M/S LABU BUILDER and ANR. vs THE STATE BANK OF INDIA and 2 ORS

Heard Mr. S.K. Goswami, learned counsel for the petitioners as well as Mr. M. Sharma, learned counsel representing respondent no.2 and Mr.

R. Borpujari, learned counsel representing respondent no. 3. There is no representation on behalf of the respondent no.1 i.e. the State Bank of

India.

The petitioner no.1, as a proprietorship firm, is engaged in the business of construction of multi-storied buildings, flats and residential apartments.

The petitioner no.2 is the purchaser of the Flat No.506 in Saraswati Apartment constructed by the petitioner no.1. The respondent no.3, as a

buyer, had initially proposed to purchase the said Flat No.506 and had also entered into an agreement with the petitioner no.1. The said

respondent no.3 had also taken loan from the State Bank of India towards purchase of the Flat and in terms of the agreement between the

petitioner no.1 and the respondent no.3, the said loan amount was credited into the account of the petitioner no.1. However, final sale and

purchase of the Flat between the petitioner no.1 and respondent no.3 did not fructify, leading to cancellation of the agreement vide Deed dated

01.02.2007. The said Flat No.506 was eventually sold to the petitioner no.2. Consequent upon cancellation of agreement, the petitioner no.1 also

refunded the entire amount to the respondent no.3. When the matter rested thus, the petitioners were dismayed to come across Sale Notice dated

18.08.2016, as published in the Newspaper, in respect of the Flat No.506. The said Sale Notice was pursuant to order passed by the Debt

Recovery Tribunal, Guwahati in O.A. No.02/2010, instituted by the respondent no.2 as the lender upon acquiring the financial assets of the

respondent no.1 Bank in respect of the loan taken by the respondent no.3. This Sale Notice dated 18.08.2016 is the subject-matter of challenge in

the present writ petition.

Mr. Borpujari, learned counsel for the respondent no.3 submits that pursuant to order dated 09.04.2012 of the Debt Recovery Tribunal,

Guwahati in the aforesaid O.A. No.02/2010, his monthly salary, as an employee of the Bank of Boroda, is under attachment to the extent of one-

third of the salary amount, which is about Rs.22,000/- per month. Respondent no.3 also admits that he had intended to purchase the Flat and had

also entered into agreement with the petitioner no.1. Also, upon cancellation of the agreement, the entire amount tendered towards purchase of the

Flat was returned back to him by the petitioner no.1. In short, it is submitted that as of now necessary payments are being realised towards

liquidation of the loan amount.

From the records available it is clear that in the Original Application filed by respondent no.2 neither of the petitioners were made party

respondents. Having regard to the fact that the Bank had credited the loan amount into the account of the petitioner no.1 and in that regard a

mortgage deed also having been executed in favour of the Bank, the said petitioner no.1 was a necessary party to have been impleaded as a party

respondent in the Original Application. This was not done. Rather, the Sale Notice dated 18.08.2016 came to be published taking both the

petitioners by surprise. Apparently, the proceedings in the Original Application was without any effective participation of the petitioners. Any order

passed thereon would legally not bind the petitioners without having been parties to the lis. This being the position, the Sale Notice dated

18.08.2016 cannot be acted upon detrimental to the interest of the petitioners, more so because the outstanding loan amount is being regularly

realised from the salary of the respondent no.3. This is a case where the impugned Sale Notice has been published/issued in utter violation of the

principles of natural justice. The same was a fall-out of the order passed by the Tribunal where the petitioners were not made parties. Also, no

notice was issued to the petitioners prior to issuance of the Sale Notice dated 18.08.2016.

For the reasons above, we find merit in the writ petition and, accordingly, the same stands allowed by setting aside the Sale Notice dated

18.08.2016 (Annexure-7). Ordered accordingly.