CM(M) 684/2021

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$~19

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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

Date of decision: 29^th October, 2021

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CM(M) 684/2021 & CM No.35081/2021 (for Stay), CM

No.38650/2021 (delay of 2 days in filing rejoinder)

FRANCO LEONE LIMITED AND ORS

..... Petitioners

Through:

Mr. Kirti Uppal, Senior Advocate

with Mr. Sidharth Chopra, Mr.

Navneet, Mr. Aditya Awasthi and Ms.

Riya Gulati, Advocates.

versus

PUNJAB AND SIND BANK

..... Respondent

Through:

Ms. Seema Gupta, Advocate.

CORAM:

HON'BLE MR. JUSTICE AMIT BANSAL

[VIA VIDEO CONFERENCING]

AMIT BANSAL, J. (Oral)

1.

The present petition under Article 227 of the Constitution of India

impugns the auction notice dated 1^st September, 2021 and consequential

proceedings

emanating

therefrom

under

the

Securitisation

and

Reconstruction of Financial Assets and Enforcement of Security Interest

Act, 2002 (SARFAESI Act).

2. Brief facts leading up to the filing of the present petition are that the

petitioner no.1 (petitioner company), of which petitioners no. 2 to 4 are

directors, availed various credit facilities from the respondent bank. To avail

such credit facilities, the petitioner company had mortgaged 12 properties

2021:DHC:3470

CM(M) 684/2021

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with the respondent bank. On 31^st March, 2018, the account of the petitioner

company was declared to be Non Performing Asset (NPA) and a demand

notice dated 5^th May, 2018 was issued to the petitioners by the respondent

bank under Section 13(2) of the SARFAESI Act, calling upon the petitioners

to make payment of Rs.46,13,45,410.39/-. The petitioners, from 26^th

October, 2018 to 31^st February, 2020, sought permission of the respondent

bank to sell a few of the properties to repay their dues. Finally, on

24^th February, 2021, the petitioners proposed a One Time Settlement (OTS)

payment of Rs.30,00,00,000/- in respect of their dues. In the meanwhile,

consequent to the respondent bank taking steps under Section 13(4) of the

SARFAESI Act to take possession of the mortgaged properties, the

petitioners, vide letter dated 29^th November, 2018, handed over possession

of property bearing no. 11786/6, Ground Floor, Sat Nagar, Karol Bagh, New

Delhi-110005. Vide letter dated 23^rd August, 2021, the respondent bank

requested the petitioners to improve their OTS proposal to match it with the

Recovery Management Policy of the bank. In response to the letter by the

respondent bank, the petitioners requested a copy of the bank policy to

improve their offer, however, the respondent bank issued the impugned

auction notice dated 1^st September, 2021 to sell 8 out of the 12 mortgaged

properties of the petitioners.

3. The present auction notice was challenged by the petitioner by way of

filing a Securitization Application, being SA No.119/2021 before the Debts

Recovery Tribunal-II (DRT) on 24^th September, 2021. Notice on the said

application was issued to the bank, returnable for 27^th September, 2021. On

27^th September, 2021, the Presiding Officer was on leave and the matter was

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CM(M) 684/2021

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adjourned to 1^st October, 2021. The term of the Presiding Officer ended on

30^th September, 2021.

4. Since there was no Presiding Officer available on 1^st October, 2021,

the petitioner filed the present petition. The petition was listed before this

Court on 5^th October, 2021, when it was adjourned for 6^th October, 2021, for

parties to verify whether or not the DRT has a Presiding Officer to hear the

aforesaid SA, when both the parties confirmed that currently there is no

Presiding Officer at any of the Debt Recovery Tribunals in Delhi.

5. Notice was issued in the present petition on 06^th October, 2021 and it

was directed t