UCO Bank vs Madhusudan Milk Products (P.) Ltd. And Ors.

J.M. Malik, J

This order shall decide the abovesaid two appeals directed against the very same order rendered by the learned trial Court on 18.5.2010 in S.A. No. 2/2005.

The first appeal has been preferred by UCO Bank. In this appeal, the auction purchasers of the property in question were not arrayed as parties, it appears that when this appeal was filed, only the parties to the S.A. filed by M/s. Madhusudan Milk Products (P) Ltd., were made parties to this appeal. However, the auction purchasers themselves, namely, Mr. Praveen Kumar and Mr. Abhishek Jain, have filed an appeal against the same order, which is the second appeal.

Mrs. Sushila Bajaj is one of the directors of M/s. Madhusudan Milk Products (P) Ltd., respondent No. 1 in the first appeal filed by the Bank. She is also the proprietor of M/s. Maruti Enterprises, respondent No. 2 in the first appeal. Mr. Sumit Bajaj and Mr. Sandeep Bajaj are also the directors of M/s. Madhusudan Milk Products (P) Ltd. They are nephews of Mrs. Sushila Bajaj. M/s. Madhusudan Milk Products (P) Ltd. is the owner of the property bearing No. F-17-A-1, Malviya Industrial Area, Jaipur by virtue of lease deed dated 22.3.1994 granted by Rajasthan State Industrial Development and Investment Corporation Ltd. (RIICO). Vide resolution dated 20.6.2001, the Board of M/s. Madhusudan Milk Products (P) Ltd. authorized its director Mrs. Sushila Bajaj to mortgage the above said properly of the Company and avail loan facilities from UCO Bank, appellant in the first appeal. Smt. Sushila Bajaj mentioned the address of the property sought to be mortgaged as F-17-A, Malviya Industrial Area. On 1.7.2011, she applied to UCO Bank for CC Limit in the sum of Rs. 25 lakh and offered the above mentioned property as collateral security and personal guarantee of her husband Mr. Suresh Bajaj. On 4.7.2001, she deposited the original title deeds of the above said property in order to create equitable mortgage. The said loan facility was sanctioned in favour of M/s. Maruti Enterprises, Agarwal Market, Mishra Rajaji Ka Rasta, Jaipur. M/s. Maruti Enterprises failed to maintain fiscal discipline and the loan account became bad. Consequently, the account was classified as NPA and a notice dated 15.9.2003 under Section 13(2) of the SRFAES1 Act was issued by. the Bank to M/s Maruti Enterprises through its proprietor Mrs, Sushila Bajaj, asking her to pay outstanding amount of Rs. 30,24,635.23 as on 31.5.2003. Since the needful was not done within 60 days, therefore, the physical possession of the mortgaged property was taken over on 7.8.2004. Subsequently, the Bank proceeded to auction the property and auction sale notice dated 4.12.2004 was published in the newspapers 'Hindustan Times' and 'Rajasthan Patrika'. The date of auction was 11.1.2005.

On 6.1.2005, M/s. Madhusudan Milk Products (P) Ltd. filed an application before the learned DRT, Jaipur under Section 17 of the SRFAESI Act, challenging the auction sale on the ground, inter alia, no notice under Section 13(2) of the SRFAESI Act had been served upon it and that the property was wrongly described as F-17-A, Malviya Industrial Area, Jaipur. The DRT granted interim order in favour of the M/s. Madhusudan Milk Products (P) Ltd. However, the interim order stood vacated vide order passed by the learned DRT on 7.2.2005 and the Bank was permitted to proceed with the auction sale of the mortgaged property. The auction notice was again published in the newspapers 'Hindustan Times' and 'Rajasthan Patrika' on 15.10.2005 and the property was auctioned at Rs. 20.51 lakh to Mr. Praveen Kumar and Mr.Abhishek Jain, father and son, whose bid was declared to be the highest. The sale certificate was issued on 2.1.2006 and it was registered with the Sub-Registrar on 16.12006.

It is pertinent to mention here that the auction purchaser were not made parties to the S.A. proceedings before the learned DRT. The learned DRT, vide the impugned order dated 18.5.2010, in the absence of the auction purchasers, held that the measures taken by the Bank under Section 13(4) of the SRFAESI Act stood vitiated and were illegal as notice under Section 13(2) of the said Act had not been served upon M/s. Madhusudan Milk Products (P) Ltd. It was also held that the address mentioned in the notice under Section 13(2) of the SRFAESI Act was incorrect as therein it was mentioned as F-17-A, Malviya Industrial Area instead of correct address of F-17-A-1, Malviya Industrial Area, The auction sale was quashed and the Bank was directed to restore the possession of the premises in question to M/s. Madhusudan Milk Products (P) Ltd., within a week and also to pay costs of Rs. 5,000/-.

I have heard the Counsel for the parties. The first legal jangle which falls for consideration is whether the notice under Section 13(2) of the SRFAESI Act was served at the correct address by the Bank? The learned Counsel for M/s. Madhusudan Milk Products (P) Ltd. vehemently argued that the address mentioned in the notice under Section 13(2) of the SRFAESI Act was incorrect. It was argued that the correct address is F-17-A-1, Malviya Industrial Area, Jaipur. He also invited the attention of the Court towards the fact that the learned trial Court passed this order on the admission made by the Bank. The relevant portion of the impugned order runs as follows:

4.... But, in this regard it is pertinent to mention herein that first of all this notice was issued at F-17A, Malviya Industrial Area, Jaipur. This address admittedly is not the address of the applicant as has been admitted by the non-applicant Bank itself. In its reply dated 21.2.2005 at page 8 in para F replied to the grounds, the Bank has made the following averments-- "The Property marked as F-l 7A is not owned by M/s. Madhusudan Milk Product (P) Ltd. The Bank has taken the possession of the property marked as F-17A/1 and it has put locks thereon. It comprise land measuring 973 sq. mtrs. And a building thereon, whereas a property marked as F-17-A belongs to someone else and not to M/s. Madhusudan Milk Products (P) Ltd.

For a variety of reasons I am unable to endorse the finding recorded by the learned trial Court. The learned DRT has not made any attempt to clarify as to whom the property bearing No. F-17-A belonged to and in whose possession it was. From the pleadings and documents submitted by M/s. Madhusudan Milk Products (P) Ltd and M/s. Maruti Enterprises, this property appears to be one and the same. If this property belonged to somebody else, his name should have come to light. The documents filed by these respondents themselves go to reveal that this property is the same. To top it all, there is the certificate dated 18.2.2000 issued by Rajasthan Financial Corporation, the contents of which are reproduced as follows:

TO WHOMSOEVER IT MAY CONCERN

This is to certified that there is No balance outstanding in the term loan a/c No. 5256 of M/s. Madhusudhan Milk Products (P) Ltd., Plot No. F-17(A), Malviya Industrial Area, Jaipur. However, this is subject to any discrepancy shown by computer and audit, if any, the same would be deposited by loanee.

This certificate is being issued on the request of the party.

Sd/- DY. MANAGER (FIN)

The absence of the numeral "1" after F-17(A) in the address given is conspicuous in this certificate. It appears that this plot is the same very plot and not a different one.

Mrs. Sushila Bajaj, the director of M/s. Madhusudan Milk Products Private Limited, herself produced certified true copy of the resolution passed in the Board Meeting held on 20.6.2001 at the Registered Office of the Company. The said certified copy of resolution is a very significant document and the same is reproduced as follows:

MADHUSUDAN MILK PRODUCTS PRIVATE LIMITED

F-17-A, MAL VIA INDUSTRIAL AREA, JAIPUR

CERTIFIED TRUE COPY OF RESOLUTION PASSED IN THE BOARD MEETING HELD ON 20.6.2001 AT THE REGISTERED OFFICE OF THE COMPANY.

Resolved that :

(1) The Company do hereby deposit the original title deeds of property situated at F-17-A Malvia Industrial Area, Jaipur and give consent to UCO Bank, Jaipur to retain the said title deeds to secure the working capital limits of Rs. 25.00 lacs sanctioned and granted to M/s Maruti Enterprises, Agarwal Market, Mishra Rajaji Ka Rasta, Jaipur

(2) The Director Mrs. Sushila Bajaj be and is hereby authorized to give consent on behalf of the company.

(3) The director Mrs. Sushila Bajaj be and is hereby authorized to deposit the title deeds of the company.

(4) The director Mrs. Sushila Bajaj be and is hereby authorized to state on behalf of the company that the title deeds being deposited with the Bank are only documents of title relating to said immovable properties and the company has a clear and marketable title to the said immovable properties.

(5) The company do file the requisite particulars relating to registration of charge in connection with the said mortgage on deposit of title deeds in favour of Bank with the Registrar of Companies within the time prescribed by law therefore.

(6) Copies of resolutions certified to be true copies by the director of company be furnished to Bank and they be requested to act thereon.

CERTIFIED TRUE COPY

Sd/-

DIRECTOR

Mrs. Sushila Bajaj also filled up and signed Form No. 8. It bears her signature as, director of M/s. Madhusudan Milk Products (P) Ltd. along the seal of the company. Para 3 of the said form runs as follows:-

Short particulars of the property charged. If the property acquired is subject to charge, date of acquisition of property should be given

1-Equitable mortgage over the land and building of the company situated at F-17-A, Malviya industrial Area Jaipur

Likewise, she also furnished Form No. 13, wherein the contents of para 3 is the same as that of Form No. 8.

It is also noteworthy that in the index sheet of S.A. No. 2/2005 filed M/s. Madhusudan Milk Products (P) Ltd. before the DRT, it had given its address as "M/s. Madhusudan Milk Products (P) Ltd., F-17-A, Malviya Industrial Area, Jaipur - 302017". Again, in the first page as also in para 5(a) of the S.A., the same address has been mentioned. In para 5(g) and in relief column, too, the address given is the same.

In another abstract of the Minutes of the Board of Directors of Madhu Sudan Milk Products (P) Ltd. held on 16.8.2004, signed by Mr. Sandeep Bajaj, Director also mentions the address of their property as F-17-A, Malviya Industrial Area, Jaipur- 302 017.

Notice was also sent to M/s. Madhusudan Milk Products (P) Ltd., F-17-A, Malviya Industrial Area, Jaipur on 26.3.2004 which was received by somebody there. Since all these addresses were furnished on behalf of M/s. Madhusudan Milk Products (P) Ltd. and M/s. Maruti Enterprises themselves, they are estopped from raising any contrary plea at this stage. The above said documentary evidence puts the case of the Bank in an impregnable position, Again, it is well known axiom of law that men may tell lies but the documents cannot.

However, I find exiguous force in the argument urged by the learned Counsel for M/s. Madhusudan Milk Products (P) Ltd. that, as a matter of fact, Mrs. Sushila Bajaj, the aunt of Mr. Sumit Bajaj and Mr. Sandeep Bajaj. has committed fraud. The Counsel for M/s. Madhusudan Milk Products (P) Ltd. argued that the copy of the resolution submitted by Mrs. Sushila Devi is a fabricated one. He vehemently argued that M/s. Madhusudan Milk Products (P) Ltd. has nothing to do with M/s. Maruti Enterprises. He displayed his surprise as to how the property belonging to M/s. Madhusudan Milk Products (P) Ltd. could be sold/auctioned for the recovery of a debt owed by another firm. He contended that despite its not being a borrower or a guarantor, its property stood sold.

All these arguments are stated for their outright rejection. The mortgage was created in the year 2001. The documents were handed over to the Bank on 4.7.2001. The S.A. by M/s. Madhusudan Milk Products (P) Ltd, was filed in the year 2005. The learned Counsel for M/s. Madhusudan Milk Products (P) Ltd. fairly conceded that either Mr. Sumit Bajaj or Mr. Sandeep Bajaj has not initiated any action against Mrs. Sushila Bajaj, their aunt, for the fraud alleged to have been committed by her. The Counsel also conceded that Mr. Sumit Bajaj and Mr. Sandeep Bajaj have paid no heed to the advice given by him to make a complaint against Smt. Sushila Bajaj in this context. It is, therefore, clear that Mr. Sumit Bajaj and Mr. Sandeep Bajaj, directors of M/s. Madhusudan Milk Products (P) Ltd., were working in cahoots with their aunt, Mrs. Sushila Bajaj. The cat is out of the bag. In case she had stolen or misused their title deeds or had fabricated the resolution of the company, some action from their side should have been taken. In its absence, the position does not begin to jell and an integument of doubt envelops the intentions and conduct of Mr. Sumit Bajaj and Mr. Sandeep Bajaj. This is but clear that they are working hand in glove with their aunt.

This is an indisputable fact that their aunt had deposited the documents with the Bank on 4.7.2001. The respondent No.1 filed the S.A. in the year 2005. They did not lodge any complaint or even gave the legal notice to their aunty till date. No explanation, whatsoever, is coming forward. The respondent No. 1 has failed to explain why did their title deeds remain in possession of Mrs. Sushila Bajaj or Bank for such a long time. It further fortifies the presumption that the nephews were working in league with their aunt.

The next submission made by the learned Counsel for M/s. Madhusudan Milk Products Ltd. was that the Bank had failed to carry out publication in the vernacular language, which is a mandatory requirement as per Sub-rules (1) and (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002. In order to bring his point home, the learned Counsel has placed reliance on a judgment of the Hon'ble Orissa High Court in Swastik Agency and Others v. State Bank of India, Bhubaneswar and Others, : AIR 2009 Ori 147. In that case, the auction was set aside for various reasons; one of them being that the publication of notice was not made in the vernacular language. However, the most pertinent question is whether the provisions of Rule 8(1) and (2) of the Security Interest (Enforcement) Rules, 2002 were complied with by the Bank or not. It is an indisputable fact that the publication of notice regarding sale was effected in two newspapers, namely, 'The Hindustan Times' and 'RajasthanPatrika'. The 'RajasthanPatrika' is a Hindi daily. However, the publication was effected in English language in both the newspapers.

On the other hand, the Counsel for the Bank and the Counsel for the auction purchasers vehemently argued that this is an irregularity which has not resulted in substantial injury. They have invited the attention of this Court towards a number of authorities in this regard. First of all, they cited the celebrated authority reported in Saheb Khan v. Mohd. Yousufuddin and Others, : IV (2006) SLT 208=11 (2006) CLT 324 (SC)= (2006) 4 SCC 476, wherein it was held:

We are unable to sustain the reasoning of the High Court. Order 21 Rule 90 of the Code of Civil Procedure allows, inter alia, any person whose interest are affected by the sale to apply to the Court to set aside a sale of immovable property sold in execution of a decree on the ground of "a material irregularity or fraud in publishing or conducting the sale. Sub-rule (2) of Order 21 Rule 90 however places a further condition on the setting aside of a Court sale in the following language--

90(2) No sale shall be set aside on the ground of irregularity or fraud in publishing or conducting it unless, upon the fact proved, the Court is satisfied that the applicant has sustained substantial injury by reason of such irregularity or fraud.

Therefore, before the sale can be set aside merely establishing a material irregularity or fraud will not do. The applicant must go further and establish to the satisfaction of the Court that the material irregularity or fraud has resulted in substantial injury to the applicant. Conversely even if the applicant has suffered substantial injury by reason of the sale, this would not be sufficient to set the sale aside unless substantial injury has been occasioned by a material irregularity or fraud in publishing or conducting the sale (See Dhirendra Nath Gorai v. Sudhir Chandra Ghosh, JaswantlalNatwarlal Thakkar v. Sushilaben ManilalDangarwala and Kodiyala Rama Rao v. Gutala Kahna Rao.)

In any event respondent 1 has been unable to establish that he had suffered substantial injury by reason of any irregularity or fraud. The lack of notice under the Partition Act, 1893 to respondent 1 was immaterial as it was not the respondent's case that he would have purchased the property. No such intention has ever been expressed. Respondent 1's only grievance is that the property could have fetched a higher value. Apart from the alleged affidavit of the said Sidhique, no other material has been produced by him in support of such submission. On the other hand in fixing the upset price, the Advocate Commissioner had taken into account the certificate of market value in respect of the property issued by the Sub-Registrar, Golkunda dated 13.5.2005 at Rs. 10 lakh, respondent 1 has never complained that the upset price had been wrongly fixed. The appellant's offer was above the market value. Additionally, respondent 1 was given several opportunities to produce the purchaser, who was allegedly willing to pay a higher price. The purchaser was never produced. As against this, the appellant has duly deposited the entire amount of Rs. 12 lakh in the Court, The District Judge, was in the circumstances correct in rejecting the so-called offer of the said Sidhique.

Both the Counsel have also invited my attention to some other authorities reported in State Bank of India v. Hon'ble Debts Recovery Appellate Tribunal & Ors., : III (2010) BC 38=2010(115) DRJ 304 (DB), A. Parvatham v. Bank of Baroda and Others, II (2000) BC 535, (Hon'ble Madras High Court) and the judgment of this Tribunal in Soga Impex (P) Ltd. v. Canara Bank & Ors., : IV (2010) BC 24 (DRAT).

The learned Counsel for the auction purchasers argued that the auction purchasers have established a saw mill and for the purpose they have also obtained licence from the Forest Department, which was non-transferable in nature and was given for a particular premise. He contended that the auction purchasers had spent Rs.2.5 crores on the plot for construction and development. They also placed on record photographs showing the nature of construction and the activities being conducted on the plot. It was brought to the notice of the Court that at the initial stage the plot was a barren piece of land. The auction purchasers have also filed copy of income-tax certificate in order to show the loan outstanding which had been taken by them for the purpose of developing the property in question and establishing the industry on the same. The auction purchasers were not made parties before the learned trial Court and the order was passed without affording them an opportunity of being heard. It was pointed out that they were necessary parties as per the law laid down in Desk Bandhu Gupta v. N.L. Anand, : (1994) 1 SCC 131, and Karuppana Goundan v. Ponnuthayee alias Subbammal and Ors., : AIR 1956 Mad 198 - para 5. It was explained that the order passed by the lower Court is a nullity due to their non-joinder as per the law laid down in Khetrabasi Biswal v. Ajay Kumar Baral, : (2004) 1 SCC 317.

The learned Counsel for the auction purchasers argued that the order passed by the learned trial Court was ineffective inasmuch as the auction purchasers were in possession of the premises in dispute. Secondly, the decree could not be executed or enforced against the auction purchasers as per Devi Sahai v. Union of India, : (1976) 4 SCC 763, and State of Assam v. Union of India, : VII (2010) SLT 383= (2010) 10 SCC 408. It was also argued that an innocent third party who is a bona fide purchaser for value without notice in any auction should not be deprived of his property and his interest continued to be protected as per law laid down in Janak Raj v. Gurdial Singh, : AIR 1967 SC 608 and Janatha Textiles and Ors. v. Tax Recovery Officer and Anr., : III (2008) BC 372=V (2008) SLT 369= (2008) 12 SCC 582.

It was urged that the interest of the auction purchasers also stood protected under Section 53 of the Transfer of Property Act, 1882 and Section 19(b) of the Specific Relief Act, 1963.

It was also argued that an order of the Court cannot harm any one as per the legal maxim 'actus curiae neminem gavabit' The contention was that the auction purchasers could not in any case be prejudiced by DRT and asked to restore the property back to the debtor. They are bona fide purchasers and no collusion between them and the Bank stood established.

The attention of the Court was also invited towards various documents which were procured by the auction purchasers from the inspection of public documents of M/s. Madhusudan Milk Products (P) Ltd. available on the website of Ministry of Corporate Affairs. The documents like the Annual Returns and Form 18 filed by the said company with the Registrar of Companies, Rajasthan clearly showed that the Registered Office of the Company is at 17-A-1, Malviya Industrial Area, Jaipur and as such the Company misrepresented and played fraud on the DRT as well on this Court. It was argued that the notices sent by the Bank under Section 13 were perfectly valid and the same were duly received by the company at their registered office. Reference was made to the celebrated authority reported in S.P. Chengalvaraya Naidu v. Jagannath, : II (1993) BC 546 (SC)= (1994) 1 SCC 1, (Paras 4 and 5).

It was submitted that the requirement of publishing notice under Rule 8(2) was merely directory and not mandatory. The requirement of publishing the notice in two newspapers in vernacular language is only for the knowledge of the borrower. Since the notice was delivered to the borrower, therefore, Section 8(2) becomes a mere procedural formality as against issuance of notice under Rule 8(6) where the notice is for the benefit and knowledge of public and therefore is mandatory. The Counsel for the auction purchasers referred to an authority reported in State of Haryana and Anr. v. Raghubir Dayal, : (1995) 1 SCC 133, (paras 7 and 8). It was argued that the word 'shall' should be interpreted to mean 'may', that is directory and not mandatory as per the book 'Principles of Statutory Interpretation' (Wadhwa, Nagpur, 10th Edn, 2006) pages 378-381 and as per the authority reported in State Bank of India v. Hon'ble DRA T, 169 (2010) DLT 212=(MAN U/ DE/0300/2010) (Delhi High Court) (paras 16-18), Reference was also made to the celebrated authority of the Hon'ble Supreme Court in Authorised Officer, Indian Overseas Bank v. Ashok Saw Mill, : III (2009) BC 640(SC)=V1 (2009) SLT 10= AIR 2009 SC 2420.

All the above said arguments have left no impression upon the Court. It is a well settled that the word 'shall' is mandatory, and not directory. In the case reported in Swastik Agency and Others v. State Bank of India, Bhubaneswar and Others (D.B) (supra), the judgment was authored by Dr. B.S. Chauhan, the then Chief Justice and now a Judge of the Hon'ble Supreme Court wherein it was observed:

As the compliance of the statutory requirement had not been made and there is nothing on record to show that the valuation report had been made properly and the reserve price has been fixed accordingly. If it is presumed that it was done properly, then question arises how the property has fetched more than three times of the value fixed by the Bank. More so, non-publication of the notice in Oriya language is also fatal as it might have deprived persons not knowing English language to participate in the proceeding.

Non-compliance of such a mandatory requirement vitiated the proceedings. The Tribunal and DRAT have dealt with various issues without touching the most material issues involved in this case as explained hereinabove. The Tribunal and DRAT have misdirected themselves without entering into the legal issues, particularly the requirement and compliance of statutory provisions as non-compliance thereof would vitiate the entire proceedings. It seems to be highly arbitrary and unreasonable that for the recovery of a sum of amount about Rs. 4 lakh a property had been sold for Rs. 14 lakh and after adjusting its outstanding dues a sum of rupees more than double of their outstanding dues had been remitted to the petitioners. The petitioners did not accept the amount and returned the same to the Bank. The recovery proceedings had definitely not been made complying with the statutory provisions. Non-compliance of such statutory provisions tantamount to fundamental procedural defects which enable the Court to set aside the confirmed sale even after issuance of sale certificate.

Non-compliance of statutory requirements of publication of possession notice and auction notice in vernacular language rendered the statutory requirement as farce. There should be purposeful compliance of the provisions of law and it cannot be reduced to an empty formality. The requirement to cause publication in 'vernacular language' in the newspaper is fundamental and the statutory requirement which cannot be compromised. It is not for the borrower or guarantor to establish that non-publication of the said notices in 'vernacular language' in the newspaper has caused any prejudice to its cause. It is for the respondents to establish that non-compliance of the statutory requirements has not caused any prejudice at all. Proof of prejudice is unnecessary where requirement of statutory provision is mandatory. 'It ill-comes from a person who has denied justice that the person who has been denied justice is not prejudiced. Vide S.L. Kapoor v, Jagmohan & On., : AIR 1981 SC 136; and State of V.P. v. Shatrughan Lal & Anr, : AIR 1998 SC 3038'.

In view of the above, the writ petition succeeds and is allowed. All proceedings subsequent to notice under Section 13(4) of the Act, 2002 being in flagrant violation of the statutory provisions are liable to be quashed. The case is squarely covered by the judgments of the Apex Court referred to above in Dr. Rajbir Singh Dalai, AIR 2008 SOW 5817 (supra), Divya Manufacturing Company (P) Ltd. & Anr., : AIR 2000 SC 2346 (supra) and Valji Khimji and Company, 2008 AIR SCW 5828 (supra), wherein the Apex Court held that not giving wide publication of the auction notice itself is a good ground for quashing the confirmed sale. In such a fact situation opposite party No. 4 is entitled to refund of the amoum deposited by him. The opposite party-Bank shall refund the amount deposited by opposite party No. 4 with interest @ 10% per annum to him within four weeks from today. Opposite party No. 1 is directed to recalculate the amount due from the petitioner including interest thereon and issue a fresh demand notice to be served upon the petitioner within four weeks from today. We further direct that as the opposite party-Bank proceeded illegally, it is entitled to claim for legal expenses or recovery expenses from the petitioner. On receipt of the recomputed demand from the Bank, the petitioner shall deposit the same within four weeks from the date of receipt failing which the Bank shall be at liberty to proceed against the petitioner for making full recovery of its outstanding dues in accordance with law.

Secondly, the auction sale notice goes to show that the reserve price of the premises in dispute was fixed at Rs. 25 lakh. However, it was sold for 20.51 lakh. The Counsel for the Bank vehemently argued that there was global recession and consequently the full price could not be fetched.

I am unable to see substance in this argument. The reserve price was fixed in the year 2005 itself. Then also there was global recession. This fact goes a long way to cast a film of doubt over the above said auction.

It must be borne in mind that before setting aside the sale the learned DRT should have made the auction purchasers as parties to the proceedings before it. The auction purchasers were certainly necessary parties. It is well known legal maxim "No man should be condemned unheard". It is also settled principle that whatever disagreement there may be as to the scope of the phrase "due process of law", there can be no doubt due to it embraces the fundamental conception of fair trial, with opportunity to be heard.

It must also be borne in mind that the appeal is the continuation of the original proceedings. In this appeal the auction purchasers were afforded opportunity of being heard. They have also filed all the necessary documents before this Court. This Court had occasion to consider the pros and cons of those documents and submissions made by their Counsel. Since the Court has found that there are material irregularities in the publication and conduct of auction, therefore, this Court is of the considered view that there is no need of remanding the case to DRT. The defect in publishing the notice, particularly, that the notice could not be published in the vernacular language, cannot be rectified. Remand of the case, as prayed by the auction purchasers, will unnecessarily delay the case. Consequently, this Court has made up its mind to proceed with the case and decide it finally.

It may be true that the auction purchasers, might have spent a lot of money on the plot in dispute for its development and establishment of saw mill, but, in my opinion, they did it at their own peril. M/s. Madhusudan Milk Products (P) Ltd. had filed S.A. in the year 2005 itself. The auction purchasers should have waited for the outcome of the said S.A. and should have restrained themselves from spending money in developing the plot, They cannot now turn back and complain about the same and claim the benefit of both the worlds.

In the light of the above discussion, I hereby hold that the notice under Section 13(2) of the SRFAESI Act was properly served on the borrowers and possession of the premises in dispute was correctly and legally taken under Section 13(4) of the SRFAESI Act. In the result, I hereby direct the auction purchasers to hand over the possession of the property in question to the Bank within 60 days from the date of this order. On their failure to do so, the Bank will be at liberty to take police assistance and take possession of the property from the auction purchasers. The Bank is directed to refund the money deposited by the auction purchasers, along with interest @ 6% p.a. from the date of receipt of the money till it is paid, within 60 days from the date of this order.

The Bank is at liberty to auction the property again as per law, giving notice for auction sale and publishing it in the two leading newspapers, one in vernacular language, having sufficient circulation in that locality. Care should be taken to publish the notice in vernacular language, The sale be conducted strictly in accordance with the provisions contained in the Act and the rules made thereunder. The borrowers as well as the auction purchasers are at liberty to participate in the auction to be conducted by the Bank. The borrowers can also avail the benefit of Section 13(8) of the SRFAESI Act. They can also produce a better buyer, if they so desire. The property in dispute shall remain with the Bank till the same is re-auctioned and possession is handed over to the new purchaser.

The appeals are disposed of on the above terms.

Copies of this order be furnished to the parties as per law and another copy be sent to the learned DRT.