Dismissed

Nisith Keshari Constructions Pvt. Ltd. v. Indian Bank

DRT3 Jan 2025SA/334/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a special application by intending bidders seeking to quash an e-auction of property sold by Indian Bank. The court held that there was no evidence of fraud or collusion between the bank and the successful bidder, and the failure to register did not justify setting aside the confirmed sale or treating the matter as functus officio after the auction was held.

What did the court decide?

Errors relating to the sale notice and e-auction process were rejected; no inter se bidding was allowed.

Nisith Keshari Constructions Pvt. Ltd. versus Indian Bank — Company and Corporate | DRT (2025)

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DEBTS RECOVERY TRIBUNAL – 1, KOLKATA JEEVANSUDHA BLDG. 9^TH FLOOR, 42/C, J.L.NEHRU ROAD, KOLKATA – 700071

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BEFORE SHRI AMBUJA MOHAN DAS, PRESIDING OFFICER

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SA 334 of 2024

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Nisith Keshari Constructions Pvt. Ltd., an existing company within the meaning of The Companies Act, 2013 having its registered office at 221, 1^st Floor, Tirath Mansion, Main Road, Ranchi – 834001, Jharkhand.

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Nisith Keshari, Director, carrying on business at 221, 1^st Floor, Tirath Mansion, Main Road, Ranchi – 834001, Jharkhand.

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................. Applicants

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VERSUS

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Indian Bank, a nationalized bank having its office at Stressed Asset Management Large (SAML) Branch, Kolkata, 1^st Floor, 14, India Exchange Place, P.S.- Hare Street, Kolkata – 700001 (IFSC Code IDIB000M567) Branch Code : M567)

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The Authorised Officer, Indian Bank, a nationalized bank having its office at Stressed Asset Management Large (SAML) Branch, Kolkata, 1^st Floor, 14, India Exchange Place, P.S.- Hare Street, Kolkata – 700001.

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PSB Alliance Pvt. Ltd., a company within the meaning of the Companies Act, 2013 having its registered office at Unit – I, 3^rd floor, VIOS Tower, Sewri – Chamber Road, near Wadala Track Termina, Sion Mumbai – Maharastra, Pin- 400037.

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Manbhum Ispat Pvt. Ltd., a company incorporate under the Companies Act, 1956 having its registered office at 20B, Abdul Hameed Street, 7^th floor, Block 7A, Kolkata – 700069.

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Maheshwary Ispat Limited (in liquidated represented by the Liquidator appointed under IPC 2016 by the Hon’ble National Company Law Tribunal, Kolkata in T.P. No. 22/KB/2022 having his office at D-404, City Centre, Sector – I, Salt Lake City, Kolkata – 700064.

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............Respondents

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Present:

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For Applicant/: Mr. Nimesh Mishra, Mr. D. Basu Roy, Intending Purchaser Mr. Souritra Ganguly and Ms. M. Bhattacharjee Ld. Counsels For Respondents: Mr. Mr. Shiv Mangal Singh Ld. Counsel For Auction Purchaser/:Mr. Siddhartha Chatterjee, Respondent no. 4 Ms. Ankita Upadhyay, Mr. Abir Lal Ghosh, Ms. Labony Roy and Mr. Raja Roy, Ld. Counsels

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J U D G M E N T

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Delivered on 3^rd January, 2025

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This SA alongwith IA/2582/2024 have been filed by the Applicants who are the intending buyers wanted to participate in the e-auction conducted by the Respondent Bank on 08/10/2024.

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It is alleged by the Applicant that on 06/09/2024 the Applicant came to know about the sale notice dated which was published in the Financial Express for sale of the schedule property. The sale was held through https://ebkray.in (PSB alliance Pvt Ltd.) which is Respondent no. 3 in the SA.

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Respondent no. 2 is the Authorised Officer of the Respondent no. 1 Bank. Applicants tried to register themselves in the online portal of https://ebkray.in (PSB alliance Pvt Ltd.) on 06/10/2024. But inspite repeated efforts they were not allowed to complete registration process. Applicant no. 1 sent email on 06/10/2024 to Respondent no. 3 and annexed the letter vide annexure ‘C’. Respondent no. 3 sent email on 07/10/2024 to the Applicant to get CIN verification from the Bank officials. The said e mail has been annexed vide Annexure ‘D’. Applicant no. 1 immediately took effort to get CIN verification as advised by Respondent no. 3. The CIN verification was duly completed by the HDFC which is the Banker of the petitioner and communicated to Respondent no. 3 vide letter dated 07/10/2024 which is annexed as Annexure ‘E’. Thereafter, on 07/10/2024 the Applicant sent email to Respondent no. 1 to take up the issue for registration of e-auction to Respondent no. 3 immediately so as to participate in the e-auction and has annexed the mail vide Annexure ‘F’.

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Thereafter Respondent Bank vide letter dated 07/10/2024 at 5:01 P.M. requested Respondent no. 3 to resolve the issue immediately treating the matter urgent. Applicant annexed the email vide Annexure ‘G’

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It is alleged by the Applicant that Respondent no. 3 should have resolved the issue. Thereafter Applicant no. 3 issued an email dated 07/10/2024 at 7:18 P.M. to Respondent no. 1 and communicated that the name of the Applicant no. 1 was not registered despite completing all the formalities and Applicant no. 1 forwarded all the documents through online portal.

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On 07/10/2024 Respondent no. 1 at 7:57 P.M. informed the Respondent no. 3 that all documents have been downloaded which are verified and approved and requested for doing the needful and resolve the issue. Applicant annexed that email vide Annexure ‘I’.

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It is alleged by Applicant that the issue of technical glitch was not properly addressed by Respondent no. 3 and it continued to 08/10/2024. Respondent no. 1 requested to participate in the e-auction and allowed to deposit earnest money. The e mail dated 08/10/2024 is annexed vide Annexure ‘J’. On 08/10/2024 auction conducted and Respondent no. 4 is declared Successful Bidder.

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Applicant wrote a letter on 14/10/2024 to Respondent no. 1 and 3 to set aside the auction already held on 08/10/2024 as e-auction portal was malfunctioning for which applicant was prevented to participate in the

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e-auction. The Applicant has annexed said e mail as Annexure ‘K’. Thereafter no communication received from Respondent no. 1. Respondent no. 1 has proceeded to take steps to complete the process of sale in favour of Respondent no. 4.

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The Applicant offered Respondent no. 1 for a sum of Rs. 62 Crore to purchase the property which is higher than price offered by Respondent no. 4. Ld. Advocate for the Applicant further submitted that the Applicant may be allowed to bid against Respondent no. 4.

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With the above pleadings the Applicant prayed for quashing e-auction already held on 08/10/2024 as per Rule 9(6) and to reject the Sale Certificate under Rule 7(2) of the Security Interest Rules,2002 with interim order and prayed for inter se bidding between Respondent no. 4

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and the Applicant. Applicant also filed IA/2582/2024 with similar pleadings with prayer to quash the sale held on 08/10/2024 with other reliefs.

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Applicant has also filed additional affidavit annexing order of the Hon’ble High Court in CAN/1/2024 which is filed in WPA 26182/2024 wherein the Applicant prayed for leave to withdraw contempt petition but no order of the Hon’ble High Court has been filed on the application for withdrawal of petition.

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Ld. Advocate for Respondent nos. 1 and 2 objected to the application in SA and IA that Applicant could not register themselves in e-portal conducted by Respondent no. 3 and the bank has nothing to do if there is any technical glitch.

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It is submitted by the Ld. Advocate for the Respondent Bank that Respondent no 4 has registered in e-portal and deposited EMD and e auction held and Respondent no. 4 has become Successful Bidder. The Applicant has no case, the sale cannot be set aside. So prayer for interse bidding is opposed by the Respondent Bank.

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None appears for Respondent no. 3.

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Respondent no. 4, is the Successful Bidder and has challenged the SA as well as IA filed by the Applicant and submitted that the sale has been conducted successful and Respondent no. 4 become Successful Bidder and Sale Certificate has been issued.

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Respondent Bank has filed Written Notes of Argument. SA and IA was heard on merit on 25/11/2024 and order was reserved. Annexure ‘A’ is the Sale Notice issued on 03/09/2024. As per the Notice Intending Bidders/Purchasers are requested to register with online portal in https://ebkray.in (PSB alliance Pvt Ltd.) using their mobile number and email id. Intending Bidders are requested that after completing e-KYC intending bidder have to transfer their EMD amount in their e-wallet by i.e. before the e-auction date and time in the portal. The registration of e-KYC must be completed well in advance before auction. It is informed to all the intending bidders on 03/09/2024 that date of sale shall be on 08/10/2024. The bidders interested may inspect the property and related documents up

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to date at their own expenses from 09/09/2024 to 07/10/2024 between 10 A.M. to 7:00 P.M.

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As per the Sale Notice bidders have to register their bid or tender in e-portal from 04/09/2024 to 07/10/2024. The Applicant tried to register themselves as bidder in e-portal as per e-mail dated 06/10/2024 but they could not register themselves as the CIN verification could not be done.

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The Respondent Bank also on mail of the Applicant sent mail to https://ebkray.in (PSB alliance Pvt Ltd.) and the Applicant has to confirm about the verification and approval. The subsequent correspondent filed by the Applicant by e-mail but Respondent no. 3 could not register the applicant as bidder due to want of CIN verification which the applicant alleged to be a technical glitch.

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The Respondent Bank also cooperated and requested to respondent no. 3 and the banker of the Applicant to get CIN verification. But ultimately Applicant could not register as bidder before the date of auction and e-auction held on 08/10/2024 and Respondent no. 4 became Successful Bidder.

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The documents i.e. e-mail annexed did not speak of any conspiracy of the Respondent Bank for the alleged technical glitch for which the Applicant could not register themselves as bidder in the https://ebkray.in (PSB alliance Pvt Ltd.) portal.

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At the time of hearing Ld. Advocate for the Respondent Bank has filed bid history of 42 attempts. In the 42^nd attempt the bid was accepted at Rs. 55,10,00,000/-.

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Ld. Advocate for the Sarfaesi Applicant has relied upon the authority of Hon’ble Supreme Court in the matter of Agarwal Tracom vs. Punjab National Bank & ors., in which Hon’ble Supreme Court has observed that Auction Purchaser is aggrieved by the action of the secured creditor for forfeiting their money. As per the decision Successful Bidder or the Auction Purchaser may be aggrieved by action of the secured creditor

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pursuant to the sale but this judgment does not dealt with any issue of intending bidder unable to register as bidder in e auction.

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Ld. Advocate for the Sarfaesi Applicant has also relied upon the authority of Hon’ble Supreme Court in the case of ITC vs. Blue Coast Hotels Ltd & ors. In this authority Ld. Advocate for the Sarfaesi Applicant has relied paragraph 48 and 49. In this case, the Hon’ble Supreme Court observed that the creditor did not have actual possession of the secured asset but only a constructive or symbolic possession. In this authority Hon’ble Supreme Court held that even after sale on constructive or symbolic possession the creditor is liable to deliver physical possession as contemplated by Section 8 of the Transfer of Property Act.

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In this authority Hon’ble Supreme Court at paragraph 49 observed on the finding of the Hon’ble High Court that there was fraud and collusion between the creditor and the auction purchaser. But in this case there is no evidence of fraud and collusion between the Respondent Bank and the Successful purchaser/Respondent no. 4 creating technical glitch for which applicant could not participate in the e-auction.

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Ld. Advocate for the Sarfaesi Applicant has also relied upon the authority of Hon’ble Supreme Court in the case of Lakshmanswami Gounder vs. C.I.T. Selvamani & Ors paragraph 4 and 5. This matter is related to the issue of publication of sale notice. There is no issue regarding technical glitch in the https://ebkray.in (PSB alliance Pvt Ltd.) portal. This judgment is not relevant for this case.

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Ld. Advocate for the Sarfaesi Applicant has also relied upon the authority of Hon’ble Supreme Court in the case of Divya Manufacturing Co.,Tirupati Wool ... vs. Union Bank Of India , The Official Liquidator & ors. In this case Hon’ble Supreme Court has held that :

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“Court is empowered to set aside the sale even though it is confirmed for the interests of creditors, contributories and all concerned and for public interest. It is also held by the Hon’ble Supreme Court that it cannot be said that the Court became functus officio after the sale was confirmed.”.

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In the said case the sale was conducted for inadequate in consideration for which the Hon’ble Supreme Court observed that sale even confirmed can be set aside by court. But the issue in this case is not inadequate in consideration.

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Ld. Advocate for the successful Purchaser/Respondent no. 4 distinguished the judgments that the Court can set aside sale for inadequate in consideration but in this case the Applicant offered for inter se bidding which is not permissible in law as there is no fraud or collusion in the sale. It is also submitted by Ld. Advocate for the successful Purchaser/Respondent no. 4 that the Applicant’s failure to register themselves in the https://ebkray.in (PSB alliance Pvt Ltd.) portal cannot be attributed to successful Purchaser or the creditor as a fraud or collusion against the Applicant.

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Ld. Advocate for the Sarfaesi Applicant has filed the order of the Hon’ble DRAT, Allahabad dated 05/09/2019 in the matter of Sri Rajat Mandal vs. State Bank of India wherein Hon’ble DRAT observed that there can be interse bidding between the Auction purchaser and the aspirant bidder”

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Ld. Advocate for the Sarfaesi Applicant has also filed the judgment of the Hon’ble DRAT, Kolkata in the matter of Authorised Officer, IOB vs. Ranit Agarwal in Appeal/01/2001 wherein Hon’ble DRAT set aside the order of DRT, Cuttack this authority is not relevant to this case. Ld. Advocate for the successful Purchaser/Respondent no. 4 has relied upon the authority of Hon’ble Supreme Court of India in the matter of Valji Khimji & Co vs O.L. Of Hindustan Nitroproduct Ltd.& Ors. This authority was also relied by the Applicant which was also argued by the Respondent Bank and Respondent no. 4. In this authority Hon’ble Supreme Court has held that :

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“11. It may be noted that the auction sale was done after adequate publicity in well-known newspapers. Hence, if any one wanted to make a bid in the auction he should have participated in the said auction and

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made his bid. Moreover, even after the auction the sale was confirmed by the High Court only on 30.7.2003, and any objection to the sale could have been filed prior to that date. However, in our opinion, entertaining objections after the sale is confirmed should not ordinarily be allowed, except on very limited grounds like fraud, otherwise no auction sale will ever be complete.”

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In this case Applicant complain of non- registration of their bid in https://ebkray.in (PSB alliance Pvt Ltd.) portal before the Respondent no. 3 who conducted the e-auction. It is alleged by the Applicant that they could not get themselves register and deposit bid amount due to non-verification of CIN. It is also alleged that there was some technical glitch which Respondent no. 3 could not resolve. But the applicant could not make any allegation against creditor bank as the e-mails speak that they wanted that the applicant get registered before Respondent no. 3 which Applicant could not do whether of their own mistake or technical glitch. It is also not proved by the Applicant that there was technical glitch. There is no evidence of any conspiracy between Respondent Bank and Respondent no. 4/ Successful Bidder to create technical glitch for which Applicant could not register in https://ebkray.in (PSB alliance Pvt Ltd.) portal.

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Ld. Advocate for the Sarfaesi Applicant has relied on the authority of Hon’ble Supreme Court in the matter of M/S. Janatha Textiles & Ors vs Tax Recovery Officer and others. In this authority the Hon’ble Supreme Court relied upon other authorities which discussed distinction between bona fide purchaser in an auction sale in execution of a decree to which he was not a party stood on a distinct and different footing from that of a person who was inducted as a tenant by a decree-holder-landlord. This authority is not relevant to this case.

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On the pleadings and evidence filed by the Applicants and authorities cited by the Applicants as well as Respondent no. 4/Successful Bidder there is no evidence of any collusion between the creditor Bank and the Auction Purchaser for which the Applicant could not register in

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https://ebkray.in (PSB alliance Pvt Ltd.) portal and could not participate in the bid. The offer of the Applicant for inter se bidding cannot be allowed as auction was already held on 08/10/2024 and there is no illegality or fraud in the auction sale. Therefore SA and IAs filed by the Applicant are liable to be dismissed. It is ordered as follows:

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O R D E R

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SA/334/2021 and IA/2582/2024 are dismissed on contest

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against the Respondents.

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Copy of the Judgment/Final Order be uploaded in the

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Tribunal’s website.

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File is consigned to the Record Room.

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(Dictated to P.S., transcribed by her, corrected, signed and pronounced by me in the open Court on this the day 3^rd January, 2025.

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(Ambuja Mohan Das)

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Presiding Officer

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	Order Sheet (continuation)
Case No. SA/334/2024	NISITH KESHARI CONSTRUCTIONS PVT LTD. Vs. BANK	INDIAN
Date of the Order	Order with Signature	Office action with date and dated Signature of Parties when necessary

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03/01/2025	Present:
	For Applicant/: Mr. Nimesh Mishra, Mr. D. Basu Roy, Intending Purchaser Mr. Souritra Ganguly and Ms. M. Bhattacharjee,Ld. Counsels
	For Respondents: Mr. Mr. Shiv Mangal Singh Ld. Counsel For Auction Purchaser/: Mr. Siddhartha Chatterjee, Respondent no. 4 Ms. Ankita Upadhyay, Mr. Abir Lal Ghosh, Ms. Labony Roy and Mr. Raja Roy, Ld. Counsels Heard Ld. Counsels for the parties on 25/11/2024. The detailed order in nine pages annexed separately. The gist of the order is as follows:
	O R D E R
	SA/334/2021 and IA/2582/2024 are dismissed on contest against the Respondents. Copy of the Judgment/Final Order be uploaded in the Tribunal’s website.
	File is consigned to the Record Room. (Dictated to P.S.,transcribed by her, corrected, signed and pronounced by me in the open Court on this the day 3^rd January, 2025.
	(Ambuja Mohan Das) Presiding Officer

Nisith Keshari Constructions Pvt. Ltd. v. Indian Bank

Case brief

What is this about?

What did the court decide?

Nisith Keshari Constructions Pvt. Ltd. v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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