Pandit Vetrivel vs The Authorised Officer, Canara Bank, Canara Bank, International Operations Branch, M/s. Orient Exports and M/s. Vijay Agencies

P.K. Misra, J.—Heard the learned counsel appearing for both parties. The petitioner has challenged the order of forfeiture passed by respondents 1 and 2. The petitioner had participated in an auction sale, pursuant to the notice issued by respondents 1 and 2. As per the requirement, the petitioner had deposited 25% of the bid amount. It appears that in a matter pending before the Debts Recovery Tribunal-I, the Tribunal had granted an order of interim stay of auction, by order dated 26.4.2007. As a matter of fact, such an order passed by the Debts Recovery Tribunal-I indicates that the Advocate, who represented the present respondents 1 and 2 before the Tribunal, had raised objections regarding the grant of an order of interim stay. But notwithstanding such objections, the interim order of stay had been passed by the Debts Recovery Tribunal-I, in the presence of the said Advocate. Therefore, when the order of stay dated 26.4.2007 was in operation, obviously, the auction should not have been held and the present petitioner should not have been called upon to deposit the 25% of the bid amount.

Be that as it may, it is apparent that in view of the interim order of stay, which is still in force, the transaction could not be completed. In such view of the matter, the order of forfeiture passed by respondents 1 and 2 cannot be supported and such an order is hereby quashed. In view of the above, the respondent-Bank is directed to refund the amount collected from the petitioner, along with an interest at the rate of 6% per annum, with effect from 1.4.2008 till the date of making payment. This direction shall be given effect to within thirty days from the date of receipt of a copy of this order. It is made clear that it would be open to the respondent-Bank to proceed further in the matter of auction, only after finalization of the pending proceedings before the Debts Recovery Tribunal-I. However, it goes without saying that the expenditure incurred for the auction shall be debited from the account of the borrower. The Writ Petition is allowed with the above directions. No costs. Consequently, M.P. Nos. 1 & 2 of 2008 are closed.