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In the High Court of Punjab and Haryana at Chandigarh

.....

CWP No.6402 of 2019 (O&M)

.....

Date of Decision:23.12.2021

M/s Pal Alloys & Metal India Private Limited and others .....Petitioners

Vs.

Allahabad Bank and others

.....Respondents

.....

Coram:

Hon'ble Mr. Justice M.S. Ramachandra Rao

Hon'ble Mr. Justice Jasjit Singh Bedi

.....

Present:

Mr. Aalok Jagga, Advocate with Mr. Sumit Verma, Mr. H.S.

Jagdev and Ms. Deepshikha Gupta, Advocates for the

petitioners.

Mr. I.P. Singh, Advocate for respondent No.1-Bank.

Mr. Ranjit Chawla, Advocate for respondents No.2 and 3.

Mr. Rajinder Singh, Advocate for respondents No.4 to 6.

.....

M.S. Ramachandra Rao, J.

The background facts

Petitioner No.1 is the Company and petitioners No.2 and 3 are its

Directors.

Petitioner No.1 had availed certain credit facilities from the

Allahabad Bank (respondent No.1) and petitioners No.2 and 3 stood its

guarantors. The residential House No.758, Sector 14, Urban Estate,

Faridabad of petitioner Nos. 2 and 3 was mortgaged to the respondent-Bank

alongwith hypothecation of stock, plant and machinery.

The loan account of petitioner No.1 was classified as a Non-

Performing Assets ( for short – 'NPA') on 31.10.2017.

HARPAL SINGH PARMAR

2021.12.23 17:09

I attest to the accuracy and

integrity of this document

CWP No.6402 of 2019 (O&M)

[2]

Thereafter, respondent-Bank issued notice dt. 23.11.2017 under

Section 13(2) of the Securitization and Reconstruction of Financial Assets

and Enforcement of Security Interests Act, 2002 (hereinafter referred to as

'SARFAESI Act') demanding payment of `2,62,98,047.72.

The respondent-Bank filed an application under Section 14 of the

SARFAESI Act before the District Magistrate, Faridabad. On 14.06.2018,

the said application was allowed and the respondent-Bank was permitted to

take physical possession of the residential house of the petitioners.

Since the possession was not being delivered, the respondent-Bank

filed CWP No.565 of 2019 before this Court impleading the petitioners

herein as respondents No.3 to 5.

Notice of motion was issued for 15.02.2019 by this Court.

But on 14.02.2019, the officials of the respondent-Bank along

with the Tehsildar, Faridabad, went to the residential house of the

petitioners to take possession. At that time, the 2^nd petitioner gave a letter

dt.14.2.2019 to Tehsildar, Faridabad that he will himself give possession of

the property within 15 days and undertook to repay whole amount due to

respondent-Bank within 90 days.

But the possession of the property was taken by the respondent-Bank

on 14.02.2019 in spite of the said letter.

In CWP No.565 of 2019, the 2^nd petitioner filed an affidavit of

undertaking (Annexure-P.3) to clear outstanding amount within 3 months

from 15.02.2019 and sought restoration of the house of the petitioners. He

also undertook to deposit `70 Lacs within one month and rest of the amount

HARPAL SINGH PARMAR

2021.12.23 17:09

I attest to the accuracy and

integrity of this document

CWP No.6402 of 2019 (O&M)

[3]

within 3 months. He stated that if he has not been able to clear the

outstanding dues within 3 months, he would vacate the residential house

and hand over peaceful vacant possession to the authorized officer of the

respondent-Bank. The same was taken on record on 15.02.2019.

Matter was adjourned to 25.02.2019

On 25.02.2019, the 2^nd petitioner appeared before this Court, and to

show petitioners' bona fides, produced two demand drafts of `25 Lacs each

(Total `50 Lacs) before this Court and they were handed over to the counsel

representing the respondent-Bank.

By that time, auction notice dt. 22.02.2019 (Annexure-P.5) was issued

by the respondent-Bank proposing to sell residential property of the

petitioners fixing the date of auction as 28.03.2019.

The present Writ Petition

Petitioners then filed the present Writ Petition to quash the auction

notice dt. 22.02.2019 (Annexure-P.5).

They contend