed a writ petition before this Court being W.P.No.1005 of 2022 seeking quashing of E-auction sale notice dated 13.12.2021, whereby auction was proposed on 28.12.2021. After hearing learned counsel for the parties, this Court vide order dated 07.01.2022 declined to grant relief to the petitioners (borrowers), but granted liberty to approach the jurisdictional Debts Recovery Tribunal under Section 17 of the SARFAESI Act.

8. Four days thereafter, the borrowers again moved this Court during vacation by filing W.P.No.1991 of 2022 seeking the same relief. Vacation Bench passed an order on 12.01.2022 granting interim stay subject to petitioners (borrowers) depositing Rs.85 lakhs within six weeks. However, during the hearing on 06.04.2022, it transpired that the aforesaid amount was not deposited by the borrowers despite order of this Court. This Court by a detailed order dated 06.04.2022 held that petitioners (borrowers) had suppressed material facts and had also not complied with the order of the Court. It was observed that repeated filing of writ petitions by the petitioners (borrowers) was nothing but an attempt to frustrate attempt of the secured creditor from realizing its outstanding dues. Relevant portion of the order dated 06.04.2022 is extracted hereunder:

“16. We have carefully gone through the averments made in the supporting affidavit. We find that the above facts relating to filing of repeated writ petitions by the petitioners have not been mentioned. There is thus clear suppression of material facts. This Court had earlier taken the view while dismissing Writ Petition No.29242 of 2021 filed by petitioner No.1 that it was nothing but an abuse of the process of the Court and had imposed costs of Rs.2,000/-. Petitioners have not only suppressed material facts but have also not complied with the order of this Court dated 02.07.2020 in W.P.No.9508 of 2020 filed by petitioner No.1 whereby petitioner No.1 was directed to pay 25% of the outstanding dues by the end of July, 2020 and balance 75% of the outstanding dues by the end of August, 2020. Admittedly, petitioner