Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – S. 17 (1) – Auction Purchaser has a remedy of filing appeal u/s. 17(1) of the SARFAESI Act before the Debts Recovery Tribunal questioning the confirmation of auction and other proceeding.
Writ Petition (C) No.1803 of 2016
Order delivered on: 5-12-2017
MAN Industries (India) Limited, (A Company incorporated under the Companies Act, 1956), having registered office at Man House, 101, S.V. Road, Vile Parle (West), Mumbai-400 056, through its Authorized signatory Mr. Ketan Vaidya.—- Petitioner
1. Punjab National Bank (A body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970) having Branch Office at Anathalaya Marg, Near Kewadwadi Bus Stand, Near Telegraph Office, Raigarh, District Raigarh (C.G.)
2. Authorized Officer, Punjab National Bank, Near Kewadwadi Bus Stand, Near Telegraph Office, Raigarh Branch (C.G.)
3. M/s Scan Ispats Ltd., (a Company incorporated under the Companies Act, 1956) having office at Hospet Road, Ginigera, Tehsil and District Koppal, Karnataka, Through its Director.
4. Bank of Baroda, (a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970), Rourkela Branch, District Rourkela, Orissa.—- Respondents
For Petitioner: Mr. Satish Agrawal and Mr. Ankit Singhal, Advocates. For Respondents No.1 and 2: – Mr. Sachin Singh Rajput and Mr. Praveen Chaturvedi, Advocates. For Respondent No.3: Mr. Amit Sahni, Advocate. For Respondent No.4: Mr. Rajkamal Singh and Mr. Ashok Dubey, Advocates.
O R D E R
Hon’ble Shri Justice Sanjay K. Agrawal
1. Invoking extraordinary jurisdiction under Article 226 of the Constitution of India, the petitioner herein, which is a company registered and incorporated under the Companies Act, 1956, calls in question legality, validity and correctness of public notice dated 4-10-2013 and confirmation of sale dated 21-12-2013 and also confirmation of sale dated 29-1-2014 seeking declaration that such confirmation of sale is illegal and bad in law and not binding on the petitioner.
2. The aforesaid reliefs have been claimed on the following factual backdrop: –
3. Punjab National Bank (PNB) being a lead Bank had initiated a proceeding under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the SARFAESI Act’) and thereafter, secured asset was put to auction on 22-11-2013 and secured asset was ultimately sold. The petitioner is auction purchaser in whose favour the bid was finally knocked down for ₹ 31 crores. Sale certificate was issued in favour of the petitioner on 29-1- 2014, but physical possession of the subject property could not be delivered to the petitioner for which the petitioner made correspondences with respondents No.1 and 2 Bank for last two years up to June, 2016, but no physical possession of the subject property was delivered and ultimately, the petitioner decided to file this petition for setting aside the public notice, sale and confirmation of sale dated 29-1-2014 as unsustainable and bad in law. The principal ground raised in the writ petition is that the factory is situated outside the mortgaged area and that has not been mortgaged with the respondent Bank and therefore the Bank is not able to deliver the vacant and peaceful possession of the said factory to the petitioner. It is the stand of the Bank that the petitioner should dismantle the factory from the nonmortgaged area and affix to the area which has been mortgaged. Therefore, a writ be issued to set aside the sale as the entire auction is based on misrepresentation about the details of the property. It has been prayed that the auction shall be set aside and the amount of 31 crores ₹ along with interest be refunded to the petitioner.
4. Mr. Praveen Chaturvedi assisted by Mr. Sachin Singh Rajput, learned counsel appearing for the respondent PNB, filed return opposing the writ petition stating inter alia that alternative remedy under Section 17(1) of the SARFAESI Act is available to the petitioner as such, the writ petition as framed and filed is not maintainable. The Bank has only sold plant and machinery to the petitioner as mentioned in the auction notice on “as is where is basis” and there is no concept of factory in the action notice. The petition involves disputed question of facts as well as suffers from delay and laches as auction has been confirmed on 29-1- 2014 and the writ petition has been filed on 14-7-2016 and inordinate delay of two years has not been explained satisfactorily to invoke the equitable jurisdiction. Despite request by the Bank, the petitioner is not taking possession of the subject property and has filed this petition. Therefore, the writ petition as framed and filed is not maintainable under law and deserves to be dismissed.
5. Mr. Amit Sahni, learned counsel appearing for respondent No.3, would also submit that the writ petition as framed and filed is not maintainable, the petitioner has alternative remedy of invoking the jurisdiction of Debts Recovery Tribunal and the petitioner has not come with clean hands.