Aman Collections And Ors. vs Corporation Bank

J.M. Malik, J

This order shall dispose of this appeal preferred in respect of the order dated 10.5.2011 rendered by the learned Trial Court. In the impugned order, the learned Trial Court permitted inter se bidding by Mr. Annat Jain and Mr. Vishnu Kant. The Counsel for the appellants has called into question the said order. Adumbrated in brief, the facts of this case are these. Earlier, an appeal was preferred against an interim order dated 3.3.2011 passed by the learned Trial Court. Vide order dated 4.3.2011, I admitted the appeal and made the following order:

Counsel for the parties present. The Counsel for the appellant submits that the appellant is unable to pay Rs. 50 lakh by 7.3.2011. According to the Counsel for the respondent Bank, the outstanding against the appellant is about Rs. 7 crore as on date.

I see no illegality or infirmity in the order of the Trial Court. That order to the extent of deposit of Rs. 50 lakh is upheld. Subject to that condition, the appeal stands admitted. The said amount be deposited by 7.3.2011 as directed by the learned Trial Court.

Counter affidavit be filed within two weeks. Case to come up on 22.3.2011. In case the appellant fails to deposit the amount as directed, the sale proceedings may go on but the sale may not be confirmed till 22.3.2011.

Thereafter, the case was adjourned for 7.3.2011. The request made by the appellants to stay the sale was declined, but liberty was given to the appellants to produce a better buyer on 22.3.2011. On 22.3.2011 Mr. Rajeeve Mehra, Sr. Advocate made a statement that the case would be settled between the parties. Though the appeal had become infructuous, as the Counsel for the appellants, instead of withdrawing it, wanted more time to settle the matter, some more time was given to the appellants till 25.3.2011. On 25.3.2011, the Counsel for the appellants submitted that he had brought a better buyer who would deposit Rs. 50 lakh by way of Bank Draft. It was also brought to the notice of the Court that Mr. Annat Jain was buying the property and would try to settle the matter with the Bank. Mr. Annat Jain wanted to deposit Rs. 50 lakh by demand draft. It was also offered that Mr. Annat Jain would pay a total consideration of Rs. 4.05 crores including the aboves aid Rs. 50 lakh. I had also directed that if the Bank has got a better buyer and is not interested to sell the property to Mr. Annat Jain, the Bank can take possession of the property and sell it as per law. All these facts were kept open. I directed Mr. Annat Jain to deposit Rs. 50 lakh till 11 a.m. on 26.3.2011, failing which the Bank was not precluded from taking over the possession of the property in dispute. The case was sent back to the learned Trial Court for further proceedings and the appeal stood disposed of.

Vide letter dated 26.3.2011 sent by Corporation Bank to M/s. Aman Collections, the borrower, the Bank offered it to release the title deeds of the property bearing No. S-244 (Basement and Ground floor) mortgaged in respect of loan sanctioned to it subject to payment of Rs. 450 lakh towards its various loan accounts. The said amount was to be deposited with the Bank on or before 31.3.2011. M/s. Aman Collections could not deposit the rest of amount till 31.3.2011. The learned Counsel for the appellants vehemently argued that the time granted by the Bank was too short.

In the meantime, one Mr. Vishnu Kant sent a letter to Corporation Bank wherein he offered to purchase the said property. Vide his letter dated 8.3.2011, he sent Rs. 1,25,00,000/- through Bank draft and bid amount was mentioned as Rs. 4,50,00,000/-, but the Bank rejected it. Thereafter, Mr. Vishnu Kant approached the learned Trial Court.

Under the circumstances, the learned Trial Court directed inter se bidding by the above said parties.

I have heard the Counsel for the parties. The Counsel for the appellants vehemently argued that the above said order was passed in contravention of the direction given by this Court. Again, the DRAT had asked the learned Trial Court to hear three parties only, namely, creditor, borrower and Mr. Annat Jain. Mr. Vishnu Kant is a rank stranger. Again, it is not understood as to how he has given offer and how the learned Trial Court is going to accept the same.

I see no merit in this argument. I have clearly, specifically and unequivocally stated that the offer made by any better buyer brought by the Bank as well as by the borrower can be considered. Mr. Vishnu Kant is giving equivalent offer and does not understand as to why his case should not be considered. The auction in question failed on 8.3.2011 due to some infirmity on the part of Mr. Vishnu Kant.

I have heard the Counsel for Mr. Vishnu Kant. He says that his client is ready to pay Rs. 5 crores and that his client can go up to Rs. 5.50 crores in case he gets the possession. He also submitted that in case the appellants were ready to pay so much money in three days, he would withdraw from the bid and the property may be sold to the better buyer brought by the appellant. Under these circumstances, I see no illegality or infirmity in the order passed by the learned Trial Court. The appeal is liable to be rejected. The order passed by the learned Trial Court is correct. However, in view of the circumstances detailed above, any of the parties can make request to the learned Trial Court that another attempt be made to dispose of the property as per law, i.e., through proper auction. It may fetch more money to the Bank. In case the borrowers are not able to pay off the entire loan, efforts should be made to take physical possession of the property as per law, because it is well known fact that if the property is vacant and can be handed over to the successful bidder immediately after he deposits the offered amount, it will fetch better price for the property. The Counsel for Mr. Vishnu Kant vehemently argued that he is ready to pay Rs. 5.50 crores in case he is able to get possession of the property immediately. For these reasons, I do not find any force in the appeal and, therefore, it is dismissed in limine.

Before parting, it must be mentioned that I have heard the Counsel for the parties on the question of admission of this case. The Counsel for the respondent Bank vehemently argued that before admitting and hearing the appeal on merits, the appellants be asked to comply with the pre-condition of deposit under Section 18 of the SRFAESI Act. In support of his contention, he has cited a few authorities. The first one is M/s. Vijay Containers Sr P. Ltd. & Ors. v. AXIS Bank, 2009 (4) Bom.C.R. 734, wherein it was held that the requirement of pre-deposit under Section 18 of the Act stand attracted when the order is challenged in an appeal before the Appellate Tribunal, which is not even a final order under Section 17, but is an interlocutory order. Aggrieved by that order, the borrower had approached the Hon'ble Supreme Court and the Hon'ble Supreme Court vide its order dated 7.1.2011 dismissed the SLP, meaning thereby the order passed by the Hon'ble Bombay High Court was upheld. However, since 1 am not admitting this appeal for the said purpose, therefore; these authorities are not being considered.

The appeal stands disposed of.

The parties are directed to appear before the learned trial Court on 1.8.2011. Copies of this order be furnished to the parties as per law and another copy be sent to the learned DRT.