Dismissed

Parveen Prakash Mahtani v. Punjab National Bank

DRT24 May 2023SA/94/2023

Case brief

AI extract

What is this about?

Single Judge ADM MISCELLANEOUS IN THE HIGH COURT OF JUDICATURE OF MUMBAI DISMISSED SAFETY PETITION SEEKING QUASHING OF CANCELLED AUCTION. COURT HELD SALE AT RESERVE PRICE REQUIRES BORROWER CONSENT UNDER SECURITY INTEREST RULES 2002. DIRECTED BANK TO CONDUCT FRESH AUCTION EXPEDITIOUSLY.

What did the court decide?

Petition dismissed; Bank directed to conduct fresh auction expeditiously.

Parveen Prakash Mahtani versus Punjab National Bank — Banking and Recovery | DRT (2023)

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SA 94 of 2023

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24/05/2023	Ex. No.	Before Presiding Officer Dr. Rekha G. Dhakar, DRT-1, Mumbai. *Roznama in SA 94 of 2023* *Parveen Prakash Mahtani Vs Punjab* *National Bank*	Next date
		Advocate appeared for the Applicant. Advocate Raj Dani i/b Law Focus appeared for the Respondent No.1. 1. Heard both sides on the present SA. 2. The question which is raised in the present matter is that whether the sale which was done successfully then how it may be quashed and also prayed that the successful bidder may be allowed to deposit the remaining amount of the auction. 3. Ld. Counsel for the Applicant of SA submits that after receiving the EMD and 25% of the highest bid, why and how the Respondent can cancel the auction and the said arbitrary action of the respondent bank may be quashed and the Applicant may be allowed to

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SA 94 of 2023

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deposit the remaining amount of auction.

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Ld. Counsel for the Respondent Bank informed that the bank did not get higher price than the reserve price therefore as per Proviso of the Rule 9 (2) of the Security Interest Rules, 2002, the consent of the Borrower was necessary but the Borrower did not give consent for the auction on the reserve price, therefore, the bank subsequently cancelled the auction and the refunded the amount deposited by the Applicant. 5. Before adverting the rival contentions of the parties, the relevant provision i.e. 2nd Proviso of Rule 9(2) of the Security Interest Rule 2002 is reproduced hereunder: “ Provided further that if the Authorised Officer of the bank fails to obtain the prices higher than the reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at such the price. ”

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SA 94 of 2023

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(emphasis provided) 6. Thus, in view of 2nd Proviso of Rule 9
(2) of the Security Interest Rules, 2002,
in case the bid is received for reserve
price only then the consent of the
borrower is also required before giving any effect to the sale.
7. In the present matter in the auction
dated 24/03/2023 bid was received on
the reserve price only i.e. Rs.
1,02,60,000/-. However, as informed by
the Ld. Counsel for the Respondent
Bank that borrower did not give his
consent for the said sale. Thus, the said
sale was quashed and the amount
deposited by the Applicant herein, was
already refunded to the Applicant. The
action of the Respondent Bank is in
accordance with the Rules, 2002.
8. In view of present fact and
circumstances, the present SA has no
merit hence dismissed accordingly.
9. At this stage Ld. Counsel for the
Applicant submits that the Respondent
may be directed to takeexpeditious
steps for fresh auction.

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SA 94 of 2023

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10.The Authorised Officer of the Bank is expected to take expeditious steps as requested, in accordance with the SARFAESI Act 2002, and the Rules thereto.

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File be closed and consigned to record.

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P.O. DRT-I

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Tjs/-3

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Parveen Prakash Mahtani v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Parveen Prakash Mahtani v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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