Mobin Malik Enterprises vs Punjab National Bank And Ors.

Ranjit Singh, J

Appellant participated in an auction sale held on 15.7.2015 and emerged as the highest bidder when it offered an amount of Rs. 3,66,50,000/-. As per the terms of the auction, the appellant was required to deposit 25% of the bid amount immediately. The appellant did not have the requisite amount and was granted three days' time to deposit the balance amount to make up 25% of the bid amount. It was then the confirmation letter was issued on 21.7.2015 requiring the appellant to deposit the balance 75% amount within a period of 15 days. Appellant claims that it had met the Assistant General Manager and the authorised officer of the Bank and on their advice sent e-mails on 1.8.2015, 2.8.2015 and 6.8.2015 for extension of time to deposit the balance amount. As per the appellant, respondent Bank had promised to issue letter giving extension of time, but the Bank did not revert back on the request of the appellant. The appellant, however, deposited Rs. 45 lacs on 18.8.2015, Rs. 25 lacs on 21.8.2015 and another Rs. 25 lacs on 25.8.2015. The appellant claims to have deposited a sum of Rs. 1,79,50,000/- in total. It is thus obvious that the appellant could not deposit 75% remaining amount within the stipulated period. Appellant was never granted any extension to make this deposit.

The Bank had then issued afresh sale notice on 31.8.2015 after conveying cancellation of earlier auction in favour of the appellant on account of non-payment of the balance 75% of the bid amount in time. The appellant thus challenged the action of the Bank in cancelling the sale and forfeiture of the amount already deposited by the appellant.

The Bank objected to the locus standi of the appellant to file the application as the appellant could not be termed as 'any person' aggrieved within the scope of Section 17 of the SARFAESI Act. The Bank also denied the averment made by the appellant that the appellant had participated in the auction sale at the instance of the authorised officer. The Bank even has denied the assertion of the appellant that the appellant had met the authorized officer or Assistant General Manager ever or that the appellant was assured that the time to make the deposit of the balance amount would be extended. After taking note of all these facts, the Tribunal has rejected the prayer made in the S.A. for extending the time to enable the appellant to deposit the amount. Aggrieved against the same, the appellant has filed the present appeals.

Counsel for the appellant has disclosed that the property since has been sold for a sum of Rs. 3.81 crores, Counsel would submit that the appellant is ready to participate in the inter se bidding with the auction purchaser of the property. As per the Counsel, the appellant being an illiterate person had participated in the auction on being asked by the authorized officer of the Bank who had assured him for extension of time to make the deposit. Counsel would accordingly plead that the appellant would at least deserve an opportunity to participate in the inter se bidding.

I have examined the submissions made before me. I am least impressed with the line of arguments pursued by the Counsel for the appellant. The appellant has faulted at every stage in making timely deposit of bid amount. It could not deposit 25% of the amount strictly in terms of the auction notice. Still, bid of the appellant was not cancelled. Thereafter, the appellant was required to deposit the balance amount within 15 days. In fact, the Bank had responded to the e-mail initiated by the appellant on 2.8.2015 wherein the appellant had sought extension of time by 18 days. In response, the appellant was informed and requested to deposit 75% of the amount within 15 days from the date of confirmation of sale, i.e., up to 5.8.2015. The appellant was clearly forewarned that in case of default in making the payment within the stipulated period, the amount deposited by it would be forfeited as per the terms and conditions mentioned in the auction notice. The appellant certainly has no right to insist on extension of time to make deposit once auction held in its favour had been cancelled. The request of the appellant to participate in inter se bidding in this ground is totally unfair. If the appellant had any intention, it could have bought the property at a lesser value. Despite opportunity and forewarning, the appellant failed to deposit the requisite amount. The cancellation of the auction in favour of the appellant was a right step taken by the Bank. I do not see any merit in the prayer made by the appellant to hold inter se bidding between it and the successful auction bidder and would reject this oral prayer as well.

There is, otherwise, no merit in the appeal and the same is accordingly dismissed. However, liberty is granted to the appellant to approach the authorized officer of the Bank for refund of the forfeited amount. Since I have considered the plea of the appellant on merit, the delay of 58 days in filing Appeal No. 71/2016 shall stand condoned.