Disposed

Thota Yuva Raj ashekar, v. M/s Canara Bank

Andhra Pradesh HC11 Nov 2019WP/17090/2019

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition challenging the bank's decision to forfeit the petitioner's deposit and proceed with re-auction. The Court held that a further extension of time was illegal without a specific written agreement and refused the claim for relief, allowing the petitioner to participate in the ensuing auction after a specified deduction.

What did the court decide?

Petition disposed; no order as to costs; petitioner directed to participate in ensuing auction after deduction of Rs.2,00,000/- from deposited amount.

Thota Yuva Raj ashekar, Vs M/s Canara… — Civil Procedure and Limitation | Andhra Pradesh HC (2019)

¶1

THE HONOURABLE SRI JUSTICE A.V.SESHA SAI

¶2

AND

¶3

THE HONOURABLE SRI M.GANGA RAO

¶4

WRIT PETITION No.17090 OF 2019

¶5

ORDER : (per Hon’ble Sri Justice A.V.Sesha Sai)

¶6

This Writ Petition is filed, under Article 226 of the Constitution of India, for the following relief:

¶7

“to issue a writ of Mandamus or any other appropriate writ, order or direction, declaring the action of the second respondent in not granting time for payment of balance amount pursuant to the auction conducted on 28.02.2019 and confirmed in favour of the petitioner vide confirmation letter, dated 02.03.2019, in relation to the property bearing D.No.1-118, Vetapalem panchayat, Chirala, Prakasam District and forfeiting the amounts paid by the petitioner, vide letter, dated 30.05.2019, and proceeding with reauction vide sale notice reference 0605.261.10582SN, dated 04.10.2019, as illegal and arbitrary…”

¶8

Heard Sri C.Raghu, learned counsel for the petitioner, apart from perusing the entire material available on record.

¶9

In the auction conducted by the respondent-bank, under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for brevity, ‘the Act’), petitioner herein emerged as the highest bidder for a sum of Rs.27,96,000/-. The schedule of the property is as follows:

¶10

“Site admeasuring 188.36 sq.yards along with RCC roofed three-storied building located at

¶11

AVSS,J & MGR,J W.P.No.17090 of 2019

¶12

¶13

S.No.120 of Nayunipalli village with Assessment No.111, Door No.1-118, Block No.1, Vetapalem Panchayat and village, Chirala sub District and Prakasam District standing in the name of Alahari Ramadevi, d/o Brahmaiah, Sale deed on 1163/2013.

¶14

Rounded:

¶15

East: Property of Pallapolu Venkata Subbaiah & others.

¶16

South: Sarkar Galli.

¶17

West: Property of Pallapolu Seethamma and its compound wall.

¶18

North: Joint property of Pallapolu Magabrahmadu & Pallapolu Ramaiah”.

¶19

It is not in dispute that, on the date of auction, petitioner herein paid 25% of the bid amount i.e. Rs.8,81,000/-. According to the petitioner, he paid another sum of Rs.2,00,000/- on 01.04.2019 and the balance payable being Rs.9,04,500/-. It is also not in controversy that the sale was confirmed on 02.03.2019 vide reference No.M/s Sai Stones (0605.261.10582), dated 02.03.2019. Subsequently, vide reference No.M/s Sai Stones (065.261.10582), dated 16.03.2019, time was granted for payment of the amount till 30.03.2019. Thereafter, time was once again extended till 30.04.2019. Eventually, vide Ref.No.Sai Stones (605.261.10582), dated 30.05.2019, the request made by the petitioner herein for further extension of time till 20.05.2019 was not considered and, consequently, the respondent-bank authorities forfeited the amount deposited by the petitioner herein. Thereafter, respondent-bank issued the sale notice

¶20

AVSS,J & MGR,J W.P.No.17090 of 2019

¶21

¶22

vide Ref.No.0605.261.10582 SN, dated 04.10.2019, proposing to hold auction on 12.11.2019.

¶23

The sum and substance of the case of the petitioner, in the present Writ Petition, is that, instead of granting time for payment of the balance amount, as requested by the petitioner herein, the respondent-bank authorities are proceeding with the auction of the property and the said action, on the part of the respondent-bank authorities, is highly illegal, arbitrary and opposed to the very spirit and object of the provisions of the Act and the rules framed thereunder.

¶24

On the contrary, it is vehemently submitted by the learned counsel for the respondent-bank that there is no error nor there exists any procedural infirmity in the impugned order and, in the absence of the same, the impugned action is not amenable for any judicial review under Article 226 of the Constitution of India. It is the further submission of the learned counsel that, in view of the mandatory provisions of law, as stipulated under Rule 9 of the Rules, the claim of the petitioner herein cannot be considered. On instructions, it is further submitted by the learned counsel that, by deducting a sum of Rs.2,00,000/from the amount already paid by the petitioner herein, the balance of the amount will be refunded to the petitioner.

¶25

AVSS,J & MGR,J W.P.No.17090 of 2019

¶26

¶27

In this context, it may be appropriate to refer to the provisions of Rule 9 of the Rules which deals with the time of sale, issue of sale certificate and delivery of possession etc. Sub-Rule 2 of Rule 9 of the Rules deals with the confirmation of sale. Sub-Rule 3 of Rule 9 of the Rules mandates the purchaser of the property to pay 25% of the amount of sale price on the same day of auction and not later than the next working day.

¶28

Sub-Rule (4) of Rule 9 of the Rules stipulates that the balance amount of purchase price shall be paid by the purchaser on or before the 15^th day of confirmation of 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.

¶29

Sub-Rule (5) of Rule 9 of the Rules states that in default of payment within the period mentioned in sub-Rule (4), the deposit amount is liable for forfeiture to the secured creditor and the property can be resold. In the instant case, though the petitioner did not pay the amount, within fifteen days from the date of confirmation of sale i.e. 02.03.2019, the respondent-bank authorities extended the time till 30.04.2019. Thereafter, admittedly, there is no extension of time granted by the respondent-bank authorities. It is very much evident from a reading of sub-Rule (4) of Rule 9 of the Rules that further extension of time beyond 15 days from the date of confirmation can be on the basis of agreement in

¶30

AVSS,J & MGR,J W.P.No.17090 of 2019

¶31

¶32

writing between the purchaser and the secured creditor. In the instant case, there is no such agreement. Having regard to the language employed in the above said provisions of law, no relief, as claimed in the present Writ Petition, can be granted in favour of the petitioner herein. However, as submitted by the learned counsel for the petitioner, the amount deposited by the petitioner herein after deducting Rs.2,00,000/- (rupees two lakhs only) shall be paid back to the petitioner herein and it is open for the petitioner herein to participate in the ensuing auction in accordance with law.

¶33

Accordingly, Writ Petition is disposed of. There shall be no order as to costs.

¶34

As a sequel thereto, miscellaneous petitions, if any pending, shall stand closed.

¶35

__________________ A.V.SESHA SAI, J

¶36

M.GANGA RAO, J

¶37

11^th November, 2019.

¶38

Note: Furnish C.C. of the order within one week. B/o Tsy