Partly allowed

M/S Mrp Group of Industries v. Bank of Baroda

DRAT6 Aug 2024REGULAR APPEAL/4/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal set aside an E-auction sale conducted by Bank of Baroda on 02.02.2018. The Tribunal held that the sale notice was published before the mandatory thirty-day notice period prescribed under Rule 8(6) had expired, violating the statutory mandate to maintain sanctity of auctions and extinguish the borrower's right of redemption.

What did the court decide?

Impugned order of DRT dismissed; S.A. allowed; E-auction sale set aside; Bank directed to refund sale proceeds to purchaser with interest.

M/S Mrp Group of Industries versus Bank of Baroda — Specific Performance | DRAT (2024)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appl. No. 04 of 2023

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(Arising out of S.A. No. 69 of 2018 – DRT-Cuttack)

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THE HON’BLE JUSTICE SHRI ANIL KUMAR SRIVASTAVA, CHAIRPERSON

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Order No.

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06.08.2024

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M/S MRP Group Of Industries Having Registered Office At Plot No81, Goutam Nagar, Saradeipur, Near NH203, PO Dhauli Square, Bhubaneswar, Khurda – 751002.

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... Appellant

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--Vs--

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Authorised Officer-cum- Regional Manager, Bank Of Baroda, Regional Office, Bhubaneswar, At 1^st floor, Bibab Gulmohar Apartment, Behera Sahi, PO/PS Nayapalli, Bhubaneswar – 751012, Dist. Khurda.

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2.Branch Manager, Bank Of Baroda,Khandagiri Branch, Aiginia Chhak, PO Khndagiri, Bhubaneswar – 751012, Dist. Khurda.

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3.Collector Cum District Magistrate, Khurda Collectorate Campus, Dist. Khurda.

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4.The District Sub Registrar, Khurda Bhubaneswar.

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5.Deputy Commissioner Of Police, Bhubaneswar PO Saheed Nagar, Town – Bhubaneswar, Dist. Khurda.

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6.Durjaya Kumar Nath, Prop of M/s. Nath Enterprisers, Dhenkanal, Dist. Dhenkanal, Odisha.

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... Respondents

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For Appellant : Mr. Nemani Srinivas, ld. adv.

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For Respondent : Mr. Dipanjan Dutta, ld. Adv.

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THE APPELLATE TRIBUNAL :

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Instant appeal is arising against the order dated 16.04.2019 passed by learned DRT-Cuttack in S.A. No. 69 of 2018 [M/s. MRP Group of Industries Vs. Authorised Officer-Regional Manager,

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Bank of Baroda & Ors.] whereby S.A. was dismissed. Feeling aggrieved, appellant preferred the appeal.

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As per pleadings of the parties, S.A. applicant has availed loan from respondent no.1 bank by creating equitable mortgage in favour of the bank. Loan account became irregular and was classified as NPA on 30.09.2014. Thereafter, O.A. 433 of 2015 was filed by the bank for recovery of Rs.1,26,12,619/- which was settled at Rs.1.18 crore in the National Lok Adalat with the condition that settled amount to be paid in 13 instalments with 12% simple interest and after receiving the amount bank shall close the account. Settlement failed. Subsequently, an order u/s 14 of the SARFAESI Act, 2002 (hereinafter referred to as Act) was obtained on 14.08.2015. On 14.10.2014 notice u/s 13(2) of the Act was issued to the guarantor as well as borrower claiming outstanding dues of Rs.87,88,006/-. Possession notice was issued on 17.12.2014. On 06.01.2015 again possession notice u/s 13(4) of the Act was issued. Notice under Rule 8(6) of the Rules was issued on 31.10.2017 and was published in two newspapers wherein reserve price was fixed and outstanding dues were also shown. E-auction sale was fixed on 01.12.2017 which could not succeed.

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Thereafter, fresh e-auction sale notice was published in two newspapers on 02.01.2018 fixing the auction date on 02.02.2018. On the same date notice under Rule 8(6) was

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issued. Sale was conducted on 02.02.2018. Challenging the action of the bank appellant filed S.A. u/s 17 of the Act.

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Respondent bank filed opposition stating therein that S.A. moved by the applicant is barred by limitation. Notice u/s 13(2) and 13(4) of the Act was legally issued and served. S.A. is liable to be dismissed.

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Considering the submission made by the learned counsel for the parties, learned DRT has arrived at a conclusion that bank has followed the procedure prescribed under the law. Accordingly, dismissed of the S.A. Feeling aggrieved by the impugned judgement, appellant preferred the appeal.

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Heard learned counsel for the appellant as well as learned counsel for the respondents bank and perused the records.

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Learned counsel for the appellant at the very outset submits that there is a patent error in the impugned judgement. Sale notice was published on 02.01.2018 wherein date of e-auction mentioned was 02.02.2018. Notice under Rule 8(6) of the Rules was also issued by the bank on 02.02.2018, which is against the law. On the sole ground learned counsel for the appellant preferred the appeal. Per contra, learned counsel for the respondents submits that bank has strictly followed the Rules and regulations, accordingly, sale was conducted. Learned counsel for the appellant has placed reliance upon the recent judgement

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delivered by the Hon’ble Apex Court in Celir LLP v. Bafna Motors (Mumbai) (P) Ltd . [(2024) 2 SCC 1]

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8. W e are conscious of the fact that in a recent judgment in Bafna Motors(supra) the Hon’ble Apex Court hasdealt with all the issues relating to the auction sale as well as compliance of the provisions of the Act as well as Rules made thereunder. The Hon’ble Apex Court has dealt with the issue of the sanctity of public auction. Hon’ble the Apex Court has placed reliance upon a judgment in Valji Khimji And Company -vs- Official Liquidator of Hindustan Nitro Product (Gujarat) Limited & Others [(2008) 9 SCC 299] wherein it was held that once an auction is confirmed, the same can be interfered only on very limited grounds as otherwise no auction would ever be complete.

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Hon’ble Apex Court in Bafna Motors (supra) has reiterated the case of K. Kumara Gupta -vs- Sri Markendaya and Sri Omkareswara Swamy Temple & Others [(2022) 5 SCC 710] wherein the Hon’ble Apex Court in paragraph 17 has held that:

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“17. The sale pursuant to the public auction can be set aside in eventuality where it is found on the basis of material on record That the property had been sold away at a throwaway price and/or on a wholly inadequate consideration because of the fraud and/or collusion and/or after any material irregularity and/or illegality is found in conducing/holding the public auction. After the public auction is held and the highest bid is received and the property is sold in a public auction in favour of a highest bidder, such a sale cannot be set aside on the basis of some offer made by third parties subsequently and that too when they did not participate in the auction proceedings and made any offer and/or the offer is made only for the sake of making it and without any serious intent. In the present case, as observed hereinabove, though Shri Jagat Kumar immediately after finalising the auction stated that he is ready and willing to pay a higher price, however, subsequently, he backed out. If the

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auction-sale pursuant to the public auction is set aside on the basis of such frivolous and irresponsible representations made by such persons then the sanctity of a public auction would be frustrated and the rights of a genuine bidder would be adversely affected."

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Further Hon’ble Apex Court has reiterated the Case Law and

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has held in Eva Agro Feeds Private Limited -vs- Punjab National Bank [(2023) SCC OnLine 1138]wherein it was held that there can be no absolute or unfettered discretion on the part of the Liquidator to cancel an auction which is otherwise valid. Hence it was held by the Hon’ble Apex Court that in the case of Bafna Motors (supra) that :

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“86. Thus, what is discernible from above is that, it is the duty of the courts to zealously protect the sanctity of any auction conducted. The courts ought to be loath in interfering with auctions, otherwise it would frustrate the very object and purpose behind auctions and deter public confidence and participation in the same.

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Any other interpretation of the amended Section 13 (8) will lead to a situation where multiple redemption offers would be encouraged by a mischievous borrower, the members of the public would be dissuaded and discouraged from in participating in the auction process and the overall sanctity of the auction process would be frustrated thereby defeating the very purpose of the SARFAESI Act. Thus, it is in the larger public interest to maintain the sanctity of the auction process under the SARFAESI Act.”

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“96. More than a decade back, this Court had expressed serious concern despite its repeated pronouncements in regard to the High Courts ignoring the availability of statutory remedies under the RDBFI Act and the SARFAESI Act and exercise of jurisdiction under Article 226 of the Constitution. Even after, the decision of this Court in Satyawati Tondon (supra), it appears that the High Courts have continued to exercise its writ jurisdiction under Article 226 ignoring the statutory remedies under the RDBFI Act and the SARFAESI Act.

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Conduct of the Bank

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The genesis of the entire case lies in the illegitimate conduct of the Bank in placing different concerns above the clear provisions of the law. First, there was failure on the part of the Bank to issue sale certificate in favour of the auction purchaser despite the fact that the entire payment of auction bid

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was made. Secondly, although the right of redemption clearly stood lapsed under Section 13 (8) of the SARFAESI Act and auction having taken place wherein full bid amount was received, yet the Bank proceeded to accept the offer of full payment of the Borrower which is clearly impermissible in law. Once the auction notice is published in accordance with Section 13 (8) of the SARFAESI Act, then unless and until the auction is held to be bad and illegal in the facts of the case, the right of redemption of mortgage is not available to the borrower.”

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In view of the law laid down by the Hon’ble Apex Court, now

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I have to scrutinize whether the procedure, described in Rules 8 (6) and 9 (1) of The Rules, is followed by the secured creditors or not?

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In the present case, admittedly sale notice was published on 02.01.2018 fixing date of e-auction on 02.02.2018. Notice under Rule 8(6) of the Rules was also issued by the bank on 02.02.2018. Now I have to look into the validity and legality of the notice dated 02.02.2018 issued under Rule 8(6) of the Rules.

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Rules 8 and 9 of Security Interest (Enforcement) Rules, 2002 read as under:

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“8. Sale of immovable secured assets -

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(1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix-IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property.

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(2) The possession notice as referred to in sub-rule (1) shall also be published, as soon as possible but in any case not later than seven days from the date of taking possession, in two leading newspapers, one in vernacular language having sufficient in that locality, by the authorised officer.

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(2A) All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes prescribed under sub-rule (1) and sub-rule (2) of rule 8.]

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(3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be

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kept in his own custody or in the custody of any person authorised or appointed by in his custody as an him, who shall take as much care of the property owner of ordinary prudence would, under the similar circumstances, take of such property.

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(4) The authorised officer shall take steps for preservation and protection of secured assets and insure them, if necessary, till they are sold or otherwise disposed of.

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(5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods:-

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(a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or

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(b) by inviting tenders from the public;

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(d) by private treaty:

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(6) The authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5):

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(7) Every notice of sale shall be affixed on the conspicuous part of the immovable the sale, on the web-site of the secured creditor, which shall include-

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(a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor;

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(b) the secured debt for recovery of which the property is to be sold;

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(d) time and place of public auction or the time after which sale by any other mode shall be completed;

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(e) deposit of earnest money as may be stipulated by the secured creditor;

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(f) any other terms and conditions, which the authorised officer considers it necessary for a purchaser to know the nature and value of the property.

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(8) Sale by any method other than public auction or public tender, shall be on such terms as may be settled between the secured creditor and the proposed purchaser in writing.

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9. Time of sale, issue of sale certificate and delivery of possession, etc.

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(1) No sale of immovable property under these rules, in first instance shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) of rule 8 or notice of sale has been served to the borrower:

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(2) The sale shall be confirmed in favour of the purchaser who has offered the highest sale price in his bid or tender or quotation or offer to the authorised officer and shall be subject to confirmation by the secured creditor:

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(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 per cent. of the amount of the sale price, which is inclusive of earnest money deposited, if any, to the authorised officer conducting the sale and in default of such deposit, the property shall be sold again.

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(4) The balance amount of purchase price payable shall be paid by the purchaser to the authorised officer on or before the fifteenth day of confirmation of sale of the immovable property or such extended period ¹[as may be agreed upon in writing between the purchaser and the secured creditor, in any case not exceeding three months.

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(5) In default of payment within the period mentioned in sub-rule (4), the deposit shall be forfeited [to the secured creditor and the property shall be resold and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may be subsequently sold.

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(6) On confirmation of sale by the secured creditor and if the terms of payment have been complied with, the authorised officer exercising the power of sale shall issue a certificate of sale of the immovable property in favour of the purchaser in the form given in Appendix-V to these rules.

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(7) Where the immovable property sold is subject to any encumbrances, the authorised officer may, if he thinks fit, allow the purchaser to deposit with him the money required to discharge the encumbrances and any interest due thereon together with such additional amount that may be sufficient to meet the contingencies or further cost, expenses and interest as may be determined by him:

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(8) On such deposit of money for discharge of the encumbrances, the authorised officer [shall] issue or cause the purchaser to issue notices to the persons interested in or entitled to the money deposited with him and take steps to make the payment accordingly.

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(9) The authorised officer shall deliver the property to the purchaser free from encumbrances known to the secured creditor on deposit of money as specified in sub-rule (7) above.

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(10) The certificate of sale issued under sub-rule (6) shall specifically mention that whether the purchaser has purchased

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the immovable secured asset free from any encumbrances known to the secured creditor or not.”

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14. Issue of notice, under Rule 8 (6) and 9 (1) of the Rules, is

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not res integra which has been settled by the Hon’ble Apex Court in the case of Bafna Motors (supra). The Hon’ble Apex Court in paragraph 26 of the judgment has framed the following issues apart from other issues :

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(a) Whether the High Court was justified in exercising its writ jurisdiction under Article 226 of the constitution more particularly when the alternative remedy available to the Borrowers had already been availed of?

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(b) Whether the confirmation of sale by the Bank under Rule 9 (2) of the Rules of 2002 invests the successful auction purchaser with a vested right?

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(c) What is the impact of the amended Section 13 (8) of the SARFAESI Act on the Borrowers' right of redemption in an auction conducted under the SARFAESI Act? Or in other words, what is the effect of amendment to Section 13 (8) of the SARFAESI Act read with Section 60 of the Act 1882?

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(d) Whether a Bank after having confirmed the sale under Rule 9 (2), can withhold the sale certificate under Rule 9(6) of the Rules of 2002 and enter into a private arrangement with a borrower?

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(e) Whether the High Court under Article 226, could have applied equitable considerations to override the outcome contemplated by the statutory auction process prescribed by the SARFAESI Act?

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(f) Whether the right of redemption of mortgage stood extinguished upon publication of notice of auction? Or in other words till what point of time the right of

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redemption of mortgage can be exercised in respect of secured asset under the SARFAESI Act?

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(g) Whether the decisions of Telangana High Court in the case of Concern Readymix (supra) and Amme Srisailam (supra) lay down the correct position of law?

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Dealing with the right to redemption, as provided under Section 13 (8) of the Act, The Hon’ble Apex Court has placed

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reliance upon Narandas Karsondas -vs- S.A. Kamtam &

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Another (1977 (3) SCC 247 wherein in paragraph 37 it was held:

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“37. In view of the fact that only on execution of conveyance, ownership passes from one party to another it cannot be held that the mortgagor lost the right of redemption just because the property was put to auction. The mortgagor has a right to redeem unless the sale of the property was complete by registration in accordance with the provisions of the Registration Act."

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Subsequent thereto, Section 13(8) of the Act got amended on 1^st September, 2016 and the words “any time before the date fixed for sale or transfer” of the original provision was replaced with “at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets.”

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17. Scope of amended Section 13 (8) of the Act was considered by the Division Bench of the Hon’ble Andhra Pradesh High Court in Sri Sai Annadhatha Polymers & Another -vs- Canara Bank (2018 SCC OnLine Hyderabad 178) wherein it was held that the right of the borrower to redeem the secured asset was available till the sale or transfer of such secured asset. The Hon’ble Court went on to say that the amended provisions of Section 13 (8) of the SARFAESI Act brought in a radical change inasmuch as the right of the borrower to redeem the secured asset would stand extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the Rules. Hon’ble Apex Court has placed reliance upon its own

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decision in Mathew Varghese -vs- M. Amritha Kumar & Others [(2014) 5 SCC 610].

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18. Subsequently, in the case of K.V.V. Prasad Rao Gupta - vs- State Bank of India (2021 SCC OnLine TS 328) the law laid down in Sri Sai Annadhatha Polymers (supra) was reiterated.

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19. The Hon’ble Apex Court in Bafna Motors (supra) has also placed reliance upon its own judgment in the case of Shakeena

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&Another -vs- Bank of India & Others [(2021) 12 SCC 761] wherein it was held in paragraph 55 that:

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"15. Be it noted that on 1-9-2016 amendment to Section 13 (8) of the 2002 Act came into force as a result of which the dues of the secured creditor together with all costs, charges and expenses incurred by him are required to be tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets.”

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Hence, in paragraph 59 of the Bafna Motors (supra) Hon’ble Apex Court has held that :

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“59. Thus, from the aforesaid, it is evident that the Telangana High Court in the Amme Srisailam (supra) has not referred to or looked into its earlier decision in the case of K.V.V. Prasad Rao Gupta (supra). The decision of the Andhra Pradesh High Court in Sri Sai Annadhatha Polymers (supra) was also not been looked into by the Telangana High Court in the case of Amme Srisailam (supra). It appears that the Telangana High Court in Concern Readymix (supra) and Amme Srisailam (supra) as well as the Punjab and Haryana High Court in the case of Pal Alloys (supra) have taken the view that the amended Section 13 (8) of the SARFAESI Act does not exclude the application of Section 60 of the Act 1882 in view of Sections 35 and 37 respectively of the SARFAESI Act.”

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Hon’ble Apex Court specifically deals with the amendment of Section 13 (8) of the SARFAESI Act in Bafna Motors (supra). It

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was held in paragraph 68 that the right of redemption of mortgage is available to the Borrower under the SARFAESI Act only till the publication of auction notice and not thereafter, in the light of the amended Section 13 (8) of the Act. It was further held that the provisions of Transfer of Property Act would not be applicable in addition to the SARFAESI Act as statutory right of redemption in the Act of 1882 will not be applicable to the SARFAESI Act at least in view of the amended Section 13 (8) of the Act and any right of redemption of the Borrower must be found in terms of Section 13 (8). It was further held in paragraphs 80 and 81 that :

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“80. To read it otherwise in a strict manner as to only stipulating a restriction upon the secured creditor and not on the borrower's right of redemption would lead to a very chilling effect, where no auction conducted under the SARFAESI Act would have any form of sanctity, and in such a situation no person would be willing to come forward and participate in any auction due to the fear and apprehension that despite being declared a successful bidder, the borrower could still at any time come and redeem the mortgage and thereby thwart the very auction process.

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Such a scenario is all the more worrisome, because the general public who participate in such auctions are often neither aware nor informed by the secured creditors conducting the auctions, that as long as the sale certificate is not issued, they will not have a right in the said asset and that the borrower whose asset is being auctioned could sweep-in and redeem the mortgage any time, and thereby thwart their rights and the very auction process.”

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It was further held in paragraph 88 that :

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“88. In view of the aforesaid discussion, we hold that as per the amended Section 13 (8) of the SARFAESI Act, once the borrower fails to tender the entire amount of dues with all cost & charges to the secured creditor before the publication of auction notice, his right of redemption of mortgage shall stand extinguished / waived on the date of publication of the auction notice in the newspaper in accordance with Rule 8 of the Rules of 2002.”

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Ultimately, Hon’ble Apex Court in paragraph 104 held that :

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“x x x x However, the amended provisions of Section 13 (8) of the SARFAESI Act, make it clear that the right of the borrower to redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public auction under Rule 9 (1) of the Rules of 2002. In effect, the right of redemption available to the borrower under the present statutory regime is drastically curtailed and would be available only till the date of publication of the notice under Rule 9 (1) of the Rules of 2002 and not till the completion of the sale or transfer of the secured asset in favour of the auction purchaser.”

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It was further specifically held that the decision of the Telangana High Court in the case of Concern Readymix -vsAuthorised Officer, Corporation Bank (2018 SCC OnLine Hyderabad 783, Amme Srisailam -vs- Union Bank of India, (2022 SCC OnLine AP 3484) and the judgment of The Hon’ble Punjab & Haryana High Court in the case of M/s. Pal Alloys & Metal India Private Limited (2021 SCC OnLine P&H 2733) has not laid down the correct position of law. However, the decisions of the Hon’ble Andhra Pradesh High Court in Sri Sai Annadhatha Polymers (supra) and Hon’ble Telangana High Court in K.V.V. Prasad Rao Gupta (supra) have laid down the correct position of law while interpreting the amended Section of 13 (8) of the SARFAESI Act. At this stage it would be apposite to refer to the judgment of the Hon’ble Andhra Pradesh High Court in Sri Sai Annadhatha Polymers (supra) wherein considering the amendment of Section 13 (8) of the Act, it was held that post amendment scenario inevitably requires a clear thirty days notice period to be maintained between issuance of the sale notice

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under Rule 8 (6) of the Rules and the publication of the sale notice under Rule 9 (1) of the Rules thereof as the right of redemption available to the Borrower, in terms of Rule 8 (6) of the Rules, as pointed out in Mathew Varghese (supra), stands extinguished upon publication of the sale notice under Rule 9 (1) of the Rules. (emphasis supplied) In the case of Sri Sai Annadhatha Polymers (supra) notice under Rule 8 (6) was issued on 1.3.2018 and publication of the sale notice in newspaper under Rule 9 (1) was on 3.3.2018. Hence it was held that there is a clear violation of statutory mandate which vitiates the exercise undertaken by the Bank. These findings have been confirmed and affirmed by the Hon’ble Apex Court in the case of Bafna Motors (supra). Hence it is crystal clear that there should be a clear thirty days notice period being maintained between the issuance of the sale notice under Rule 8 (6) of the Rules and the publication of the sale notice under Rule 9 (1) of the Rules as right of redemption available to the Borrower in terms of Rule 8 (6) of the Rules stands extinguished on publication of the sale notice under Rule 9 (1) of the Rules. [emphasis supplied]

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Now, in view of the aforesaid legal scenario, I have to examine the facts of the present case wherein a notice underRules 8(6) of the Ruleswas issued on 02.02.2018 while the Sale Notice was published in the newspaper on 02.01.2018 fixing auction sale on 02.02.2018.

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Hon’ble Apex Court, in the case of Bafna Motors (supra), has reiterated the laws laid down in National Spot Exchange

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Limited -vs- Anil Kohli, Resolution Professional for Dunar

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Foods Limited [(2022) 11 SCC 761] that :

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“102. x x x x where the law is clear the consequence thereof must follow. The High Court has no option but implement the law. The relevant observations made in it are being reproduced below: -

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"15.1. In Mishri Lal [BSNL -vs- Mishri Lal, (2011) 14 SCC 739: (2014) 1 SCC (L&S) 387], it is observed that the law prevails over equity if there is a conflict. It is observed further that equity can only supplement the law and not supplant it.

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15.2. In Raghunath Rai Bareja [Raghunath Rai Bareja -vs-Punjab National Bank, (2007) 2 SCC 230], in paras 30 to 37, this Court observed and held as under: (SCC pp. 242-43)

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"30. Thus, in Madamanchi Ramappa -vs- Muthaluru Bojjappa [AIR 1963 SC 1633] (vide para 12)thisCourt observed: (AIR p. 1637)

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12.... [What is administered in Courts is justice according to law, and considerations of fair play and equity however important they maybe, must yield to clear and express provisions of the law."

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In Council for Indian School Certificate Examination v. Isha Mittal [(2000) 7 SCC 521] (vide para 4) this Courtobserved: (SCC p. 522)

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‘4.... Considerations of equity cannot prevail and donot permit a High Court to pass an order contrary to the law.’

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Similarly, in P.M. Latha v. State of Kerala [(2003) 3 SCC 541: 2003 SCC (L&S) 339] (vide para 13) this Court observed: (SCC p. 546)

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'13. Equity and law are twin brothers and law should be applied and interpreted equitably but equity cannot override written or settled law.

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In Laxminarayan R. Bhattad -vs- State of Maharashtra [(2003) 5 SCC 413] (vide para 73) this Court observed: (SCC p. 436)

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‘73. It is now well settled that when there is a conflict between law and equity the former shall prevail.'

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Similarly, in Nasiruddin -vs- Sita Ram Agarwal [(2003) 2 SCC 577] (vide para 35) this Court observed: (SCC p. 588)

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'35. In a case where the statutory provision is plain and unambiguous, the court shall not interpret the same in a

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different manner, only because of harsh consequences arising therefrom.'

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Similarly, in E. Palanisamy -vs- Palanisamy [(2003) 1 SCC 123] (vide para 5) this Court observed: (SCC p. 127)

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'5. Equitable considerations have no place where the statute contained express provisions.

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In India House -vs- Kishan N. Lalwani [(2003) 9 SCC 393] (vide para 7) this Court held that: (SCC p. 398)

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'7. ... The period of limitation statutorily prescribedhas to be strictly adhered to and cannot be relaxed or departed from for equitable considerations.’ …”

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Having considered the submission of the learned counsel for the parties, I am of the opinion that there is no clear gap of 15 days between the Notice under Rule 8(6) and 9(1) of the Rules.Publication of sale notice dated 02.01.2018 fixing date of auction sale on 02.02.2018 whereas notice under Rule 8(6) of the Rules was issued on 02.02.2018. It is in contravention of settled principle of law. Accordingly, I am of the considered view that learned DRT has erred in arriving at the finding recorded in the judgement. Impugned judgement has suffered material illegality. Appeal lacks merit and is liable to be dismissed.

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O R D E R

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Appeal is dismissed. Impugned judgement and order passed on 16.04.2019 by the learned DRT-Cuttack is set aside. Consequently, S.A. No. 69 of 2018 is allowed. E-auction sale conducted on 02.02.2018 is set aside. Respondent bank is directed to refund the sale proceeds to the auction purchaser at the fixed deposit interest rate prevailing at that time from the

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date of deposit of bid amount till the date of payment within 30 days. Consequently, sale certificate is also set aside. Costs easy. File be consigned to record room.

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Copy of the order be supplied to the appellant and the respondents and a copy be also forwarded to the concerned DRT. Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

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Order dictated, signed and pronounced by me in the open Court on this the 06 day of August, 2024.

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(Anil Kumar Srivastava, J) Chairperson

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Dated :06.08.2024 18/pkb

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M/S Mrp Group of Industries v. Bank of Baroda

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M/S Mrp Group of Industries v. Bank of Baroda

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