DEBTS RECOVERY APPELLATE TRIBUNAL, DELHI

Appeal No.72/2020

(Arising out of S.A. No. 148/2017 decided by DRT-II, Delhi)

Grandstar Realty Pvt. Ltd.

&..Appellant

Vs.

1. YES Bank

2. AKME Project Ltd.(represented by Resolution Professional

appointed bY NCLT)

&.Respondents

Dated:07.06.2021

CORAM. Mr. Justice P.K. Bhasin, Chairperson

Appearances:

Mr. Rajiv Nayyar, Senior advocate with Mr. Saket Sikri, Mr. Nikhil

Singhvi and Mr. Mohit Seth,advocates for the appellant.

Mr. Sanjiv Kakra, Sr. advocate with Mr. Neeraj Yadav, Mr. Sidhartha

Arora & Ms. Aditi Sharma, advocates for respondent no.1 bank

Mr. Muneesh Malhotra, Sr. advocate with Mr. Vikram V Minhas,

advocate for respondent no.2 AKME through resolution professional

ORDER

The appellant Company is the auction purchaser of an unfinished

residential complex which was being constructed by respondent no. 2

herein but had failed to complete the project within the period of

licence granted to it by DTCP(Director of Town and Country Planning,

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Appeal No. 72/2020

Haryana). This builder/developer had taken loan of crores of rupees

from Yes Bank, respondent no.1 herein, and for securing the re-

payment of the loan money it had created equitable mortgage of the

residential complex in Manesar area in Haryana .The said borrower

Company, however, defaulted in repayment of the loan money as per

the terms and conditions of sanction of loan and because of the default

in re-payment of bank9s dues its account was declared as a Non

Performing Asset(NPA). Respondent bank then served a demand notice

under Section 13(2) of SARFAESI Act upon its defaulter borrower,

respondent no.2 herein, demanding payment of Rs. 45,41,49,331.61

but since the Company did not clear the dues of the bank as demanded

the bank in exercise of its powers under Section 13(4) of SARFAESI Act

took possession of the unfinished residential project for being sold by

public auction in order to recover its outstanding dues from its

defaulter-borrower. In due course, the property was auctioned and the

same was purchased by the appellant herein who was the sole

participant in the auction. The property was purchased by it for forty

crores and seventyfive lacs. After paying the full amount of the auction

money the bank executed necessary documents of transfer of title in

favour of the appellant herein and possession was also delivered to it.

Those documents included sale certificate dated 19.07.2016.

2. The borrower Company, respondent no.2 herein which is now

before NCLT and a resolution professional also stands appointed, felt

aggrieved by the auction sale of the property in question in favour of

the appellant herein and in order to challenge that auction sale it filed a

securitization application(S.A.) under Section 17(1) of SARFAESI Act

before the Tribunal below(DRT). In that S.A. the present appellant was

also impleaded being the auction purchaser of the mortgaged property.

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Appeal No. 72/2020

The S.A. was contested by Yes Bank as well as the present appellant-

auction purchaser both of whom claimed that there was no illegality in

the auction sale conducted by Yes Bank.

3. However, subsequently in the year 2019 the appellant-auction

purchaser moved an application before the DRT in the S.A. of the

borrower, respondent no.2 herein, for cancelling the auction sale in its

favour claiming, inter alia, that it had been defrauded by Yes Bank into

buying the projected in question in order to recover its dues from its

defaulter borrower, respondent no.2 herein.

4. The learned DRT, however, dismissed the S.A. of the respondent

no.2 as also the application of the appellant-auction purchaser for

cancellation of the auction sale and return of auction money to it vide

common order which is now under challenge at the instance of the

auction purchaser.

5. The relevant facts have been noticed in detail by DRT in the

impugned o