Sh. Jagmohan Singh Arora vs India Bulls Commercial Credit Ltd

P.K. Bhasin, Chairperson

When a person who is entrusted with the job of auctioning a 'public property' to recover public money acts, while auctioning a public property arbitrarily and according to his whims and fancies and flouts and throws to the wind all legal provisions what can be presumed against such person,(like the authorized officer of respondent no.1 in this case). It is any body's guess.

The authorized officer of respondent no.1, who is also impleaded as respondent no.3 in this appeal, put up the property of appellants mortgaged with respondent n.1 to secure the repayment of crores of rupees financed to them. Auction was to be held on 31.08.18 and necessary terms and conditions were set out in the sale proclamation. Reserve Price was fixed at Rs.4,75,00,000/- . One of the conditions for participating in the auction was that EMD of 10% was to be made by Demand Draft/RTGS/NEFT. The successful bidder was required to pay 25% of the bid amount, inclusive of 10% deposited as EMD, immediately upon the fall of hammer or at the most within next working day. In the bid document it was mentioned that this payment of 15% by the successful bidder will also be required by DD/RTGS/NEFT.

Respondent no. 3 was the sole participant who deposited EMD of 10% of reserve price. On the date of auction, however, upon being declared successful having offered to buy the property for a sum of Rs.4,75,01,000/- he did not deposit balance 15% on the date of auction and instead he handed over a cheque dated 01.09.2018 for Rs. 71,25,250/- and the recovery officer gladly accepted the cheque thereby flouting the condition of deposit of 15% by DD/RTGS/NEFT prescribed by himself in the bid document which was signed on behalf of the respondent no.3. The payment of EMD by cheque is not a legal tender as held by the Hon'ble Supreme Court in its judgement in "Rao Mahmood Ahmed vs Ranbir Singh,", reported in AIR 1995 SC 2195. Mr. Sunil Dalal, learned senior counsel for the respondents 1 and 2 tried to distinguish this judgement but failed to notice the crux of the judgement where it has been held that EMD payment cannot by way of cheque. In fact the authorized even otherwise went out of the way to oblige the respondent no. 3 when he issued sale confirmation letter on the same day of auction informing the respondent no. 3 that his bid had been accepted and further confirmed having received 25% payment when in fact he had received only 10 % that day. This shows collusion between authorised officer and so called auction purchaser. Thus, the secured creditor was defrauded by its own authorized officer and it appears that he did not send the offer of respondent no.3 for confirmation by the secured creditor without which he could not have demanded 75% payment on 31.9.2018. Mr.Sunil Dalal, learned senior counsel for the respondents no. 1 and 2 tried to defendant no.2, authorized officer by arguing that cheque payment would have been deemed to have been deemed to have been made on 31.1.2018 upon encashment and that is why in the confirmation latter dated 31.8.18 he had written that he had received full 25%. The authorised officer could not assumed that the cheque would be encashed on presentation to the auction purchaser's bank. It is is also significant to note that the authorized officer presented the cheque on 4.9.18 to help the auction purchaser to muster sufficient funds in its account which admittedly it did not have on 31.8.18 or 1.9.18. The DRT has tried to justify this on the ground that many relatives and friends of the auction purchaser had sufficient funds in their accounts. With respect to the learned Presiding Officer this is perverse reasoning that friends etc. of auction purchaser would have pooled in funds in the account of auction purchaser in time. T hat could be on 31.8.18 if at all they wanted to do.

Now the question arises what was the compulsion for the authorized officer accepting payment by cheque dated 01.09.2018. There is no explanation or plausible reason for contravening this mandatory requirement of payment by DD/RTGS/NEFT by the authorized officer. What was his interest in ensuring that the property in question is sold to the respondent no.3 only, the sole participant. How he could issue letter dated 31.08.2018 confirming receipt of 25% amount and requiring him to pay balance of 75% within 15 days. That showed that there was something fishy in the transaction. This act of authorized officer shows that he had some interest in the transaction. He played a blatant fraud on the secured creditor. The respondent no.3 has very conveniently put the blame on the authorized officer. They say what is their fault if the authorized officer accepted payment by post dated cheque and issued a letter confirming receipt of 25% on 31.08.18 and for this this fault of the authorized officer they cannot be made to suffer.

In my view, this was a patent illegality in matter of payment of 15% by cheque which goes to the root of matter inasmuch as the respondent no.3 had been allowed to walk away a declaration that he was successfull bidder without his paying full 25% on the date of auction or on 1.9.18 which was a working day of the bank. The only way the payment could be said to have been made was by DD or even by RTGS on 31.08.18 or at the most on 01.09.2018. There is no explanation as to why did the authorised officer did not insist for payment of 15% on 31.08.18 or even on 01.09.2018 and why did he accept the payment by cheque and not by any of the modes specified by him in the tender documents. This shows that the authorised officer wanted to help the sole auction participant and he committed gross illegality by violating Rule 9(3) of Security Interest(Enforcement)Rules,2002.

Mr. Sunil Dalal, learned senior counsel for the respondents 1 ad 2 had sought to justify the payment by cheque dated 1. 09.18 on the ground the in the sale proclamation it was simply provided that payment of 15% was to be paid and not that it could be paid only by DD/RTGS/NEFT. Written arguments were also filed to the same effect. While making this submission Mr.Dalal failed to refer to tender document which was signed by the respondent no.3 before the auction which clearly stipulated that the 25% payment could be by way of DD/RTGS/NEFT only.

Then Mr. Dalal also submitted that appellants had failed establish any prejudice suffered by them because of the auction purchaser not making payment of 25% by DD/RTGS/NEFT and therefore on this ground the auction could not be challenged. In support of this argument he placed reliance on a judgment if the Hon'ble Supreme Court "L & T Housing Finance Ltd. vs Trishul Developers" reported as 2020 SCC online 873. However, in that case there was procedural irregularity in issuing as g the demand notice under Section 13(2) of SARFAESI Act and so it was held by the Court that borrower had failed to show any prejudice caused due to that procedural error. When there is violation of the mandatory provision of law there is no question absence of prejudice being fatal. Same was the argument of Mr. Pallav Saxena, learned counsel for the respondent no.3, auction purchaser in his oral submissions as well as in the written submissions.

Now, let us see how the learned DRT has dealt with the issues involved in its impugned order dated 1.12.2020. That order reads under:-

"1. The present securitization application has been filed by the securitization applicants praying therein to set-aside the sale held on 31.08.2018 including the confirmation of sale, issuance of sale certificates as well as to set-aside the sale deed dated 05.11.2018 in respect of the property-in-question, i.e., 24/20, Shakti Nagar, Roshanara Extension, Delhi-110007.

Brief facts of the case are that the applicant is claiming to be the owner of the property bearing no. 24/20, Shakti Nagar, Roshanara Extension, Delhi-110007, and submitted that Late Shri. Joginder Singh was owner of the property-in-question by virtue of the conveyance deed dated 30.07.1953, who had expired on 12.09.1985 and the legal heirs of SardarJoginder Singh executed Relinquishment deed in favour of Mrs. ParamjitKaur, wife of Late Shri. Joginder Singh and two daughters of Shri.Joginder Singh also executed the relinquishment deed dated 01.02.2003in in favour of his three sons, Shri. Harvinder Singh Arora, Shri. Prit Pal Singh Arora, and Shri. Jagmohan Singh Arora. Thereafter, Shri.Harvinder Singh Arora and Shri.Prit Pal Singh Arora had expired, accordingly, the daughter of Shri. Harvinder Singh Arora, namely, PuneetKaur executed Relinquishment deed in the favour of Shri. Gurpreet Singh Arora, on 23.09.2009, one of the present appellants herein.The legal heirs of Shri.Prit Pal Singh Arora also executed relinquishment deed of Smt. PreetKaur, w/o Shri. Prit Pal Singh Arora, dated 20.06.2014.

It has been submitted that the applicant no.2 had applied for a loan facility of Rs. 4.00 crore, accordingly, the respondent bank had sanctioned Rs. 4,62,50,000/- which was repayable by virtue of 180 monthly EMI of Rs. 5,25,676/-. The respondent bank had disbursed an amount of Rs. 4,09,70,395/- on 30.09.2016 and an amount of Rs.30.00 lacs on 12.01.2017, totaling to Rs. 4,39,70,395/-. The respondent no.1 called upon the applicants to pay instalments of Rs. 4,03,062/- as settled by the respondent bank. Accordingly, the applicant duly paid Rs. 67.72 lacs by virtue of different instalments. However, due to sudden financial crisis in the business and due to change in policy of the Government, the applicants have been in financial crunches, though, they have the bonafide intention to pay the same but unnecessary penalties have been imposed which may over rich the borrower. Accordingly, unnecessary harassment was made and accordingly, the account was declared NPA illegally and malafidely without any default and only a few EMIs were defaulted. Thereafter, the respondent bank issued a notice under Section 13(4) of the SARFAESI Act, 2002 dated 07.07.2018, and thereafter, sale notice dated 24.07.2018 was issued and the respondent bank fixed auction on 31st August 2018. However, this Tribunal, vide order dated 20.09.2018, was pleased to dismiss the S.A. Accordingly, the order was challenged by virtue of W.P(C) no. 11717/2018 before the Hon'ble High Court and accordingly, vide order dated 30.10.2018, the Hon'ble High Court was pleased to grant liberty to the applicant no.1 to assail the measures initiated by the respondent no.1 under Section 13(4) of SARFAESI Act, 2002. Thus, the sale notice dated 24.07.2018 and auction dated 31.8.2003 was wrongly reserved for an amount of Rs. 4.75 crore and the bid price to be submitted by the interested bidder should have been above the reserve price and the bidder shall have to enhance the bid price in multiples of 50,000/- and as per sale notice dated 24.07.2018. the respondent no.3, being the successive bidder was required to comply with the terms and conditions of the sale notice but the same was not complied with and the respondent no.2 illegally and malafidely executed the sale deed dated 05.11.2018 as the respondent no.3 was required to deposit 25% and the balance to be paid on the next date or next working date, whereas, the respondent no.1 & 3 were not entitled to extend the time as per the sale notice dated 24.07.2018.

Further, it is also submitted that the respondent no.3 issued cheques on different dates, wherein, mentioning the payment has been made by the respondent no.3 to the respondent no.1, totaling an amount of Rs. 4,75,01,000/-. Accordingly, the sale deed has been executed. In fact, the respondent no.3 purposefully violated the mandatory provisions and also violated the laws laid down with the Hon'ble Apex Court. The respondent bank illegally and malafidely handed the physical possession certificate dated 05.11.2018 including sale deed dated 30.08.2018/05.09.2018. Thus, the same are liable to be set-aside. Accordingly, it is prayed that the sale dated 31.08.2018 including confirmation of sale, issuance of sale certificate as well as sale deed dated 05.11.2018 be set-aside.

The respondent no.1 & 2 filed the reply thereby raising preliminary objections that the present SA is totally false, frivolous and misleading and the applicant has no locus standi to assail the statutory actions undertaken by the respondent no.1 as the recovery of the outstanding amount as on 11.04.2018 was Rs. 4,69,02,758/- as the applicant had availed the loan facility of Rs. 4,39,70,395/- and a sale certificate has been issued in favour of the respondent no.3. Ld. Presiding Officer, DRT-III, vide order dated 20.09.2018 had already held that there was no irregularity, illegality or perversity in the actions undertaken by the one respondent as the said order has never been challenged, accordingly the same attained finality as the applicants have withdrawn the challenge to the order dated 20.09.2018. Therefore, the issues raised in S.A no. 294/2018 cannot be raised in the present Securitization Application. Further, it is also submitted that the applicant pleaded that there is a violation of Rule 9(3) of the Security Interest (Enforcement) Rules, 2002, on the ground that the respondent no.3 was required to deposit 25% of the balance bid amount on the same date or on the next working date. In fact, the auction was held on 31.08.2018 wherein, the respondent no.3 being interested to purchase the property vested the earnest money i.e., 10% of the reserve price before submitting the tender online and on 31.08.2018, an amount of Rs. 71,25,250/- were deposited vide cheque 000844 dated 01.09.2018, which was equivalent to 25% of the sale price as on 01.09.2018, it was a Saturday, on 02.09.2018, it was Sunday and on 03.09.2018, it was Janmasthami holiday. Accordingly, the answering respondent deposited the cheque thereafter. It is submitted that there is no violation of Rule 9(3) of the Security Interest (Enforcement) Rules, 2002, as the auction purchaser had deposited 25% on the next date of the auction. Further, Rule 9(3) and 9(4) of the Security Interest(Enforcement) Rules, 2002, are for the benefit of the secured creditor and can be waived by the party for whose benefit such provision has been made.

On merits, it is being submitted that on 30.09.2016 a sum of Rs. 4,62,50,000/- were sanctioned out of which, a sum of Rs. 4,39,70,395/- were disbursed and the same was payable by way of 180 monthly instalments as the same were issued in the favour of G.E. International, wherein, the applicants in the present S.A were the co-applicants and ManinderKaur. Accordingly, the property bearing 24/20, Block-24, Shakti Nagar, Roshanara Extension, Delhi-110007 was mortgaged. Consequently, on account of overdue principal amount and interest for the period of more than 90 days, the account was declared NPA on 11.04.2018 and the demand notice was issued on 12.04.2018 under Section 13(2) of SARFAESI Act, 2002 for a sum of Rs. 4,69,2758/- which was duly served and the demand notice was published in the newspaper on 30.04.2018. Subsequently, the respondent no.1 took the symbolic possession of the property-in-question on 17.07.2018 and the same was also published in the leading newspaper on 19.07.2018. The respondent no.1 also issued a sale notice under Rule 8(6) of the Security Interest(Enforcement) Rules, 2002, dated 24.07.2018. Accordingly, the auction was held on 31.08.2018 for the recovery of Rs. 4,91,12,189/- Thereafter, the Ld. CMM appointed Receiver vide order dated 30.08.2018 for the purpose of taking over the physical possession of the secured property on 20.09.2018. By virtue of auction dated 31.08.2018, the respondent no.3 was declared as the highest bidder, who had deposited the earnest money as stated above thereafter, the remaining 75% of the sale price was to be deposited within 15 days' i.e., on or before 15.09.2018 and the postdated cheques were given as under, 15.09.2018 (cheque no. 000857 for a sum of Rs. 50,00,000/-, cheques no. 000859 for a sum of Rs. 90,00,000/-, cheque no. 000858 for a sum of Rs. 85,00,000/-, cheque no. 000871 for a sum of Rs. 51,50,740/- and cheque no. 000856 for a sum of Rs. 75,00,000/-)

Though, the respondent no.3 vide letters dated 10.09.2018 and 12. 10.2018 sought extension for depositing balance of the sale price till 15.10.2018 and 05.11.2018, which was duly conceded by the respondent no.3 vide letter dated 11.10.2018 and 13.10.2018. In view of the extension granted to the respondent no.3 the respondent no.1 encashed the cheques, thereafter, accordingly received the remaining payment of 75% of the sale price in the following manner, on 24.10.2018(Rs.90,00,000/- &Rs. 85,00,000/-), on 29.10.2018 (Rs.50,00,000/- &Rs. 75,00,000/-) and on 30.10.2018(51,50,740/-). Thereafter, on 05.11.2018, the sale deed was also got registered and issued in favour of respondent no.3. In fact, this Tribunal, vide order dated 20.09.2018, dismissed the S.A no. 294/2018, as there was no illegality, irregularity and perversity in the actions undertaken by the respondent FI. Thereafter, the respondents also filed writ petition before the Hon'ble High Court challenging the order dated 20.09.2018 passed by this Tribunal. Accordingly, the High Court dismissed the aforesaid writ petition as withdrawn with liberty to avail statutory remedies, if any, available under law. However, the applicants chose not to challenge the order dated 20.09.2018 passed in that S.A rather preferred to file tis S.A before Ld. DRT-II, which was returned and thereafter the present SA has been filed, which is sheer misuse of the process of law. On merits, all the rest paras have been wrong and denied and accordingly, prayed that the S.A be dismissed with exemplary costs.

Reply on behalf of respondent no.3 has been filed raising preliminary objections that the present S.A is not maintainable because S.A no. 294/2018, which was filed against the same under Section 13(2) and Section 13(4) has already been dismissed by this Tribunal vide order dated 20.09.2018 and the same has not been challenged, accordingly, the same has attained finality. Against this order, no appeal has been preferred; a writ petition was filed against this order, which was dismissed as withdrawn. In these circumstances, the said order has attained finality. Hence, the present S.A is not maintainable. In fact, the S.A applicants were sanctioned a loan facility against the property of Rs. 4,62,50,000/- vide sanction letter dated 30.06.2016 and the same was to be paid in 180 equal instalments, but, as the default was committed, the notice under Section 13(2) and Section 13(4) of the SARFAESI Act, 2002, was given, whereby, the applicants filed one Securitization Application no. 294/2018 on 02.08.2018, which was ultimately dismissed by this Tribunal vide order dated 20.09.2018. Thereafter, the property was put on auction as the bank has already taken physical possession of the property-in-question on 20.09.2018, wherein, the respondent no.3 was declared as the highest bidder in the auction conducted on 31.08.2018 and the amount of auction was to be paid as per the schedule. The respondent no.3 sought extension of time for the balance payment and the extension granted by the respondent F.I. The respondent no.3 is a private limited company as its entire shareholding is with the Pahwa family, i.e., ChetanPahwa and his mother Mrs. Anita Pahwa are the directors of the respondent no. 3 company. The respondent no.3 has paid 25% of the amount i.e., Rs. 1,18,75,250/- on 05.02.2019, as in-between, there were holidays. Thereafter, for the balance 75% of the amount extension of time was sought vide letter dated 10.09.2018 and the extension was granted, accordingly, the entire remaining amount was to be paid before 29.10.2018.

Further, it is also mentioned that on 01.09.2018, there was a balance of Rs. 50,15,184.83 in its current account with the HDFC Bank for which the cheque was issued. A sum of Rs. 6.11 lacs, in the shape of drawing power in the account no. 03392790000074 of M/s Lucky Brass Pvt. Ltd., the sister concern of the respondent no.3. A sum of Rs. 11,02,747.99 was the credit balance in the account of Mr. ChetanPahwa, director, in the account no. 03391600003983 with HDFC Bank, Roop Nagar. Another sum of Rs. 6,28,146.70 was the balance in the current account bearing no. 917020035115930 of the respondent no.3 with Axis Bank, Jawahar Nagar. Further, a sum of Rs. 10. 27,158.93 in the account of Mrs. Anita Pahwa was the credit balance in the Axis Bank, Shakti Nagar, MalkaGanj. Further, a sum of Rs. 5,23,471/- was the credit balance in the name of Mrs. Anita Pahwa, in account no. 918040029478114 with Axis Bank, Kamla Nagar and no cheque returned unpaid. Accordingly, the amount was within time and there was no illegality or irregularity in the same. On the basis of the said deposited amount, the respondent no.1 issued a sale certificate as well as sale deed executed on 05.11.2018. Para-wise reply has been wrong and denied and the facts stated above were reiterated. Accordingly, prayed for the dismissal of the present S.A with heavy costs.

On behalf of the applicants, detailed rejoinder has been filed raising various preliminary objections that the present S.A is duly maintainable and the applicants have all right to assail the actions/measures undertaken under Section 13 of the Securitization Act, more particularly, the NPA. In fact, the respondent no.1 has purposefully allowed the respondent no.3 to violate Rule 9(3) and 9(4) of the Security Interest(Enforcement)Rules, 2002, including the terms and conditions as mentioned in the sale notice dated 24. 07.2018, as the amount has not been deposited through DD/RTGS /NEFT and the balance was required to be paid within 15 days', which has not been deposited. Further, the reserve price and the highest bidder has to enhance their bid further in the multiple of Rs. 50,000/-which is not there which vitiate the entire proceedings. Further, the respondent no.3 was not maintaining sufficient balance in the account with HDFC Bank bearing account no. 03393200000560 on 1. 09.2018, therefore, the respondent no.3 was not in a position to deposit the same as credit balance of Rs. 50,15,184.13 was there in that account as on 01.09.2018. Apart that, there was no holiday in the clearing house on the 01.09.2018, 03.09.2018 and 04.09.2018. Therefore, the respondent made the payment on 05.09.2018 at around 18.20 hours through cheque and the respondent no.3 received an amount of Rs. 19.00 lacs on 04.09.2018 at about 14.41 hours and received another sum of Rs. 40.00 lacs on 04.09.2018 at about 15.19 hours and further received another sum of Rs. 6.28 lacs on 04.09.2018 which made sufficient balance to respondent no.3 to make the payment to respondent no.1. Thus, the respondent no.3 has not given 15% of the sale price on 01.09.2018 The applicant also stated that on 03.09.2018, being Janmashtami, whereas, in the clearing house, there was no holiday. Further, on 04.09.2018, it was working and as such no payment was made to the respondent no.1 by the respondent no.3 as per the sale notice and there was a clear violation of Rule 9(3) and 9(4) of the SecurityInterest(Enforcement)Rules,2002. Further, rest of the paras of the reply filed on behalf of the respondent no.1 & 2 have been denied and stated that the entire disbursement of sanction loan was not made which created hindrance in the business carried out by the applicant and the notice under Section 13(4) of the SARFAESI Act, 2002 was not published. Further, Rule 8(6) of the Security Interest(Enforcement)Rules, 2002, dated 22.07.2018, does not provide any extension of time, as agreed between the parties and the notice was also not served properly. The letters dated 11.09.2018 & 13.09.2018 are also an afterthought story which has been created and the respondent no.1 granted extension of time to the respondent no.3 illegally and wrongfully to make the payment till 30.10.2018. Besides that, the applicant is not involved in forum shopping. On merits, all the paras of the reply have been wrong and denied and reiterated the same in the preliminary objections. Accordingly, prayed for acceptance of the S.A.

In order to prove their case, the applicant no.2, filed her evidence by way of affidavit of Smt. PreetKaur, who has exhibited the photocopy of Relinquishment Deed is annexed as Annexure-A-4, photocopy of the Relinquish Deed in favour of Sh. Harvinder Singh Arora as AnnexureA-5, copy of relinquish deed in favour of Sh. Gurpreet Singh Arora Annexure-A-6, copy of relinquish deed in favour of Smt. PreetKaur Annexure-A-7, statement of account Annexure-A-1/8, copy of order passed by Hon'ble High Court of Delhi Annexure-A-1/4, sale notice Annexure-A-1/5, copy of statement of account of respondent no.3 of payment made to respondent no.1 Annexure-A-1/3, internet generated holidays of Reserve Bank of India Annexure-A-1/6, details of holidays as fixed by the Reserve Bank of India-Clearing Home Annexure-A1/7. Further, the applicant no.3 has also filed his evidence by way of affidavit of Mr. Gurpreet Singh Arora, who has exhibited the documents as copy of conveyance deed dated 30.07.1953 as Ex. Dw-3/1, copy of relinquishment deed in favour of Smt. ParamjeetKaur as Ex. Dw-3/2, copy of relinquishment deed in favour of Sh. Harvinder Singh as Ex. Dw-3/3, copy of relinquishment deed in favour of Gurpreet Singh Arora as Ex. Dw-3/4, copy of relinquishment deed in favour of Smt. PreetKaur as Ex. Dw-3/5, copy of complete chart of payment made up to 11.04.2018 as Ex. Dw-3/6, statement of account as Ex. Dw-3/7, copy of chart of payment made after 04.11.2018 as Ex. Dw-3/8, copy of order passed by Hon'ble High Court of Delhi as Ex. Dw-3/9, copy of sale notice as Ex. Dw-3/10, copy of statement of account of respondent no.3 of the payment made to respondent no.1 as Ex. Dw-3/11, copy of internet generated showing holidays in Reserve Bank of India as Ex. Dw-3/12, copy of details of holidays as Ex. Dw-3/13. Accordingly, prayed for acceptance of the S.A.

On the other hand, the respondent no.1 FI has also filed its evidence by way of affidavit of Mr. Anil Chand, Authorized Representative of the respondent bank who has exhibited true copy of authority letter as Exhibit R-1, copy of sanction letter alongwith loan agreement as Exhibit R-2, copy of demand notice alongwith postal receipts as Exhibit R-3(colly), copy of symbolic notice and newspaper publication as Exhibit R-5(colly), copy of sale notice as Exhibit R-6, copy of advance notice sent by the Court receiver to the security applicant as Exhibit R7(colly), copy of letter of confirmation dated 31.08.2018 as Exhibit R-8, copy of letters dated 10. 09.2018,12.10.2018,11.09.2018 and 13.10.2018 as Exhibit R-9, copy of sale certificate dated 30.10.2018 as Exhibit R-10, copy of order of Hon'ble High Court of Delhi as Exhibit R-11, copy of statement of account as Exhibit R-12.

Further, the respondent no.3, auction purchaser, has also filed its evidence by way of affidavit of Mr. VarunPahwa, of the respondent bank who has exhibited board resolution dated 28. 11.2018 as RW-3/1, copy of sale certificate dated 30.10.2018 as RW-3/2, copy of I.A no. 1024/2019 as RW-3/3 and statement of account as RW3/4 to 10.

FINDINGS WITH REASONS

On behalf of the applicant, the Id. Counsel vehemently contended that the auction price, i.e., the bid amount of 25% was not deposited within the stipulated period as the auction was conducted on 31.08.2018 and the same was deposited on 05.09.2018, whereas, on 04.09.2018, it was working, and on 01.09.2018, it was Saturday, but it was working and on 02.09.2018 it was Sunday and 03.09.2018 it was Janmashtami, therefore, there was clear cut violation of Rule 9(3) and 9(4) of the Security Interest(Enforcement)Rules, 2002. In support of the same, the circular dated 22.09.2018 has been placed on record. Further, it is contended that in the sale notice dated 24. 07.2018, it was clearly mentioned that the earnest money was to be deposited through DD/RTGS/NEFT. Though, 10% was deposited through the same but the compliance of rest of the 15% was not made as stated in the auction notice. Therefore, there was non-compliance of the provisions, which vitiate the entire auction proceedings. Further in the account maintained by the auction purchaser the said amount of Rs. 71,25,250/- was not available in the account on the date of the auction. Therefore, the auction cannot be sustained.

Ld. Counsel for the applicant relied upon the citation, Ha rpreetFashion(supra), Narendra Kumar Goswami(supra), R.G Housing & Infra Pvt. Ltd. (supra) and contended that 25% purchase amount was not deposited immediately, therefore, the sale auction cannot be confirmed. Further, also relied upon Vasu P. Shetty(supra) and raised the contention that Rule 9 is mandatory in nature and that provision is for the benefit of the borrower. Non-deposit of 25% of the sale price by the auction purchaser at the spot with the fall of the hammer is not mere irregularity and is mandatory in question. He also relied upon the citation of J. Rajiv Subramaniam(supra) and argued that the sale/auction effected without complying with Rule 8 & 9 would be unconstitutional therefore, null & void and if amount of auction 25% of the sale price is not deposited immediately, the property is to be put on re-auction and further, relied upon the citation, State of Bihar(supra) and contended that the statute provides to be done in a particular manner, the same should be done and no other course is permissible and while relying upon the citation, Manila) MohanlalSha(supra) argued that it is the duty of the Court to oversee the conduct of the other party and take appropriate sale and similarly, relied upon the citation Laxmi Mohan(supra). Further, the Id. counsel for the applicant also argued that the remaining auction consideration that is 75% of the total amount was also not deposited within the stipulated period of 15 days' and the enhancement of period was illegally done by the authorized officer without any delegated powers, therefore, the entire auction proceedings were totally illegal and malafide one. Accordingly, prayed for setting aside the same.

Ld. Counsel for the applicant has also relied on various citations, i.e., 'Padamvathy Vs. Authorized Officer, Dhanlaxmi Bank; 'Kanika Swami Vs. State of Uttar Pradesh; ' Harpreet Fashion Vs. Canara Bank; Narindra Kumar Goswami Vs. Rajasthan Financial Corporation; 'R. G Housing & Infra Pvt. Ltd. Vs. Union of India; 'RakeshBirani Vs. Prem Narayan Sehgal; 'Vasu P. Shetty Vs. Hotel Vandana Palace,' 'J. Rajiv Subramaniam and orsVs M. Pandiyas ; 'Ramesh Kumar Verma Vs. State Bank of India; 'State of Bihar and another Vs. JAC, Saldanha; ' Manila! MohanlalShaVs. SardarSayeed Ahmed,' 'Mrs. Laxm! Mohan Vs. Airtech Project Engineers; 'Rajesh Gems & Jewels Pvt. Ltd. Vs. Indian Overseas Bank; 'Jai KishanDassBal Chand Pamnan! Vs. Municipal Corporation of Greater Mumbal; 'Ram Kishun Vs. State of Uttar Pradesh,' 'The Authorized Officer, Indian Overseas Bank Vs Ashok Saw Mills; 'Authorized Officer Vs R. Krishnawamy; 'R. Shanmugachandran Vs. Chief Manager; 'Mathew Varghese Vs. M. Amantha Kumar and ors.; 'Rosati Vs. Taico Bank; 'Neel Enterprises Vs. State Bank of India; 'P. Mohan Vs. Indian Overseas Bank; 'VenshsivPharmaChem Pvt. Ltd. Vs. State Bank of India.'

On the other hand, the Id. Counsel for the auction purchaser vehemently contended that the provisions of the S.A is hopelessly time barred and even otherwise, it is not maintainable, as the order passed in S.A no. 294/2018 dated 20.09.2018 was never challenged. Further, the present S.A is also hit by limitation, because of the reason that the auction was conducted on 31.08.2018, whereas, the present S.A has been filed on 09.11.2018, and further, the provisions of Rule 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002, has been made for the benefit of the secured creditor and if there is any irregularity, the entire proceeding cannot be set-aside as it is a matter between the secured creditor and the auction purchaser. After the incorporation of the amendment of provisions of Rule 9(4) of Security Interest (Enforcement) Rules, 2002, the guarantor /mortgagor /borrower, has no role to play challenging the S.A on such like frivolous grounds. Further, it is contended that the money was paid, as the entire schedule has been mentioned in the affidavit filed on behalf of the auction purchaser, whereas, the firm, i.e., G.E International consists of number of persons, i.e., ChetanPahwa and his mother Mrs. Anita Pahwa, and the details of the same have been mentioned in the reply itself regarding the amount which was lying in their account. Therefore, by no stretch of imagination, it can be said that the amount of auction i.e., 25% was not deposited within the stipulated period as on 02.09.2018 and 03.09.2018, holidays were there, accordingly, the cheque given, which was presented by the secured creditor on 05.09.2018, which was never bounced. Thus, the substantive compliance of deposit of 25% was made as per the requirements. Further, it is contended that so far as the rest of the amount is concerned the same was deposited as the enhancement of the time was made by the respondent FI voluntarily, but the same was made within 3 months' from the auction and qua that, the cheques were given on the same date, i.e., on 05.09.2018. Accordingly, prayed that the present S.A is filed on false and frivolous grounds and requested for dismissing the same.

Ld. Counsel for the respondent FI stressed upon the argument that so far as, the mode of depositing the amount of 25% depositing is concerned? Admittedly, 10% was to be deposited through DD/RTGS/NEFT and rest of the 15% can be given by any mode and accordingly, the respondent no.3, i.e., the auction purchaser was declared highest bidder for a sum of Rs. 4,75,00,1000/- as the amount of Rs. 45.50 lacs, i.e., 10% of the EMD was to be deposited before the date given which scheduled for 31.08.2018 and rest of the 15% was deposited i.e., Rs. 71,25,250/- through cheque on 1. 09.2018. However, on 01.09.2018, it was Saturday and not working, whereas, on 02.09.2018 and 03.09.2018, being Sunday and Janmashthami, it was holidays, accordingly, the cheques were presented by the respondent FI on 04.09.2018, which was encashed on 05.09.2018. Therefore, being holidays, the cheque dated 1. 09.2018, was presented immediately after the continuous holidays on 04.09.2018, which was accordingly encashed. Hence, it could be said that there was substantive compliance of the auction notice. So far as the said amount of 15% to be deposited through DD/RTGS/NEFT is concerned, the same was not required, and only EMD was required to be deposited through the same, so that the efforts of FI to put the property on auction are not gone futile on the day fixed and the cheque of 15% of the amount was duly given. Therefore, argued that substantive compliance of the same was there.

Ld. Counsel for the respondent FI further contended that the rest of the amount of consideration was to be given on or before 15. 09.2018, accordingly, the cheques amounting to Rs. 50.00 lacs, Rs. 90. 00 lacs, Rs. 85.00 lacs, Rs. 51,50,750/- and Rs. 75.00 lacs dated 5. 09.2018 was duly given by the respondent no.3 to the respondent FI. However, on 10.09.2018, the extension was sought which was accordingly granted by FI voluntarily till 15.10.2018. Subsequently, one another letter dated 12.10.2018. Further, the auction purchaser sought another extension of time, which was also duly sanctioned by the respondent FI till 05.11.2018 accordingly, on 24.10.2018, as per the given schedule of payment i.e., Rs. 90.00 lacs and Rs. 85.00 lacs, whereas, on 29.10.2018, Rs. 50.00 lacs and Rs. 70.00 lacs were received by the respondent FI and lastly an amount of Rs. 51,50,470/-were received by the respondent FI on 30.10.2018 and as per Section 9(4) of Security Interest (Enforcement) Rules, 2002, the period of depositing the rest of the amount of 75% can be extended by "mutual understanding of auction purchaser as well as the secured creditor up to 3 months' i.e., 90 days" and as stated above, the amount of 75% was deposited by the respondent no.3 within the stipulated period of 3 months' as though the time was extended till 05.11.2018. Accordingly, the borrower /mortgagor/applicant herein, has no right, title & interest to challenge the same as after the amendment incorporated the word 'borrower' stand deleted and now the above said provisions of Rule 9(3) and 9(4) of the Security Interest(Enforcement)Rules, 2002, are made for the benefit of secured creditor and the time period can be extended up to three months. Thus, the same has been deposited accordingly, there is no illegality or irregularity in the actions/measures undertaken by the respondent FI with respect to the auctioning of the property and the schedule payment has been deposited within the stipulated period. Further, it is also contended that the sale certificate has been issued and the sale deed has been got registered on 05.11.2018.

Ld. Counsel for the respondent FI also contended that the applicant herein cannot challenge the previous action i.e. Section 13(2) and Section 13(4) as well as Section 14 because of the reason that the SA 294/2018 has already been dismissed and the said order has attained finality as the same has never been challenged on behalf of the applicant herein. The respondent no.3, auction purchaser, M/s PahwaBuidltech Pvt. Ltd., relied upon various citations i.e. In State Bank of India Vs. Hon'ble DRAT &Ors., 2010 (115) DRJ 304 (DB), Akron (Acron) Healthcare Pvt. Ltd. Vs. Mukesh Gupta &Ors.'' (2014) 4 BC 114 (DRAT), Shakura Prime Tanning Co. &Anr. Vs. Central Bank of India, (2007) 3 BC 7 DRAT, Singh Infotech Vs. Gurbachan Singh Cold Storage Pvt. Ltd. &ors. (2011) 1 BC 7 (DRAT), L&T Housing Finance Ltd. Vs. Trishul Developers, 2020 SCC Online SC 873. Accordingly, prayed for dismissal of the present application.

Ld. Counsel for the applicant at the first instance argued that the applicant is having right to challenge the initial actions/measure taken by the respondent FI qua declaring the account NPA and thereafter, issuance of notice under section 13(2) of SARFAESI Act, 2002 and the notice issued under section 8(1) & 9(1) of the Security Interest (Enforcement) Rules, 2002 qua publication and redemption of the property in question. In this regard, the Ld. Counsel for the respondent FI as well as auction purchaser vehemently contended that these issues have been dealt in detail in the previous SA filed by the applicant i.e. SA 294/2019 and the said order passed in that matter was remain unchallenged. Therefore, the same has attained finality. In this context, it is to be mentioned that the applicant herein filed one another SA No. 294/2018 titled, Gurpreet Singh Arora Vs. Indiabulls Commercial Credit Ltd., challenging all these issues wherein, the detailed order was passed by this Tribunal on 20. 09.2018 and the said SA was finally dismissed. The said order was never challenged on behalf of the applicant, accordingly, the same has attained finality. In the said order all these aspects were duly considered and reasoned findings were recorded therein, therefore, the applicant herein could not challenge those grounds earlier to the auction conducted on 31.08.2018 as the same were challenged in that SA which have now attained finality, therefore, those issues are hit by principle of res-judicate, but so far as the auction dated 31. 08.2018, is concerned, that is being the subsequent event, which the applicant is legally entitled to challenge on the basis of subsequent cause of action. Hence the present SA is being considered with respect to the auction proceedings conducted on 31.08.2018 onward qua whether the auction price/bid amount was deposited within the stipulated period or not which are hereby considered and the applicant hereby stand estopped to challenge the grounds which were taken in SA No. 294/2018. Hence, this point stand decided against the applicant herein.

Before embarking upon the detailed discussion, it would be appropriate to go through the Rule 9 of the Security Interest (Enforcement Rules), 2002 which are relevant for the purpose of detailed discussion in this matter as the question before this Tribunal is that whether 25% of the auction price held on 31.08.2018 can be deposited through cheques or not by the respondent no. 3 with the secured creditor i.e. respondent no. 1. The same is as under:

Rule  9(3):  On  every  sale  of  immovable  property,  the purchaser shall immediately, i.e. on the same day or not later than next working day, as the case may be, pay a deposit of twenty five percent of the amount of the sale price, which is inclusive of earnest money deposited, if any, to the authorized officer conducting the sale and in default of such deposit, the property shall be sold again;

Rule 9(4): The balance amount of purchase price payable shall be paid by the purchaser to the authorized officer on or before the fifteenth day of confirmation or sale of the immovable property or such extended period as may be agreed upon in writing between the purchaser and the secured creditor, in any case not exceeding three months.''

On the perusal of the Rule 9(4) of the Security Interest (Enforcement) Rules, 2002, as amended vide amendment dated 04.11.2016, the word 'borrower' has been stand deleted, which was existing before the amendment in the abovesaid rules and the consent for the extension of the time period was to be inter-se consent of 'auction purchaser, borrower and secured creditor.' Now, after the abovesaid amendment incorporated on 04.11.2016, the situation has been totally challenged, the word ''Auction purchaser & Secured Creditor'' are there only left and word 'borrower' stand deleted which clearly proves that these are provisions are stand for the benefit of secured creditor only and not for borrower.

Before discussing the abovesaid issue in detail, first of all, the judgment of Vasu P. Shetty (Supra) is relevant, wherein, it is laid down by the Hon'ble Supreme Court of India in para 17 is relevant is as under:

''This court, after interpreting the provisions of Rule 9, returned a categorical opinion that the said provision is mandatory in nature. It was further held that even though this Rule is mandatory, that provision is for the benefit of the borrower. The court held that it is a settled position in law that even if a provision is mandatory, it can always be waived by a party (or parties) for whose benefit such provision has been made. The provision of Rule 9(1) being for the benefit of the borrower and the provisions contained in Rule 9(3) and Rule 9(4) being for the benefit of the secured creditor (or for the benefit of the borrower), the secured creditor and the borrower can lawfully waive their rights. These provisions neither expressly nor contextually indicate otherwise. Obviously, the question whether there is waiver or not depend on the facts of each case and no hard and fast rules can be laid down in this regard.''

Now, it has to be seen whether the auction conducted on 31. 08.2018, the amount of 25% was stand deposited by the respondent no. 3 or not? In this regard, it is to be mentioned that the reserve price of the property in question was fixed as Rs. 4.75 crore and the highest bid on that date was received from respondent no.3. i.e. for Rs. 4,75,1000/- only. Admittedly, 10% amount was already stand deposited, i.e. Rs. 45.50 lacs qua EMD in the shape of DD before the date of auction. As the respondent no. 3 was declared the highest bidder, therefore, he was supposed to deposit 15% of the remaining amount, i.e. Rs. 71,25,250/-, accordingly, the cheque dated 01.09.2018 was given and the same was stand accepted on behalf of the Authorized Officer of FI.

Further, the contention of the Ld. Counsel for the applicant is that the said amount of Rs. 71,25,250/- was not there in the account of the respondent no. 3, with respect to the amount of cheque dated 1. 09.2018, and only a sum of Rs. 50,15,184.3 was there as on 31. 08.2018.  The  clearing  house  was  working  on  01.09.2018, 3. 09.2018 and 04.09.2018, thus, there was no sufficient balance in the account of the respondent no.3. Further, the respondent no. 3 received a sum of Rs. 19.00 lacs on 04.09.2018 and a sum of Rs. 40.00 lacs on 05.09.2018 which made sufficient balance on 05.09.2018. No doubt, the credit balance in the account of cheque was only Rs. 50,15,184.03, but on behalf of the respondent no. 3, the details of the account of Mr. ChetanPahwa and his mother, Mrs. Anita Pahwa has been given, wherein, sufficient amount was there apart that, the other accounts are also of sister concerns and others and on 4. 09.2018 itself 77,43,184.83 were there in the account of respondent no. 3 as apparent from the statement of account Ex. RW-3/4. Now, it has also to be seen whether the amount through cheque can be accepted or not. As per auction notice dated 24.07.2018, it is only mentioned that the earnest money would be 10% of the Reserve Price and was to be deposited through DD/RTGS/NEFT. Further, without any hesitation, the respondent no. 1 received the cheque and it was though presented on 05.09.2018. For that the responsibility of respondent no. 3 cannot be fixed because of the reason that it was the prerogative of the respondent no. 1, whether to accept the cheque or not and if the secured creditor would have insisted upon the fact that the amount should be paid only through DD, then the situation would have been different, but the respondent no. 1 voluntarily accepted the cheque of rest of the 15% of the auction price. Further, in the auction sale notice dated 24.07.2018, it was only mentioned that the earnest money, i.e. 10% of the reserve price should have been deposited through DD/RTGS/NEFT. In this regard, in view of the abovesaid judgment K. Saraswathy (dead) by LRs Vs. P.S.S. Somasundram Manu/SC/0251/1989the same relates back. In the abovesaidjudgements, it is clearly laid down by the Hon'ble Supreme Court of India, laid down as under:

"that the payment by cheque is an ordinary incident of present day life, and unless it is specifically mentioned that payment must be in cash there is no reason why payment by cheque should not be taken to be due payment if the cheque is subsequently encashed in the ordinary course. Therefore, there is nothing irregular in the auctioneers accepting a cheque especially when they were sure of the solvency of the bidder. That issuing a cheque is as good as payment in cash appears is the dicta of the judgment of a Division Bench of the Bombay High Court in Kirlosker Bros. Ltd., v. Commissioner of Income-tax(AIR 1952 Born 306) and Hon'ble Madras High Court in Mohideen Bi &Ors. vKhatoon Bi &Ors. (AIR1966 Mad 435)."

Further, the respondent no.1 not preferred to present the cheque on the same date i.e., either on 31.08.2018 or 01.09.2018 or 5. 09.2018. Had, the cheque would have been bounced, then the situation would have been different. The respondent no.1 voluntarily accepted the cheque on 05.09.2018 and it was also accordingly encashed. Further, from the bare perusal of the Rule 9(4) of the Security Interest (Enforcement) Rules, 2002, it isclear that now the borrower cannot raise such like questions because of the amendment incorporated in the said provision on 04.11.2016, the word borrower has been stand deleted and only the word 'secured creditor' as well as 'auction purchaser' has been left, whereas, prior to the amendment all the three borrowers/secured creditor/auction purchaser have to come on table to give consent to enhance time period for depositing the auction price if borrower neither joined nor given consent then the extension period could not at all be enhanced. Now, after the amendment the secured creditor at the asking of the auction purchaser may or may not enhance the time period and if secured creditor preferred to enhance the time period, then, the borrower/ guarantor/mortgagor have no right to object the same legislation. The word 'borrower' has been got deleted intentionally by the law makers, in order to facilitate the auction proceedings, otherwise, all the auctions would stand failed mere on technical errors/flaws and the public sector banks would not be able to realize the amount which the borrowers/guarantors/mortgagors are intended to delay on one ground or the other. Thus, both these provisions are benefit of the secured creditor and secured creditor can voluntarily waive the same.

Apart that, more than Rs. 50.00 lacs were lying on record the account statements of other sister concerns/directors of the respondent no.3 have been filed which clearly proves that sufficient amount was there in the respective accounts. Moreover, on 1. 09.2018, it was Saturday and on 02.09.2018 & 03.09.2018 it were holidays, though, on 04.09.2018, was working, but the respondent bank did not prefer to present the cheque on the that date and the same was presented on 05.09.2018. Therefore, the said irregularity, if any, on the part of the respondent bank was there and not on the part of the auction purchaser. Therefore, the said delay, if any, cannot be attributed to the auction purchaser that too once the respondent Fl preferred to accept the cheques voluntarily. Apart that, the applicant herein failed to prove on record that any such prejudice,loss or irreparable injury has been caused to him. In the absence of any substantial prejudice, the entire auction proceedings cannot be set-aside mere on trivial objections. Further, word 'Immediately'should be liberally construed. In this regard, reliance can be placed on citation, i.e., Singh Infotech Vs. Gurbachan Singh Cold Storage Pvt. Ltd. &Ors., (2011) 1 BC 7 (DRAT), @ Para Nos. 8-11, wherein it was held that the word "immediately" needs to be construed as meaning with all reasonable speed and the term "immediately" cannot be construed to mean "without interval of time". The construction of the word "immediately" has to be in a manner so as to not require something which is not possible to be performed.

Further, there is nothing on the record that any substantial injury or prejudice has been caused. In the absence of the same, the auction which is conducted to realize public money cannot be set-aside on trivial or technical objections. In this context reliance can also be placed on, L & T Housing Finance Ltd. vs. Trishul Developers, 2020 SCC Online SC 873, it has been held that when the action has been taken as per the procedure prescribed by law and the person affected has a knowledge leaving no ambiguity or confusion in initiating proceedings under the SARFAESI Act by the Secured Creditor, such action taken thereof cannot be held to be bad in law merely on raising a trivial objection. In the present case also, there is no substantial prejudice caused to the borrowers.

Similarly, it is also held in State Bank of India Vs. Hon'ble Debts Recovery Appellate Tribunal &ors., 2010 (115) DRJ 304 (DB) @Para Nos. 16-18, following Bachahan Devi &Anr. Vs. Nagar Nigtam, Gorakhpur &Anr., (2008) 12 SCC 372 @ Para No. 17, in the facts and circumstances therein, it was held that even in case of an irregularity which irregularity caused no damage to the mortgagor therein; it was not open to the mortgagor therein to challenge the auctionsince no injury was caused to the mortgagor therein on account of there being a technical defect in the auction notice. In State Bank of India (supra) the Hon'ble Division Bench of the Hon'ble High Court of Delhi, while upholding the sale of the secured asset therein in favour of the auction purchaser therein, was pleased to observe that it was not the case of the mortgagor therein that the mortgagor therein was in a position to redeem the mortgage as on date of finality of the proceedings before the Hon'ble High Court of Delhi.

Moreover, there was only a single bidder and as no other bidder has come forward and the applicant has failed to prove on record that any substantial prejudice has been caused by receiving the amount on 05.09.2018 qua cheque dated 01.09.2018 by the respondent bank. Therefore, the citations referred by the Id. Counsel for the applicant are not helpful to the application in the given facts. Hence, there is no force in the contentions raised by the Id. Counsel for the applicant that the entire auction has to go, on the ground, the bid amount of 25% was not deposited within the stipulated time. Accordingly, the same stand rejected. Accordingly, it is held that the cheques dated 01.09.2018 of 15% amount, which was accepted and got encashed on 05.09.2018 by the respondent no.3 is substantial compliance of Rule 9(3) and Rule 9(4) of Security Interest (Enforcement) Rules, 2002 and no prejudice caused to the applicant, hence, this issue also stand decided against the applicant.

The Hon'ble Supreme Court in Vasu P. Shetty(supra) also laid down that the said provisions are for the benefit of the borrower, but with due respect, it is being submitted that the abovesaidjudgements were passed on 22.04.2014 and by that date Rule 9 was not amended and the amendment was incorporated on 11.11.2016, whereby, the word 'borrower' from Rule 9(4) has been stand deleted. It is also pertinent to mention that Rule 9(1) & 2 are made for the benefit of theborrower/guarantor/mortgagor, whereas, the rest of the provisions are for the benefit of the secured creditor. Therefore, now, the said provision is not stand left for the benefit of the borrower, rather the secured creditor has been given the liberty to waive the same. So far as, deposit of the 25% amount is concerned, whether the due amount of that 15% has been deposited appropriately or not as it already discussed, the secured creditor was given the cheque dated 01.09.2018, but FI did not prefer to present the same till 05.09.2018, therefore, the said act on the part of the respondent FI cannot be attributed to auction purchaser, who had duly handed over the said cheques on the same date and it was dated 01.09.2018 and the same also got encashed on 05.09.2018.

Now, it has to be seen whether the rest of the 75% of total auction consideration was stand deposited within the stipulated period or not? In this regard, it is to be submitted that the rest of the amount of Rs.71,25,250/- was to be deposited and the respondent no.3 has given five cheques amounting to Rs. 50.00 lacs, Rs. 90.00 lacs, Rs. 51.50 lacs, Rs. 470 lacs and Rs. 75.00 lacs. However, on 10. 09.2018 & 12.10.2018, letters were written on behalf of the respondent no.3 to the respondent no.1 for extension of time, which were duly accepted by FI, accordingly, on 11.09.2018 & 13.10.2018, the time was extended till 15.10.2018 & 05.11.2018 respectively. Thereafter, one another letter was written by the respondent no.3 on 3. 10.2018 and the extension was accordingly sought, which was extended by the respondent no.1 till 05.11.2018. In the meantime, cheques amounting to Rs. 90.00 lacs and Rs. 85.00 lacs were got encashed by the respondent no.1 on 24.10.2018, whereas, another amount of Rs. 50.00 lacs and Rs. 75.00 lacscheques were presented which were encashed on 29.10.2018 and finally an amount of Rs. 51,50,470/- was also received by the respondent no.3 on 30.10.2018 as per the provisions of Rule 9(4) of Security Interest (Enforcement) Rule, 2002, the time can be extended by the mutual consent of the auction purchaser& secured creditor. As the respondent no.3, auction purchaser, made a written request to the respondent no.3 vide letter dated 10.09.2018 & 12.10.2018, accordingly, the same were accepted on both the occasions and the time was extended till 5. 11.2018 i.e., within the period of 3 months as laid down under Rule 9(4) of Security Interest(Enforcement) Act, 2002. The remaining amount consideration of 75% stand received by the respondent no.1 before 05.11.2018. Hence, there is no ambiguity in the same as the time period can be extended by the secured creditor up to three months' as laid down in Rule 9(4) of Security Interest (Enforcement) Rules, 2002. Further, the situation before the amendment incorporated on 04.11.2016 was different. Hence, there is no ambiguity or illegality has been committed by the respondents in enhancement of the time for depositing the rest of 75% amount of auction consideration from 15 days' to 05.09.2018. hence, the respondent no.1 rightly received remaining amount of 75% from the respondent no.3 within that extended period which was prescribed under abovesaid rules.

Further, on behalf of the applicant, Id. Counsel also argued that in the auction notice dated 27.07.2018, it was nowhere mentioned that the enhancement of time for depositing the remaining sale consideration of 75% could be done by the FI. Had, this condition would have been mentioned, then more bidders would have come forward. Therefore, in the absence of such a clause, the enhancement could not be made by the FI up to 05.11.2018, therefore, the said enhancement of time was also totally illegal and malafideono on the part of FI. In this regard, it is to be submitted that once the Rule 9(4) of Security Interest(enforcement) Rules,2002 has been amended and by virtue of that, the enhancement of period for depositing the remaining sale consideration can be done at the discretion of the secured creditor for a period of three months and beyond that, the same cannot be enhanced. Hence, the provision of Security Interest Rules should prevail over the e-auction notice.Thus, the said argument has no force, accordingly, the same stand discarded.

Apart that, it is also argued that the enhancement of time for depositing the remaining auction price i.e., 75% could not be done by the Authorized Officer in individual capacity and for that purpose, the Resolution of the Board must have been there, which is not proved on the record, hence, the enhancement of period even otherwise on the part of Authorized Officer individual was wrongful. There is no such condition that the Authorized Officer is not entitled to enhance the time period for depositing the remaining auction consideration beyond 15 days without the consent of the higher authorities. Had, the authorized officer would have enhanced the time at its own, then, certainly the department would have taken action against him. No such record is on the file, therefore, the applicant herein cannot say that the authorized officer was not entitled to enhance the time that too in the absence of such any evidence on record to show that the consent of the Board was mandatorily required. Thus, the applicant failed to prove on record any such document to substantiate his arguments. Therefore, the said argument of the Id. Counsel for the applicant is also out of place, accordingly, the same also stand rejected.

Now, so far as, the bid amount of multiple of Rs. 50,000/- is concerned. No doubt, the respondent no.3 has given a bid for a sum of Rs. 4,75,1000/- but it is a matter of fact that the respondent no.3 was the sole bidder and no other bidder has participated in the said auction. Had, some other bidders would have come to participate, then the inter-se bid, then the difference in each bid should have been further multiplied by Rs. 50,000/-. Therefore, mere that the auction purchaser given bid by enhancing the reserve price by Rs. 1,000/-, it could not be said that the bid is illegal as the same was not being multiple of Rs. 50,000/-. Hence, there is no force argument raised by the Id. Counsel for the applicants. Thus, this Tribunal is of the view that the respondent no.3 was rightly declared as highest bidder.

Ld. Counsel for the applicant also argued that the auction notice was not proper, as the same consists of ground plus two floors and whereas, in the sale notice, nowhere, it was described and the process which has been undertaken by the bank without giving the dimensions is totally null & void and also relied upon the citation 'JalKishanDassBal Chand'(supra). Further, it is also contended that the notice under Section 8(6) was not given, the time period of 30 days', where the publication was required to be effected in terms of Rule 8(6) and also relied upon the citation P. Mohan(supra). Therefore, the entire auction has to be set-aside on the ground of non-compliance of Rule 8(6) and 13(8) of SARFAESI Act. The applicant herein failed to prove on record that the market price of the property-in-question was much more than that for which the reserve price has been fixed. No such valuation report has been filed on record to substantiate that argument. Further, no bidder, if interested in participating in auction proceedings would prefer to purchaser the same unless he has not actually visited the spot/property-in-question. Thus, unless some cogent and convincing evidence qua the higher valuation of the property-in-question has not been come forward from the side of the applicant it could not be presumed that the respondent FI had put the property on auction by fixing a lower price and that was the reason to suppress the entire description of the property- in question. This is also not a case of the applicant that the valuation of the property-in-question has been obtained by the applicant by suppressing the floors i.e., on misdescription of property. The facts & circumstances appeared herein are different from the citations referred above by the applicant therefore the same are not helpful to him. Thus, in view of the abovesaid findings recorded, I am of the view that there is also no force qua that argument raised on the part of the applicant, accordingly the same also stand discarded.

In sequel of the abovesaid discussion, this Tribunal is of the view that there was no illegality or perversity in the auctions/measures of the respondent FI qua taking the actual & possession of the property-in-question and thereafter, selling the same by way of auction conducted on 31.08.2018.

Resultantly, finding no merits in the present S.A. the same stands dismissed, without no order to costs. However, the respondent no.3, auction purchaser is also hereby directed not to alienate or to change the nature of the property-in-question in any manner, till the expiry of the prescribed period of limitation for filing the appeal against the present order and in case of any appeal, the same shall be subject to the order of the Hon'ble Higher Authority, as the case may be.

Files be consigned to records."

The impugned order shows that learned DRT has considered violation of Rule 9(3) in correct perspective. It has not considered the effect of 15% of the bid amount by way of a cheque which is not permissible. It has also not considered the effect issuing a confirmation letter dated 31.08.18 confirming payment of 15% when admittedly that cheque was presented for encashment on 4. 9.18 and was encashed on 4.9.18 thus confirming the auction without receipt of payment of 25% payment in full on 31.8.18 or even on 1.9.18. DRT did not notice these fundamental defects in payment of 25% which go to the root of the matter and which proved apparent collusion between the authorized officer and respondent no.3. DRT should have set aside the auction sale in favour of respondent no.3.

Thus this appeaL is liable to succeed on the short ground that the mortgaged property has been sold by the authorized officer in gross violation of the Rule(3) and in collusion with the respondent no.3.

10 This appeal, therefore. Is allowed and the impugned order of DRT is set aside. The auction held on 31.08.2018 consequently is set aside. The auction purchaser will surrender the possession of the property sold to it within ten days failing which the respondent no.1 is directed to take possession. If there is any resistance offered by the auction purchaser the respondent no.1 will be at liberty of seek assistance from the DRT which will render full assistance in ensuring implementation of the direction of this Tribunal. It will be open for the auction purchaser to approach the respondent no.1 for refund of 75% of the auction money since as a consequence of the finding that it was a collusive auction the EMD amount shall stand forfeited and will be appropriated in the borrowers' account.