Sunil And Ors vs State Bank Of India And Ors.

S. Ravi Kumar, J

This appeal is preferred against order dated 3rd December, 2007 in Appeal No. 6/2007 on the file of Debts Recovery Tribunal, Aurangabad (DRT).

Before proceeding with the matter it is necessary to mention here that this appeal was dismissed on 19th August, 2010 for default. Thereafter appellant herein filed M.A. No. 750/2011 and M.A. No. 751/2011 one for condonation of delay in filing restoration application and the other for restoration of the appeal and those petitions were dismissed by this Tribunal on 27th December, 2011. Against the said order appellant filed Writ Petition No. 378/2012 before the Hon'ble High Court of Bombay, Bench at Aurangabad and the High Court rejected the said writ petition vide order dated 13th January, 2012. The appellant approached Hon'ble Supreme Court by filing Civil Appeal No. 3549 of 2015 and the same is ordered on 13th April, 2015 with a direction to decide the Appeal on merits and thereafter the Appeal was restored on 29th June, 2015 and taken up for hearing.

Respondent-Bank filed Original Application (O.A.) No. 29/2004 for recovery of money and that was allowed and a Recovery Certificate (R.C.) was issued on 13th January, 2004, according to which a sum of Rs. 13,53,713.40 with future interest @ 12% p.a. with yearly rests from 1st August, 2004 has to be recovered from the judgment debtor. The decree holder Bank filed Recovery Proceeding (R.P.) No. 80/2004 on the basis of said R.C. and the property in question i.e. residential house at Sub-Plot No. 2 of Plot No. 66, Survey No. 31/2, Kothi Road, Ahmednagar, admeasuring 5,022 sq. ft. together with construction thereon was put for auction as per sale notice dated 1st March, 2007. The Recovery Officer fixed sale scheduled at 14.30 hours on 5th April, 2007. On 4th April, 2007 one of the judgment debtors, second appellant herein, filed application with a request to place the matter on board. Accordingly matter was placed and the application (Ext. 28) filed by appellant herein was taken up for hearing on the same and request of applicant was considered and the sale was postponed to 17th May, 2017 at 14.30 hours on the condition that the judgment debtors therein i.e. appellants herein have to deposit Rs. 2 lacs by 23rd April, 2007 and the balance amount as per the recovery certificate within a period of 30 days, with a direction to the decree holder Bank to publish a corrigendum by bringing the name of second appellant herein also as joint owner of the property, with a further direction that the offer received from Mrs. Rakhee Sourabh Bora which is kept on record to be opened on 17th May, 2007. Thereafter on 17th May, 2007 as the appellants herein have not deposited initial amount of Rs. 2 lacs and the balance R.C. amount within 30 days, it was ordered that the auction sale postponed till 17th May, 2007 shall now be conducted on 18th May, 2007 at 14.30 hours by keeping offer of Mrs. Rakhee Sourabh Bora open along with any other offers received till 13.30 hours on 18th May, 2007 in order to fetch maximum amount. On 18th May, 2007 as no other bidders have come forward, bid offered by the sole bidder Mrs. Rakhee Sourabh Bora was enhanced from Rs. 45,45,000/- to Rs. 48,01,000/- on negotiations and finally at that price the sale was knocked down in favour of Mrs. Rakhee Sourabh Bora by passing a detailed order dated 18th May, 2007.

Appellants challenged order dated 18th May, 2007 before learned Presiding Officer, DRT, Aurangabad, in Appeal No. 6 of 2007. The learned P.O. on a consideration of material and submissions of both sides, discharged the objections of the appellants and dismissed the appeal, aggrieved by which present Appeal is preferred.

It is not in dispute that appellants herein are guarantors for the loan transactions and R.C. issued in favour of the Bank became final. Entire argument of the learned Counsel for the appellants is that property is worth of more than Rs. 90 lacs but it was sold for Rs. 48.01 lacs without following due procedure. Other contention of appellants is that the total amount due as on the date of the sale is around Rs. 13 lacs and by selling part of the property the same can be realized, but the R.O. without following procedure has put entire property for sale, therefore, order of the R.O. dated 18th May, 2007 is illegal. It is further submitted that same aspect was agitated before DRT but it refused to look into the matter on the ground that sale is confirmed. According to appellants Tribunal below committed error and the said order is liable to be set aside. Advocate for appellant further submitted that appellants deposited a sum of Rs. 12 lacs as per direction of the Hon'ble Supreme Court and that amount would almost discharge liability of the appellants.

On the other hand, Advocate for respondent No. 3 submitted that when the sale was originally fixed on 5th April, 2007 was postponed only on the request of appellants to 17th May, 2007 to enable them either to discharge the liability or to secure purchasers, but the appellants have not utilized that opportunity. It is further submitted that remedy of the appellants is to file application under Rules 60 and 61 of the Second Schedule to Income Tax to challenge the sale, but no such application is filed and entire submissions are based on assumptions and presumptions. It is further submitted that sale was postponed to 17th May, 2007, but it was not conducted on that date and it was again postponed to 18th May, 2007 giving chance to receive further offers till 1.30 p.m. on 18th May, 2007 and the appellants by that time were aware of the reserve price fixed for property and if really it was undervalued nothing prevented them to raise that objection in writing with proper material showing the valuation of the property, or at least they should have produced their own bidders who are willing to purchase property at higher price. It is submitted that appellants having not availed the remedy are not entitled to question the order dated 18th May, 2017. It is further contended that appellants without filing a application to set aside the sale after fulfilling conditions required under Rules 60 and 61 of the Second Schedule to Income-tax Act, adopted this method to overcome fulfilment of conditions, therefore, such attempt cannot be entertained.

I have perused material papers and the order of the R.O. dated 5th April, 2007, 17th May, 2007 and 18th May, 2007 coupled with application of the appellants dated 4th April, 2007 and say of the respondent-Bank to the said application. A combined reading of these papers would reveal that R.O. in execution of the R.C. put the residential house for sale through notice dated 1st March, 2007 fixing date of sale as 5th April, 2007. One of the appellants herein moved application on 4th April, 2007 for urgent hearing which was considered and thereby application on 4th April, 2007 of the appellants was taken up for hearing. It is stated in their application that the property was owned jointly by the appellants herein but the name of the second appellant herein is not reflected in the sale notice and publication was made in newspapers as if there is only one owner and, therefore, it is a substantial error for conducting sale. Appellants herein ultimately prayed for postponement of auction dated 5th April, 2007 and prayed for re-publication of the notice by including name of second appellant herein. From a perusal of the order dated 5th April, 2007 it is clear that at request of appellants the sale was postponed to 17th May, 2007 directing the Bank to publish corrigendum by bringing name of other owner also. So both the reliefs claimed in the application were granted and thereafter Bank published corrigendum and brought name of other owner also and the sale was postponed to 17th May, 2007. In fact this relief was granted with a condition to make deposit of Rs. 2 lacs, but the appellants have not complied with the said condition but enjoyed the reliefs firstly sale proposed to be conducted on 5th April, 2007 was not materialized and postponed to 17th May, 2007. Secondly corrigendum as requested was published. Even on 17th May, 2007 also R.O. has not proceeded with the sale and gave another opportunity for further offers by postponing it by another date since out of the 2 bidders one bidder has withdrawn from the contest. As no further bids have been received on 18th May, 2007, R.O. proceeded with the matter and in fact after negotiations with the sole bidder, offer was enhanced from Rs. 45,000/- to Rs. 48,01,000/- which is Rs. 3 lacs more than the reserve price and then knocked down the bid in favour of sole bidder. From 4th April, 2007 the appellants were within the knowledge of these events including the reserve price fixed. They have not filed any objection either on 5th April, 2007 when the matter was on the Board and the order is passed or on day subsequent to 5th April, 2007 or on 17th May, 2007 on which date further opportunity was given to the appellants. Only, accepting the bid of Mrs. Rakhee Sourabh Bora, they approached DRT on 29th June, 2007 raising objection with regard to valuation etc. As rightly pointed by Advocate for respondent, once the sale is concluded and bid in favour of successful purchaser is confirmed, thereafter remedy of the appellants is to file an application to set aside such sale under the grounds available as per Rules 60 and 61 of the Second Schedule to Income Tax Act. Admittedly no such steps are taken. The learned P.O. considered all these aspects and rightly rejected the request of the appellants herein. As rightly pointed by Advocate for respondent, appellants have not produced any material to show that property is under-valued and entire arguments are based on assumptions and presumptions, Advocate for appellants relied on decision of the Hon'ble Supreme Court in Ambati Narasayya v. M. Subba Rao, I (1991) BC 169 : 1989 (SLT Soft) 286 : AIR 1990 SC 119 (1), for the proposition that a duty is cast upon the Court under Order XXI Rule 64 of CPC to sell only such property or a portion thereof as is necessary to satisfy the decree to support their contentions. R.O. ought to have sold part of the property to realize the decretal amount. When the appellants moved for postponement of sale they have not taken any such objection, nor came forward with proposal identifying part of the property which can meet for realisation of the decretal amount. When appellants have not objected for sale of entire property when they sought for postponement of sale and not raised this objection either on 5th April, 2007, 17th May, 2007 or on 18th May, 2007, they cannot be allowed to contend now that too without showing which part of property would meet decretal amount. So this decision would in no way helpful to the appellants. Advocate for appellants also relied on decision of Hon'ble Supreme Court in S. Mariyappa (Dead) by LRs v. Siddappa, 2004 S.T.P.L. (L.E.) 35807 (SC), for the proposition when Executing Court has not observed its statutory duty, sale has to be set aside. When the appellants have not filed any application for setting aside the sale by availing remedy under Rules 60 and 61 of the Second Schedule to Income tax Act, this decision is no way helpful to them as it only speaks about power of the Tribunal to set aside the sale. Advocate for appellants also relied on decision of the Hon'ble Supreme Court in Takkaseela Pedda Subba Reddi v. Pujari Padmavathamma, 1977 (SLT Soft) 131 : AIR 1977 SC 1789, for the proposition that part of the property which can satisfy decree can be sold and it is manifest on the person conducting sale to examine these aspects. In that case two items were put for sale and as per facts of that one item is sufficient to realize the decretal amount even as per sale proclamation itself, therefore, auctioning second item was declared as invalid. But here in the present case, there are no such two items put for sale and even the appellants have not placed any material to show that which part of the property is sufficient to realize the decretal amount, therefore, this decision is also not helpful to the appellants. In other words, all the principles laid down in above referred 3 decisions can be applied provided there is material pleaded and proved by the appellant. But here the appellant except relying on these decisions neither pleaded nor placed facts attracting those principles. Therefore, these decisions are not helpful to the appellants.

On a scrutiny of the material, it is clear that the sale was confirmed in the year 2008 and possession of the property was delivered to the auction purchaser and appellants have not availed their remedy for setting aside the sale. For these reasons, I am of the considered view that Tribunal below has not committed any error in rejecting the appellant's Appeal and that Appeal is devoid of merits. Therefore, appeal is dismissed with no order to costs.

All Miscellaneous Applications, if any, are dismissed as infructuous.