Nilamber Khullar vs Punjab National Bank & Anr

Thakur, J

In the earlier round of litigation, this Bench by virtue of order dated 03.11.2018 had upheld the procedure adopted by the Bank for fixing of the reserved price. However, the petitioner was given liberty to bring a buyer, who would quote his bid higher than the one quoted by the highest bidder in the auction process. In that eventuality, it was ordered that the respondent would proceed to recover the higher price in regard to the property in question.

Counsel for the petitioner states that as against the market value of the property, which was determined at Rs.3.53 crores, the distress sale value/realizable value of the property, was determined at Rs.282.00 lacs. The Bank with a view to sell the asset in the shape of a residential house where the petitioner is currently residing is trying to sell out the property to a bidder at a price lesser than not only the actual value of the property but even lesser than the distress value.

Counsel for the respondents, Mr. Parveen Kapahi, submits that as against the distress sale value of Rs. 2.82 crores approx, the bid that has been received by the Bank is 2.05 crores. This amount is less than the distress value/realizable value of the property which was held to be good by our judgment and order dated 03.11.2018.

Counsel for the petitioner, Ms. Monika Kohli, states that pursuant to the liberty granted to the petitioner by the Division Bench of this Court, even when a bidder available with the petitioner for a higher amount was produced before the Bank for buying the property in question, the same was declined by the Bank on the premise that the bidding process had already been closed. This fact, however, is emphatically denied by the counsel for the Bank, who states that repeated opportunities were granted to the petitioner to bring the bidder which he failed to do.

Be that as it may, during the process of arguments in the court before us, it transpires that the outstanding loan is approximately one crore, which includes the element of interest payable by the petitioner to the Bank. The value of the property in any case is much more than the amount which is sought to be recovered by the Bank. We are told that this is a house which is in occupation of the petitioner where he is residing with his family including his children.

Counsel for the petitioner states that if some time was to be given to the petitioner up till 20th April, 2019, the petitioner would discharge the entire liability of the Bank after borrowing the same from a different source with a view to clear the encumbrance on the property in question.

We feel that this opportunity which is sought by the petitioner requires to be granted to him with a view to save his residential house, especially, where there is total mismatch between the value of the property which is sought to be sold and the outstanding loan amount which is sought to be recovered.

Be that as it may, keeping everything else in the background and notwithstanding the various issues raised in the petition, this petition is disposed of with the following understanding:

"That the petitioner would have one opportunity till 20th April, 2019 to pay all outstanding loan amount in favour of the Bank which would include the element of interest and is stated to be approximately around one crore. Upon such a deposit, the property in question would be cleared of all encumbrances and a proper discharge given. Within this period, it shall also be open to the petitioner to bring a bidder, who would quote a price higher than the one which has been quoted by the bidder, who has already deposited an amount of Rs.50 lacs with the Bank. In that eventuality, the higher bid shall be accepted and the one which is received already by the Bank would not be considered. In case the petitioner fails to do the needful, then it would be open for the Bank to dispose of the property in accordance with the bid received for an amount of Rs.2,05,30,000/- from the bidder.