Jasram vs Punjab National Bank

The auction purchaser has filed this appeal against the order passed by the DRT, whereby the application filed by the borrower expressing his willingness to pay the amount on the basis of one-time settlement (OTS) arrived at between him and the Bank has been allowed.

The S.A. was pending adjudication in respect of two plots No. 7M No. 42, Killa No. 8/2 2-0 13/3, 1/17 SIME 20/2, Mathura Road, Faridabad measuring 150 sq. yds. and No.7 B/ A M. No. 8/2, 2-0 13/3 1-17 SIME 20/2, Mathura Road, Faridabad measuring J 50 sq. yds. both measuring in all 300 sq. yds. Two possession notices dated 20.1.2006 were affixed on 28.4.2006 and the entire property was sealed. During the pendency of the S.A., I.A. was moved by the respondent Bank seeking permission to put the property to sale by way of auction. On 31.5.2007, the Tribunal permitted the respondent Bank to proceed with the auction, but directed not to deliver the possession of the auctioned property to the auction purchaser. In this manner, the property was put to sale on 6.6.2007 and was auctioned for a sum of Rs. 23.35 lacs.

After this auction, the applicant Smt. Ramwati expressed her desire to offer a sum of Rs. 26 lacs for the property. This offer was made on 28.2.2008 and in order to show her bonafides she prayed for 10 days' time to deposit the amount which she had offered. In the meantime, she also approached the Bank for one-time settlement, which was arrived at for a sum of Rs. 33 lacs inclusive of Rs. 26 lacs which she had already deposited with the respondent Bank. The balance of Rs. 7 lacs was required to be paid within three months from the date of approval of the OTS. Rs. 5 lacs out of this were deposited with the Bank on 7.3.2009 and Rs. 2 lacs in May, 2009. Since the auction purchaser had also deposited an amount of Rs. 23.35 lacs, it was observed that if the auction was cancelled, then the auction purchaser might make any claim which would be borne by the applicant Smt. Ramwati alone.

This application was opposed by the auction purchaser. Plea was that after the auction of the property, the Bank could not have entered into a settlement with the borrower. It was accordingly prayed that the application be dismissed. On the basis of submissions, the Tribunal below observed that it would have to first decide whether the auction could be cancelled. Noticed that at the very first available opportunity the applicant had moved and had offered more than what the auction price was, and that in order to show bona fides the applicant deposited a sum of Rs. 26 lacs and further amount to complete OTS amount of Rs. 33 lacs, the Tribunal found that it is public money which is at issue and the offer being higher than the auction price, the auction was needed to be cancelled. It was so ordered and the property was released to the mortgagor. In view of the OTS having been accepted, even the S.A. was disposed of as having become doomed.

I have heard the Counsel for the parties in this appeal. The Counsel for the appellant mainly pleads that his money has remained with the Bank for a considerable period and he is at least entitled to interest or compensation.

After hearing the Counsel for the parties, Counsel for respondent No.2 was given time to have instructions if respondent No.2 would consider paying 5% of the amount deposited, as compensation to the auction purchaser and the case was adjourned for today. The case has been called thrice since morning. The husband of respondent No.2 appeared in person and each time he prayed for a pass-over on the ground his Counsel was coming. When the request was repeated for the third time, it was declined and the submissions of the parties were noted.

The husband of respondent No.2, who is appearing in person, has made a statement that the he does wish to pay this 5% of the amount as he has already offered much more than what the auction purchaser had deposited and it is his wife's own property. The Tribunal, while passing the order, seems to have protected the interest of the Bank. The Bank had maintained before the Tribunal that in case the plea of the auction purchaser was declined, the claim, if any, would have to be borne by the applicant borrower.

I have considered the prayer made by the Counsel for the appellant. Today, he not only seeks compensation of 5% for which the case was adjourned to enable the Counsel for respondent No.2 to have instructions, but he prays for more than the interest on the amount which had been lying with the Bank. I have not been able to find any justification to permit the claim of the appellant for grant of interest or 5% of the deposit as compensation. There was no embargo for the appellant to withdraw this money once the auction was conducted on a condition that the possession of the property would not be handed over to him. The rights of the auction purchaser were also not crystallized as there was no confirmation of sale in his favour. In view of this, there would not be any justification for the Bank or the respondent to pay any interest or compensation to the appellant.

The appeal, therefore, is without any merit and is accordingly dismissed.