Dotline Graphics vs Bank Of Maharashtra And Ors

S. Ravi Kumar, J

This Appeal is preferred against order dated 23.11.2012 in Securitization Application (S.A.) No. 308 of 2010 on the file of Debts Recovery Tribunal No. Ill, Mumbai (D.R.T.). Brief facts leading to this Appeal are as follows.

Appellant herein filed S.A. No. 308 of 2010 challenging measures taken by Respondent Bank under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act). The Tribunal below on consideration of material facts, particularly that the property in dispute was sold in an auction on 10.03.2011 i.e. subsequent to filing of the S.A. and the Appellant did not take steps to challenge that by amending the S.A. and for not impleading the auction purchaser dismissed the S.A. Aggrieved by dismissal of the S.A., present Appeal is preferred.

After filing of this Appeal, Auction Purchaser was impleaded as Respondent No. 2 on the request of Appellant as per order dated 21.08.2013 in M.A. No. 561 of 2013. The Auction Purchaser as Respondent No. 2 filed reply wherein he stated that sale was confirmed as per order dated 29.03.2011 of the Ld. P.O., D.R.T., and the sale proceeds were adjusted towards loan account of Appellant which fact is reflected in the Affidavit dated 22.06.2011 of the Bank filed in the S.A.

Heard both sides.

Advocate for Appellant contended that after filing of the S.A. some arrangements were made between the parties for disposal of the securities and in respect of the property in Flat No. C-301, Satellite Park, C Wing, Building No. 4, Caves Road, Jogeshwari (E), Mumbai-400060, Appellant herein offered Rs. 45 Lakhs as against bid amount of Rs. 42.30 Lakhs and Bank accepted the same but subject to the claim of auction purchaser i.e. second Respondent herein. It is further submitted that the Tribunal below without considering this dismissed the S.A. on the ground that sale was not challenged. It is further submitted that though sale was conducted, Tribunal below passed an order on 29.12.2010 directing the Bank not to confirm the sale and as the same was in operation, therefore, auction purchaser cannot have any right till confirmation of sale.

On the other hand, Advocate for Respondent Bank and Advocate for Auction Purchaser submitted that sale is already confirmed and after that Sale Certificate is issued and registration is also taken place and the possession of the secured property is also handed-over to auction purchaser and the order of the Tribunal below is in accordance with law and that there are no grounds to interfere with the order dated 23.11.2012. It is further submitted that the Bank has never accepted any money for redemption in respect of the property in dispute i.e. Flat No. C-301.

It is not in dispute that symbolic possession was taken on 22.10.2010, whereas demand notice u/s. 13(2) of the SARFAESI Act was issued on 28.04.2010. Appellant filed S.A. on 01.12.2010 and the reliefs claimed in the S.A. are to quash and set aside notices dated 19.10.2010 and 22.10.2010 and to declare the measures taken by the Respondent Bank are not legal. In the S.A. it is also prayed for relief of setting aside the sale, though by that time i.e. on the date of filing of S.A. the property in dispute i.e. Flat No. C-301 was not sold. It is also not in dispute that on 10.03.2011 public auction was conducted in respect of said Flat No. C-301 in pursuance of order dated 29.12.2010 of the Tribunal below in the very same S.A. The only rider in order dated 29.12.2010 is not confirm the sale till further orders. It is evident from record that on 29.03.2011 Tribunal below passed an order giving liberty to the Bank to confirm the sale in respect of Flat No. C-301. From the submissions of Advocate for Appellant, an application is filed to cancel the sale. The Ld. Advocate has drawn my attention to the said application. It is a Miscellaneous Application filed in the same S.A. with relief to set aside the sale and permit the Applicant to deposit a sum of Rs. 42.30 Lakhs being the bid amount. According Advocate for Appellant, this offer of Rs. 42.30 Lakhs is subsequently enhanced to Rs. 45 Lakhs and thereafter to Rs. 48 Lakhs. According to Appellant, the Tribunal below considered the offer of Rs. 48 Lakhs and passed an order on 03.01.2012 directing the Appellant to deposit Rs. 12 Lakhs on or before 05.01.2012. I have perused the order dated 03.01.2012. As the Bank contemplated to take physical possession on 05.01.2012, the Tribunal below passed that order on the condition, that if an amount of Rs. 12 Lakhs is not deposited on or before 05.01.2012, the Bank is at liberty to take physical possession of the property. These are all interim orders and all these interim orders will be merged with the final order and if the final order is against the party in whose favour interim orders are passed, those interim orders will have no effect. It is not on record to show whether Appellant has complied with order dated 03.01.2012 and the physical possession scheduled on 05.01.2012 was actually executed or postponed. The entire argument of Advocate for Appellant is that since the Appellant is ready to redeem, the Tribunal below ought to have accommodated Appellant.

To consider the submission of Ld. Advocate for Appellant, there should be a statutory right providing such relief to the Applicant. Admittedly, measures of sale were under the provisions of the SARAFESAI Act. Section 13(8) of the Act provides a right to the borrower for redeeming the property but that right can be exercised any time before the date of publication of notice for public auction, or inviting quotations, or tender from public, or private treaty for transfer by way of lease, assignment or sale of the secured assets.

Here, admittedly the offer made is long after the sale and when the statutory right is provided only before the sale. Submission of Ld. Advocate for Appellant cannot be accepted.

Advocate for Respondent Bank produced order dated 10.08.2015 in Writ Petition (W.P.) No. 2714 of 2015 (Mr. Dipak Digambar Naik & Ors. V/s. Bank of Maharashtra & Anr.) of the Hon'ble High Court of Judicature at Bombay, wherein the stage at which right of redemption can be availed is answered, by referring to Section 60 of the Transfer of Property Act, 1882. So from the above decision even u/s. 60 of the Transfer of Property Act also the Appellant has no right to ask for redemption once the property was sold and third party rights are created. As rightly pointed by Advocate for Respondent Bank, Appellant has not amended its S.A. by seeking the relief of setting aside the sale dated 10.03.2011 in the pleadings and grounds of challenge of the sale. When the Tribunal below permitted the Bank to confirm the sale by order dated 29.03.2011, that order was not challenged. When the sale is confirmed, Sale Certificate is also issued and property is delivered to the auction purchaser, such action cannot be set aside for mere asking and for mere offer of paying more money than the sale price because that right was available only at the stage indicated in section 13(8) of the Act. So entire argument of Ld. Advocate for Appellant is without any statutory support.

For these reasons, I am of the view that the Tribunal below rightly dismissed the S.A. and that there are no grounds to interfere with order dated 23.11.2012. In view of the same, Appeal is dismissed with costs.

All Miscellaneous Applications, if any, are dismissed as infructuous.