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Judgment
S.N.H. Zaidi, J
Both these appeals impugn the order dated 19.12.2011 of the learned Presiding Officer of the Debts Recovery Tribunal-III, Delhi (for short, the DRT) passed on interim prayer in S.A. No. 714/2011, whereby the assignee company of the secured creditor Bank, Pheonix ARC Pvt. Ltd. (the appellant in Appeal No. 456/2011) was directed not to confirm the auction sale in favour of the auction purchaser, Optiemus Infracom Ltd. (the appellant in Appeal No. 457/2011), without the prior permission of the Tribunal. It appears that Vijaya Bank had sanctioned certain credit facilities in the year 2006 to 1st respondent herein, Ishan System Pvt. Ltd. (hereinafter referred to as the borrower company) on creating mortgage of immovable property bearing Plot No. 2-A, Sector 126, Noida, District Gautam Budh Nagar (UP.) in favour of the Bank. But since the borrower company could not maintain financial discipline, the Bank classified their loan accounts as Non Performing Asset (NPA) and issued notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act. 2002 (for short, the Act) demanding an amount of Rs. 42,74,98,205.88 along with interest and also took symbolic possession over the secured assets. Vijaya Bank, thereafter, transferred all its rights, title, interest, etc. qua the NPA of the borrower company along with all under-lying assets/securities by assignment to Pheonix ARC Pvt. Ltd. (hereinafter referred to as the assignee company). The borrower company challenged the action of the Bank in a Writ Petition before the Hon'ble Delhi High Court, which was dismissed. The borrower company then filed an application (S.A. No. 416/2010) under Section 17 of the Act with some delay and the DRT, as an interim measure, restrained the assignee company from taking possession over the property in question. The assignee company preferred appeal against that order wherein this Tribunal directed the DRT to dispose of the application (S.A.) after deciding the issue of limitation within the given timeframe. The DRT condoned the delay and allowed the said S.A., vide order dated 10.1.2011, against which both the assignee company as well as the Vijaya Bank filed two separate appeals (Appeal Nos. 44/ 2011 and 45/2011) before this Tribunal. Both these appeals were allowed by a common order dated 11.4.2011 made on the basis of the consent of the parties whereby the borrower company agreed to pay the notice amount and to surrender the physical possession of the secured asset to the assignee company, but keeping the right of redemption under Section 13(8) of the Act reserved. It had also given up all the challenges put forward before the DRT in the S.A. and the objection to the assignment of the debt to the assignee company. This Tribunal, by the said order dated 11.4.2011, appointed the Authorized Officer of the assignee company as the Court Receiver and directed him to take physical possession of the secured asset on 19.4.2011 and liberty was granted to the borrower company to bring better buyer for the property.
The authorized officer of the assignee company, accordingly, took physical possession over the secured asset and put it to sale after obtaining the valuation report and fixing reserve price thereof at Rs. 125 crores and published the sale notice in four English and three Hindi daily newspapers. The borrower company was also informed for bringing the buyer and participation in the auction sale scheduled for 5.9.2011. The borrower company challenged the auction notice in S.A. No. 367/2011. The DRT, however, allowed the assignee company to proceed with the auction but subjected the confirmation of sale to the outcome of the S.A. and the borrower company was given liberty to produce its buyer in the auction. The auction scheduled for that date, however, failed as neither any buyer had turned up nor the borrower company could bring any buyer at the time of auction. The Authorized Officer then issued another notice for sale of the secured asset for 10.10.2011 after reducing the earlier reserve price by 10% and fixing it at Rs. 112.50 crores and again published the sale notice in four English and three Hindi daily newspapers, but again no buyer had turned up and the borrower company could also not produce any buyer and the second auction also failed.
During the hearing of S.A. 367/2011 scheduled on 2.11.2011, the borrower company submitted on its own that it had a buyer and to show its bona fide offered to deposit Rs. 5 crores within 10 days, but the same was not deposited and an extension of time till 30.11.2011 was sought, but again neither any buyer was produced nor any amount was deposited.
The Authorized Officer of the assignee company once again put the secured asset on sale for 5.12.2011 with the same reserve price of Rs. 112.50 crores and notices for auction sale were again published in four English and three Hindi daily newspapers. In this auction two bids, one from Wishtree Developers Pvt. Ltd. for Rs. 112.75 and the other from Optiemus Infracom Ltd. for Rs. 113.01 were received, but since the bid of Wishtree Developers was not accompanied with the required demand draft/pay order, it was rejected by the Authorized Officer as invalid and the bid of Rs. 113.01 was accepted and Optiemus Infracom Ltd. (hereinafter referred to as the auction purchaser) was declared as the successful bidder, who also deposited 30% of the bid amount on the same day as per terms of the sale. The assignee company filed a caveat, on 7.12.2011 before the DRT-III, Delhi qua the sale of the secured asset conducted on 5.12.2011 and also filed an affidavit in SA 367/2011 informing about the successful sale of the secured asset in favour of Optiemus Infracom Ltd. On 12.12.2011 the borrower company unconditionally withdrew the said S.A.
Another application under Section 17 of the Act (S.A. No. 714/2011) has been filed by the borrower company on 13.12.2011, challenging the auction sale dated 5.12.2011, wherein the learned Tribunal has passed the impugned order giving rise to these appeals.
I have heard Mr. Suresh Dutt Dobhal for Phoenix ARC Pvt. Ltd. (the assignee company), Mr. Rajeeve Mehra, Sr. Advocate along with Mr. Arvind Sharma for Optiemus Infracom Ltd. (the auction purchaser) and Mr. S.S. Kulshrestha, Sr. Advocate along with Mr. H.P Sharma and Mr. Sharad Kumar Vaish for Ishan Systems Pvt. Ltd. (the borrower company) and perused the record.
After the matter was reserved for orders on 4.1.2011, written submissions on behalf of the borrower company were received on 11.1.2012 in the office by speed post and courier with the Vakalatnama of Mr. Manish Vashisht and Mr. Sameer Vashisht, Advocates, in Appeal No. 457/2011. Although no submissions are welcomed, either oral or written, after the matter is reserved for orders and that too by any new Counsel, but the same have been kept on record
Mr. Dobhal pointed out that in its third application (S.A. 714/2011) the borrower company has challenged the sale of the secured asset only on two counts, firstly, that it has been finalized at a throwaway price; and secondly, that the secured asset is a leasehold property and as per Clause 16 of the lease deed dated 27.3.2004, the demised plot is to be used by the lessee for the development and construction of Software Technology Center and the auction purchaser is not in the business of information technology or IT enabled services. His submission is that on all the three occasions when the secured asset was put to sale, the borrower company was informed by serving the auction notice but despite the presence of its Director on two occasions at the auction site, no buyer could have been brought by it and since no other buyer had also turned up, therefore, two auctions had failed and on the last occasion, neither any of the Directors of the borrower company appeared, nor the borrower could identify any buyer, therefore, it cannot say that the property has been sold out at a throwaway price. It is pointed out by him that in Para 4(xxvii) - (xxxvi) of its reply/counter-affidavit, the borrower company had admitted that as on today also, it had no buyer. He also submitted that the auction proceedings were conducted in accordance with the Act and the rules after obtaining valuation report of the secured asset and giving due publicity by publishing auction notice in seven leading newspapers of both English and Hindi having vide circulation in Delhi and NCR. It has been pointed out that though no bid was received at the reserve price of Rs. 112.5 crores in the second attempt of sale on 10.10.2011, yet the reserve price was not reduced for the auction held on 5.12.2011. Mr. Dobhal further pointed out that the learned DRT has observed in the impugned order that the property had been auctioned under the mandate of legislation to recover the legitimate dues of the respondent financial institution, but had also commented that it did not mean that due procedure should not be followed by the respondent financial institution, without indicating as to what due procedure was not followed in conducting the auction sale. He also pointed out that the borrower company had not raised any plea to that effect in its application. He also submitted that though the auction purchaser is respondent No. 2 in the S.A., but the impugned order has been passed without issuing notice or hearing it on interim relief.
Mr. Rajeeve Mehra, the learned Sr. Advocate, submitted on behalf of the auction purchaser that the borrower company while filing the first application (S.A. 416/2010) had raised all possible challenges in the matter but thereafter, in appeals 44/2011 and 45/2011 before this Tribunal, it had voluntarily given up all those challenges put forward before the DRT, as is evident from the consented order dated 11.4.2011 passed in those appeals and as such he is estopped from re-agitating those issues. He pointed out that during the hearing of the appeal. Mr. R.S. Yadav, the Director of the borrower company, undertook to deposit Rs. 5 crores and this Tribunal had recorded his undertaking in the order dated 29.3.2011, but the payment was never made, which showed that the borrower had no intention to pay any amount towards the outstanding dues of the public money or to redeem the mortgage. He further pointed out that during the SA, the Directors of the borrower company had attempted to induct a tenant without the permission of the Court, for which they had to tender unconditional apology, which is also reflected from the aforesaid order dated 11.4.2011.
Mr. Mehra further submitted that the borrower company has no prima facie case for any interim relief as despite having an outstanding amount of more than Rs. 42 crores, no amount has been paid by it, whereas the auction purchaser has deposited a sum of Rs. 33,90,30,000/- towards 30% payment of the bid amount and has also paid Rs. 5.65 crores towards the payment of the stamp duty for due execution of sale certificate. He also pointed out that besides the above payments, a sum of Rs. 77,96,425/- has been paid to the Standard Chartered Bank towards the processing fee for availing the loan of 69.75 crores for payment of the 70% of the bid amount and Rs. 55,15,000/- has also been paid towards the expenses for carrying out due diligence for the purchase of the secured asset.
He further pointed out that no notice qua the third application (S.A. 714/ 2011) was given to the auction purchaser despite the fact that on 7.12.2011 an affidavit was filed in S.A. 367/2011 by the assignee company intimating that the appellant had been declared as the successful bidder in the auction sale of the secured asset held on 5.12.2011. Mr. Mehra also submitted that there is no discussion in the impugned order as to what irreparable loss the borrower would suffer and without appreciating that the interest of the auction purchaser is involved in the matter, the DRT has passed the impugned order without serving any notice upon the auction purchaser. He also pointed out that the borrower company had tried to transfer its interest in the secured asset for Rs. 103 crores and had entered into a MOD in this regard with the proposed buyer but the deal could not be fructified and in view of these circumstances, it cannot be said that the sale of the secured asset for Rs. 113.01 crores was at a throwaway price, when the borrower company could also not identify any buyer for higher amount.
Mr. Mehra also submitted that as per the Memorandum and Articles of Association of the appellant company, the object of the auction purchaser company is also to deal with the IT related goods and services, hence, it also meets the requirement of Clause 16 of the lease deed. He further submitted that the said Clause 16 only prevents the use of the demised plot other than for development and construction of software technology center without the consent of the lessor (the NOIDA) but that clause also implies for such consent subject to such terms and conditions as the lessor may impose.
Mr. S.S. Kulshreshta, the Senior Advocate for the respondent borrower company pointed out that prior to the issuance of notice under Section 13(2) of the Act in 2009, the Vijaya Bank had got the valuation of the secured asset done and at that time as per report of the registered valuer Mr. Ashok Raichand, the value of the secured asset was about Rs.178 crores which was part of the record of S.A. No. 416/2010, and the assignee company in its reply to the said S.A. had not rebutted the said value and as such it could not reduce the value of the secured asset and fix the reserve price at Rs. 112.5 crores for the auction sale of 5.12.2011. In this regard, Mr. Kulshreshta relied upon the judgment of the Hon'ble Supreme Court in Authorised Officer, Indian Overseas Bank and Anr. v. Ashok Saw Mill, III (2009) BC 640 (SC) : VI (2009) SLT 10 : (2009) 8 SCC 366.
Mr. H.P. Sharma, the other Counsel for the borrower company, heavily relying upon the order dated 11.4.2011 of this Tribunal, submitted that this Tribunal besides giving an opportunity to the borrower company to bring better buyer before the Court, had also given the opportunity to question the auction proceedings if the same are not conducted in accordance with law and the S.A. 714/2011 has been filed as the auction sale of 5.12.2011 was not conducted by the Authorized Officer in accordance with Act and the rules made thereunder. He also pointed out that according to Clause 16 of the lease deed executed between the borrower company (the lessee) and the NOIDA (lessor), the demised plot was required to be used only for the construction for the development of software technology centre, but in the auction notice issued by the Authorised Officer, this fact had been concealed and as such the IT Companies which could have offered better price, had not responded to that notice and did not turn up to participate in the auction.
It is also pointed out by Mr. Sharma that in respect of the valuation of the land of NOIDA, the Hon'ble Supreme Court has fixed the price at about Rs. 70,000/- per sq. mtr. and at such rate, the valuation of the land of the secured asset alone could not have been less than Rs. 90 crores and on adding the value of the construction, the total value of the secured asset could not have been less than Rs 180 crores, but it has been sold out for a meagre sum of Rs. 113.01 crores only.
Mr. Sharma also submitted that as per definition of "Fair value" given in Guideline 3 (1) (v) of the Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003 (for short, the RBI Guidelines), "fair value" means the mean of the earning value and the breakup value, but the valuation of the secured asset has not been determined in accordance with the said definition. He further submitted that Clause (c) of Section 9 of the Act provides for rescheduling of the payment of debts payable by the borrower, but the assignee company, which is an Asset Reconstruction Company, did not reschedule the payment of debt by the borrower company in accordance with the said provision and directly proceeded to sell the secured asset. It is further submitted by him that while conducting the auction dated 5.12.2011, the assignee company had also not acted in accordance with the requirement of Rules 8(5), (6) and 9 of the Security Interest (Enforcement) Rules, 2002 (for short, the Enforcement Rules) as its Authorised Officer had neither obtained the valuation report of the secured asset before fixing the reserve price [Rule 8(5)], nor served 30 days mandatory notice upon the borrower company [Rule 8(6)] and confirmed the sale below the reserve price without the consent of the borrower company [2nd Proviso to Rule 9(2)].
The written submissions sent on behalf of the borrower company, as mentioned above, contain almost similar submissions as put forward by Mr. H.P. Sharma. An additional submission made in paragraphs 7,8,10 and 11 is that as per terms of the auction sale, the highest bidder was to deposit 70% of sale price within 15 days from the date of opening of tender and having been declared as successful bidder, but since the appellant had failed to deposit the balance amount of the bid within the stipulated period, therefore, the relief in appeal qua direction to the assignee company to issue sale certificate in favour of the auction purchaser cannot be allowed. However, in Para A.II of the Legal Submissions, it has been said that as per settled law, the auction purchaser is to deposit the balance sale consideration. within 15 days from the date of confirmation of sale and in para C.I it has been said that the sale has so far not been confirmed. Though several cases of the Apex Court and High Courts have been cited in the written submissions, but they have not been supplied with it.
The learned Counsel for the appellants have also pointed out to the conduct of the Directors of the borrower company during the earlier proceedings held before this Tribunal and the learned Counsel for the borrower company has also made submissions in respect thereof, but it is not being taken into account, because, in my opinion, it is not relevant for the purposes of this appeal.
A perusal of the impugned order shows that the auction dated 5.12.2011 was challenged by the borrower company on three counts, viz., (i) the secured asset was grossly under valued; (ii) violation of Rules 8 and 9 of the Enforcement Rules in conducting the auction sale; and (iii) sale of the secured asset at throwaway price. It was also pointed out that per Clause 16 of the lease deed, it was incumbent upon the lessee to use the demised plot for the development and construction of the Software Technology Centre and the auction purchaser was not in the business of information technology or IT enabled services and the auction sale notice did not emphasize that the property was to be developed for IT purpose. Attention of the PO was also drawn towards Guideline 3(1)(v) of the RBI Guidelines and Section 9(c) of the Act. It appears that the learned Tribunal below without clarifying as to what due procedure was not followed in conducting the auction sale or recording its prima facie satisfaction about the sale of secured asset at a throwaway, as alleged, or opining that sale could only be made to an IT enabled company and the auction purchaser was not such a company, has stayed the confirmation of sale by the impugned order
The RBI Guidelines, according to its statement of object and reasons, were issued to regulate the registration, measures of asset reconstruction, functions of the company, potential, norms, acquisition of financial assets and matters related thereto. It does not lay down any guideline for valuation of the secured asset acquired by the reconstruction company for the purposes of sale. The term "fair value", as defined in Guideline 3(1)(v), has only been used in Guideline 13 for a limited purpose of determining the realizable value of the investments of the securitization company or reconstruction company. In my opinion, "fair value" used in the RBI Guidelines cannot prima facie be accepted as a guiding factor for valuation of immovable secured asset for the purposes of sale under Rule-8 of the Enforcement Rules.
Section 9 of the Act lays down the measures which a securitization or reconstruction company may provide for the purposes of asset reconstruction and includes, in Clause (c) thereof, the rescheduling of payment of debts payable by the borrower as one of the measures. The said section is in Chapter II of the Act, which provides for regulation of securitization and reconstruction of financial assets of Banks and financial institutions. Indisputably, the Vijaya Bank took recourse to the measures under Section 13, which is in Chapter III of the Act, much before the rights of the Bank in the NPA of the borrower company were transferred to and vested in the assignee company by the deed of assignment dated 30.6.2010, as the notice under Section 13(2) was issued on 31.10.2009. According to the scheme of the Act, the measures for asset reconstruction under Section 9 can be taken by a reconstruction company before it proceeds to take measures for enforcement of security interest under Section 13. Since the financial interest of the Vijaya Bank in the NPA qua the secured asset was transferred to the assignee company after the Bank had initiated action under Section 13(4) of the Act, therefore, the assignee company, which is an asset reconstruction company, was not required to take any measure under Section 9 of the Act. The contention of the borrower company in this regard is thus not acceptable.
Rule 8 of the Enforcement Rules, which lays down the procedure for sale of immovable secured asset, in its Sub-rules (5) and (6) provides as under:
(5). Before effecting sale of the immovable property referred to in Sub-rule (1) of Rule 9, the Authorized Officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following method-
(a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets;
(b) by inviting tenders from the public;
(c) by holding public auction; or
(d) by private treaty.
(6) The Authorized Officer shall serve to the borrower a notice of thirty days for sale of immovable secured assets, under Rule (5):
Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a: public notice in two leading newspapers; one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include-
(a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor;
(b) the secured debt for recovery of which the property is to be sold;
(c) reserve price, below which the property may not be sold;
(d) time and place of public auction or the time after which sale by any other mode shall be completed;
(e) depositing earnest money as may be stipulated by the secured creditor:
(f) any other thing which the authorized considers it material for a purchaser to know in order to judge the nature and value of the property.
It appears that the Authorized Officer of the assignee company had fixed the reserve price of the secured asset at Rs. 125 crores, for the first auction scheduled for 5.9.2011 after obtaining the valuation report dated 20.4.2011 from Mr. T.R. Gandhi, a registered valuer. According to this report, the market value of the secured asset was estimated at Rs. 138,92,41,061/- and the realizable value of the property was determined as Rs. 125,03.15,954/-, I am prima facie satisfied that the requirement of Rule 8(5), as quoted above, was sufficiently complied with in fixing the reserve price. Admittedly, neither the auctions scheduled for 5.9.2011, nor for the subsequent date of 10.10.2011, could succeed, as no buyer had turned up, though for the subsequent auction dated 10.10.2011, the reserve price was reduced to Rs. 112.5 crores. The property was again put to sale at the same reserve price of Rs. 112.5 crores for 5.12.2011. It is also an admitted fact that no fresh valuation report was obtained either for the auction dated 10.10.2011 or 5.12.2011. The contention of the assignee company appears tenable that as auction dated 10.10.2011 was to be held after about a month of the failed auction of 5.9.2011 wherein no buyer was turned up for the reserve price of Rs. 125 crores and the borrower company could also not bring any buyer and the reserve price was reduced to Rs. 112.5 crores, therefore, there was no necessity to obtain any fresh valuation report and when again no buyer turned up on 10.10.2011 for the reserve price of Rs. 112.5 crores also and the borrower company could not identify any buyer and that auction also failed, then no valuation report was found necessary to obtain for the third auction for 5.12.2011. The requirement of valuation report is for fixing the reserve price and since the reserve price of Rs. 125 crores was fixed after obtaining the valuation report and the two auctions were held in quick succession within a period of three months from the first auction, therefore, in view of the circumstances that no buyer had turned up for the reserve price of Rs. 125 crores or even for the reduced price of Rs. 112.5 crores in the second auction, again fixation of reserve price at Rs. 112.5 crores for the auction dated 5.12.2011, without obtaining any fresh valuation report, does not make the action of the secured asset violative of Rule 8(5) of the Enforcement Rules.
The Sub-rule (5) of Rule 8 of the Enforcement Rules provides that the immovable secured asset can be sold by any of the four methods enumerated therein and under Sub-rule (6), thirty days notice for sale of immovable secured asset is required to be served upon the borrower only if the said asset is to be sold by methods other than by inviting tenders from the public or by holding public auction, because, according to the Proviso to Sub-rule (6), if the sale is to be effected by inviting tenders or by holding public auction, a public notice is required to be published in two leading newspapers, including one in vernacular language, having sufficient circulation in the area, by setting out the terms of sale, etc. The purpose of the publication of the public notice for the sale of immovable property by inviting tenders from the public or by holding public auction in the leading newspapers of the area is that the residents of the locality at large, including the borrower, may know about the sale of the property and they may participate in the sale and the property may fetch a better price. Therefore, there is no requirement of service of notice for sale upon the borrower when the property is to be sold by inviting tenders from the public or by public auction. It is not the case of the borrower company that it had no knowledge of the auction scheduled for 5.12.2011 or the public notice was not published as per the Enforcement Rules. This fact is also not in dispute that public notice for the auction sale of the secured asset for 5.12.2011 were published in seven leading newspapers of the area including three newspapers in Hindi. I am thus satisfied that the requirements of Sub-rules (5) and (6) of Rule 8 of the Enforcement Rules qua the auction in dispute is prima facie proved.
In respect of the alleged violation of Rule 9 of the Enforcement Rules, it has been contended by Mr. Sharma that under the Second Proviso to Sub-rule (2) of the said rule, it is mandatory for the Authorized Officer to obtain consent of the borrower and the secured creditor for effecting the sale at the reserve price, if he fails to obtain a price higher than the reserve price but, in this matter, no such consent has been obtained from the borrower company. This contention does not appear to have any merit and is liable to be rejected on the ground that in the auction sale for 5.12.2011, the bid of Rs. 113,01 crores of the auction purchaser was higher than the reserve price of Rs. 112.5 crores fixed for that auction and as such there was no necessity for the Authorised Officer to obtain the consent of the borrower company for giving effect to that sale. The fixation of the reserve price by the Authorised Officer by reducing it from its earlier reserve price, does not require any consent from the borrower under the said Rules. The Enforcement Rules do not put any restriction on reduction of reserve price in appropriate case. The circumstance that the Vijaya Bank had obtained the valuation report from Mr. Ashok Raichand in 2009 before issuing the notice under Section 13(2) of the Act as pointed out by Mr. Kulshrestha, loses its relevance when the SA No. 367/2011, wherein the said report was filed, was unconditionally withdrawn by the borrower company. The principles of law enunciated by the Apex Court in Ashok Saw Mill case (supra) do not provide any guidance to the controversy involved in this case.
The contention of Mr. Sharma qua the valuation of the secured asset is that the Supreme Court in V (2011) SLT 409 = III (2011) CLT 89 (SC)=Civil Appeal No. 4567/2008, ITC Ltd. v. State of UP has fixed the valuation of the land in NOIDA @ Rs 70,000 per sq. mt. and, as per this rate, the valuation of the secured asset is not less than 180 crores, whereas it has been sold out by the Authorised Officer at a throwaway price of Rs. 113.01 crores only, but since no copy of that judgment of the aforesaid appeal has been produced by the borrower company, it is not possible for this Tribunal to express any opinion in this regard. Mr. Sharma has also referred to two valuation reports of the secured asset obtained by the borrower company from the valuers Mr. R.P. Gupta (for Rs. 235 crores) and Mr. Ashok Raichand (for Rs. 215 crores) filed before the DRT below in SA 714/2011. Since the DRT is ceased with the said SA and it is to consider the relevancy of these reports related to the valuation of the secured asset, therefore, any expression of opinion qua the said reports by this Tribunal at this stage may adversely affect the interest of either party.
The contention of the borrower company in respect of Clause 16 of the lease deed dated 27.3.2004 executed between NOIDA and the borrower company has no force, as though the said clause makes it obligatory for the lessee to use the demised plot only for the for the development and construction of the Software Technology Centre, yet it also implies that it can be used for other purpose as well with the consent of the lesser and subject to such terms and conditions as the lesser may impose. The clause, thus, provides for the use of plot for other purpose with the consent of the lessor and with such terms and conditions as may be imposed by it. It is true that this condition was not specifically mentioned in the sale notice published in the newspapers that the land is to be used for the development and construction of the Software Technology Centre but a perusal of the public notice dated 31.10.2011 shows that it does contain all the necessary details as required under the Proviso to Sub-rule (6) of Rule 8 of the Enforcement Rules. The said public notice, therefore, does not appear to be prima facie suffering with any legal infirmity.
The plea raised in the written submissions of the borrower company, that since the highest bidder has not deposited the remaining 70% of the bid amount within the stipulated 15 days period, i.e., by 20.12.2011, as per the term of the public notice, therefore, it is not entitled for the relief regarding issuance of Sale Certificate has no force, because the confirmation of sale has been stayed by the impugned order and as per the settled law, the balance sale consideration is required to be deposited within 15 days of the confirmation of sale, which has yet not been done, thus in view of these circumstances, non deposit of the remaining sale consideration by 20.12.2011 does not make the auction sale invalid.
In view of the foregoing discussion, the order impugned is not sustainable as the learned DRT, while making the same, has not properly appreciated the relevant provisions of the Act and the rules as well as the facts and circumstances of the case as discussed above. However, since the learned Tribunal is seized with the S.A., therefore, the DRT below is directed to dispose of the same in accordance with law without being influenced by any observation/expression of opinion made in this order, which has been made for the purpose of this appeal only.
Both the appeals are, accordingly, allowed and the impugned order dated 19.12.2011 is set aside. The Authorized Officer may proceed further in accordance with law, but the sale of the secured asset shall be subject to the final disposal of the S.A.
With the above observation, both the appeals are disposed of. Copy of this order be furnished to the parties as per law and one copy be sent to the DRT concerned.