Dismissed

Sh Mohit Verma v. Edelweiss Asset Reconstruction Company

DRT13 Dec 2023SA/160/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a special application by an applicant seeking refund of auction deposits under the SARFAESI Act. The court held that the applicant forfeited the amounts by failing to pay the balance consideration within 15 days of the e-auction notices, as per the stated rules. No refund or compensation was granted.

What did the court decide?

The special application for refund of auction deposits and compensation is dismissed.

Sh Mohit Verma versus Edelweiss Asset Reconstruction Company — Banking and Recovery | DRT (2023)

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Debts Recovery Tribunal-Il,^Delhi

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SA No. 16O of 2022

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SH. MOHIT VERMA & ANRS.^{VS. EDELWEISS ASSET} RECONSTRUCTION COMPANY^LIMITED

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Reserved on: 20. LL.2023 Pronounced on : 13.12.2023

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Present: Shri A.K.Awasthi,^{counsel for applicant.} Ms. Manisha Aggarwal, counsel^for respondent FI.

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This SA has been filed by the applicant^against the respondent bank under Section^L7(L) of^the SARFEASI Act,2002 with the request to direct^the respondent FI to refund entire amount^{Rs.52,70,7501-} deposited in the auction dated 05.09.2019^and 25.09.2020 for purchase of auction^property along with interest of l2o/o^per annum and also direct the respondent FI to submit the record of auction proceeding qua the propefi bearing Plot no. 28, 2nd Floor, Crown Plaza, Neelam Bata Road, N.I.T., Faridabad, Haryana-121001, area admeasuring 3600 sq ft., which was conducted without notice to the applicants when applicant deposited Rs.52,70,7501-. ft is further prayed to set aside the SARFAESI actions in respect of the subject property and award^payment of compensation and cost to the applicant.

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The Ld. Counsel of the applicant has submitted that on 05.09.2019 the applicants^participated in the e.auction and deposited Rs.9,95,350/- by RTGS and cheque and sale confirmation letter dated 13.09.2019 was issued by respondent FI in favour of applicants. On 10.10.2019 applicant deposited Rs. 5,00,0001- and on 29.10.2019 applicant deposited Rs. 2,00,0001- by RTGS with the responqentl. The total amount ,€\

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deposited by the applicants^{is Rs.23,58,7501-. It is} further submitted that due to^{illness of applicant's} father and marriage of applicant^{no.1, they could not} deposit the remaining amount^{and requested the} respondent FI for extension of time^{for deposit of} remaining amount but respondent FI^{has not given} time which can be^given as^{per SARFAESIACT. The} respondent FI has^given assurance^{that propefiwill} again be^put for auction and^{amount deposited by the} applicant will be adjusted in^{the second auction.} Thereafter, auction notice again^{published in} newspaper in the month of August^{2020 and} appficants again deposited^EMD on^{23.09.2020 and} also deposited Rs.5,65,000/- by^{RTGS with the} respondent FI. The auction was conducted^on 25.09.2020. On 28.09.2020 applicant deposited^Rs. 8,47,000/- through RTGS and^sale confirmation^letter dated 28.09.2020 issued by the^{respondentFI in} favour of the applicants. Thereafter, on^3L.03.202L applicant deposited Rs.15,00,000/-. The^applicant deposited tota! amount of^{Rs.29,L2,0001- with the} respondent FI. Thereafter due to^pandemic of^COVID 19, the applicants could not deposit the^rest of^the amount and the Hon'ble Finance Minster as^{well as} Reserue Bank of India considering the^{situation due to} COVID 19 announced that the^{repayments schedules} shall be extended thereby^{granting moratoriumperiod} and due to the said reasons,^{the applicantscould not} deposit the said amount.^{However,the respondentFI} fulty aware of the death of^{applicants uncle and} condition of the applicants^{did not given extension of} time for^payment. Thereafter,^{on 25.04.2022, it was} informed by the officers^of II:|._.yondent^{FI that the} q,l

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subject^{propefi has been auctioned to some other} persons. Therefore,^{it is requested that the respondent} FllAuction^{Purchaserbe restrained from creatingany} third^{party interestin the subject propefi and also} direct the respondent^{FI to refund entire amount} Rs.52,70 ,7501-^{deposited in the auction dated} 05.09.2019 and^{25.09.2020along with interest @12olo} per annum and also direct^{the respondent FI to submit} the record of^{auction proceedings and it is also prayed} to set aside^{the sARFAESIaction in respectof the} subject^{propefi and award payment of compensation} and cost to the^aPPIicant.

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Reply to the^{sA filed on behalf of the respondent} FI. It is submitted^{that the subject propefi was put to} auction for the^{first time in september 20L9 at an} auction^price of^{Rs.66,35,000/- and the applicants} having knowledge of^{the pendency of proceedings} against Asha^{technologies made a bid for an amount} of Rs.66,35,000/-^{and they were declared as the} highest bidder and^{the applicantsdeposited 25o/o of} the sale consideration^{being Rs.16,58,750vide} earnest money^{depositof Rs.6,63,4001- and RTGS of} Rs.9,95,3501-, thereby^{issuing a sale confirmation} letter dated 13.09.2019.^{Through the same notice the} applicants were also^{informedthat the balance} amount was required^{to be made within 15 days,} failing which the amounts^{already paid would stand} foffeited. As the applicants^{failed to depositthe} balance amount,^{therefore, the amountpaid by the} applicants stands^{forfeited as clearly prescribed under} Rule 9(5) of Security^{Interest (Enforcement)Rules,} 2002. It is further^{submittedthat once again the} subject^{property was put tq-audionfor Rs'56'48'000/-} 5,1 i

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and this time also, the applicants^{made a bid for an} amount of Rs.56,48,000/- and once again^the applicant's bid was duly accepted^{under Rule 9 (2) and} they were declared as the highest bidder.^The applicants deposited 25o/o of the sale^{consideration} being Rs.14, tz,OOOl- vide earnest money deposit^of Rs.5,65,000/- and RTGS of Rs.8,47,0001-,^thereby issuing a sale confirmation letter dated 28.09.2020. Through the said notice the applicants were^informed that the balance payment was required to be^made within a period of 15 days i.e. on or before 28.09.2019, failing which the amounts already^paid would stand forfeited without any further notice and this time also the applicants failed to deposit the entire amount to the Respondent FI within the^prescribed time and the same fact has been admitted by the applicants themselves in^para L2 of the SA leading to the forfeiture of the amount deposited by the SA. It is further submitted that the forfeiture had taken^place Iong back and respondent FI has no^power to revoke the forfeiture. Further, the propefty in^question has already been successfully auctioned and sale ceftificate dated 2L.03.2022 has been issued in favour of the successful bidder. Therefore, it is^prayed that the SA of the applicant may be rejected.

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Heard the Ld. Counsels of both the parties and perused the record.

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From the perusal of the pleadings submitted by the respective^pafties and the arguments it is evident that the applicant is submitting that the applicant has pafticipated in the e.auctiol_on 05.09.2019 and has

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deposited the earnest^{money and also paid some} other amount subsequently^{but he could not deposit} the entire amount within the^{specified time fixedby} the respondent FI. It is also^{submittedthat the} e.auction was again conducted^{on 25.09-2020and on} 28.09.2020 the applicant^{has again deposited ceftain} amounts with the respondent^{FI but could not deposit} the remaining amount. It is^{submitted that the} respondent may be directed to^{refund the entire} amount of Rs.52,70,7501- deposited^{by the applicant} in these auctions alongwith the^{interest. The Ld.} counsel of the respondent has admitted^{that the} applicant has^participated in the^{e.auctionand has} deposited the money as claimed^{by the applicant. It is} submitted that the applicant failed to^depositthe remaining amount as^per condition mentioned^{in the} auction notice, therefore, the amount^{deposited by the} applicant has been forfeited as^{per provision contained} in Rule 9(5) of the SARFAESI Rules. It^{is submitted} that after depositing the earnest^{money the successful} bidder has to deposit the remaining amount^{within 15} days and if the successful bidder fails to deposit^the entire amount within the stipulated time, the^amount deposited by the successful bidder is^liable to^be forfeited. Therefore, it has been submitted that^the amount deposited by the applicant^{has been forfeited} as per^provision contained in the SARFAESI^{Rules and} therefore, the application of the applicant^{is liable to} be dismissed. In this regard, I^{have gone through the} provisions contained in Rule 9(5) of the SARFAESI Rules. I have also^gone through^{e.auction noticeand} the conditions mentioned in the^{auction notice. As per} provisions contained in BUI*1S1S;, if the successful a,

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bidder fails to^pay the^{remainingamountwithinthe} time specified in the auction^{notice, the amount} deposited by the bidder^{shall be forfeited.Therefore,} the amount deposited by the^{applicanthas been} forfeited as per^provisions contained^{in SARFAESI} Rules. There is no duty on the^{respondent FI to inform} the bidder who has failed to^{deposit the entire amount} within the time specified in the^{auction noticefor} subsequent sale. Therefore, the^{applicantcannot claim} any amount as^{per provisions contained in the} SARFAESI Rules and the amount^{depositedby the} applicant has been rightly^{forfeited by the respondent} FI. On the basis of above^{discussion, the SA} application of the applicant^{is tiable to be dismissed.}

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ORDER

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The present SA stands dismissed.^{File be consigned to} record.

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Date : 13. t2.2023

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(SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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This^judgement has been signed,^{dated and} pronounced in open court.

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7 t4/>

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Date : 13. L2.2023

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(SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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Sh Mohit Verma v. Edelweiss Asset Reconstruction Company

Case brief

What is this about?

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Sh Mohit Verma v. Edelweiss Asset Reconstruction Company

Case brief

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What did the court decide?

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