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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 2^ND DAY OF FEBRUARY, 2021

PRESENT

THE HON’BLE MRS.JUSTICE B.V.NAGARATHNA

AND

THE HON’BLE MRS.JUSTICE M.G.UMA

W.A.No.262 OF 2020 (GM – DRT)

BETWEEN:

THE AUTHORISED OFFICER,

BANK OF MAHARASHTRA,

ASSET RECOVERY BRANCH,

13, PAXAL TOWERS, KR ROAD,

OPP:VANIVILAS HOSPITAL,

BENGALURU – 560 002.

REPRESENTED BY ASSISTANT GENERAL

MANAGER MR.RAVINDRA SONJE.

… APPELLANT

(BY SRI. VIGNESH SHETTY, ADVOCATE)

AND:

S.N.MAHADEVA,

AGED ABOUT 53 YEARS,

S/O LATE NAGAPPA,

RESIDING AT NO.207,

2^ND MAIN ROAD, SINGASANDRA,

HOSUR ROAD,

BENGALURU – 560 068. … RESPONDENT

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THIS APPEAL IS FILED UNDER SECTION 4 OF THE

KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE

THE ORDER DATED 17.02.2020 PASSED BY THE

LEARNED SINGLE JUDGE OF THIS HON’BLE COURT IN

W.P.NO.2958/2020.

THIS APPEAL COMING ON FOR PRELIMINARY

HEARING THIS DAY, NAGARATHNA, J., DELIVERED THE

FOLLOWING:

JUDGMENT

1.

The legality and correctness of the interim order

dated 17.02.2020 passed in W.P.No.2958/2020 by the

learned Single Judge is questioned in this appeal. By the

said interim order, the learned Single Judge permitted

the writ petitioner to participate in the auction and

ordered that the amount of Rs.2,14,92,880/- deposited

by the writ petitioner on 05.10.2018 to be treated as

earnest money deposit, subject to further orders to be

passed by this Court. Being aggrieved by the same, the

Bank has preferred this appeal.

2.

We have heard the learned counsel for the

appellant/Bank at length and perused the material on

record.

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3.

Briefly stated, the facts are that the appellant/Bank

issued a public notice for sale of the scheduled property.

Writ Petitioner was the highest bidder. He deposited a

sum of Rs.2,14,92,880/- being 25% of the total bid

amount which was Rs.8,59,71,520/-. He was supposed

to pay the balance amount within a period of 15 days

from the date of auction (05.10.2018) i.e., on or before

19.10.2018. However, petitioner sought for extension of

time and the same was granted as per Sub-rule (4) of

Rule 9 of the Security Interest (Enforcement) Rules,

2002 (for short, hereinafter referred to as ‘2002 Rules’),

inasmuch as time was granted till 31.03.2019 being a

further period of three months. Admittedly, petitioner

did not deposit the balance bid amount by then.

Consequently,

annexure-C

–

communication

dated

31.03.2019 was issued to the petitioner stating that the

amount of Rs.2,14,92,880/- deposited by him towards

the earnest money deposit had been adjusted to the

appropriate account and the amount stood forfeited. It

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was also stated that the auction purchaser/writ petitioner

had no charge or right over the property sought to be

auctioned and the bank reserved its right to put the

property for auction as it deemed fit. Being aggrieved

by

the

said

communication,

petitioner

preferred

S.A.No.203/2019 before the Debts Recovery Tribunal

(for short, hereinafter referred to as ‘the DRT’). By

order dated 18.12.2019, the DRT dismissed the said

appeal. Being aggrieved by the same, writ petition was

filed in which, the impugned interim order was passed,

permitting the writ petitioner to participate in the auction

to

be

scheduled

and

to

treat

the

amount

of

Rs.2,14,92,880/- deposited by him on 05.10.2018 as

earnest money deposit. Being aggrieved by the same,

the Bank has preferred this appeal.

4.

Learned counsel for the appellant/Bank drew our

attention to Sub-rule (4) Rule 9 of 2002 Rules and

submitted that a time frame given under the said Rule,

being 15 days, for the deposit of the balance purchase

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price or bid amount prior to confirmation of sale, in case,

the said amount is not deposited within the said time

frame, time could be extended, but not beyond three

months. That in the instant case, extension of time was

granted for a period of three months and even then, the

petitione