Borrower alleged the bank fraudulently induced him to deposit Rs.15 lakh by issuing a fresh Section 13(4) notice after his property had already been sold in e-auction. The Court held the right of redemption ended on publication of the auction notice, declined writ interference citing alternative remedies, and dismissed the petition.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
CWP-34645-2024 (O&M)
Sr. No.129
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CWP-34645-2024 (O&M) Date of Decision : 19.12.2024
Ram Pal …Petitioner
Versus
State of Hary a na and others
…Respondents
CORAM : HON’BLE MR. JUSTICE ANUPINDER SINGH GREWAL HON’BLE MS. JUSTICE LAPITA BANERJI
Present : M s. Anu Pal, Advocate, f o r the petitioner.
M r. K.P.S.Dhillon, Advocate, f o r respondents No.2,6,7,8,9,10. ***
ANUPINDER SINGH GREWAL, J. (Oral)
The petitioner is seeking direc t ions to respondent No.1 for taking approp r iate action against respondent No.2 for fraudulent practice. Further issua n ce of writ in the nature of m a ndamus directing respondent No.2 for handing over the possession and titl e deeds of the sole residential house of the p etitioner as well as direction t o respondent No.2 to refrain from getting t h e sale deed registered and othe r directions have been sought. 2. Learned counsel for the petiti o ner submits that respondent No.2-Bank ha s behaved in a fraudulent mann e r and deceived the petitioner into depositin g Rs.15 lakh on 05.12.2024 in p ursuance to the notice issued under Sectio n 13(4) of the SARFAESI A ct (for short ‘the Act’) on 03.12.2024. S he submits that the responde n t No.2-bank had issued the notice under Section 13(4) of the Act on 0 3.12.2024 (Annexure P-14) without discl o sing that the secured asset had already been sold by way of auction. Thus, the officials of the bank misle d the petitioner into depositing
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the sum of R s.15 lakh on 05.12.2024. She further submits that prior to 03.12.2024, t h e petitioner had not received a n y notice either under Section 13(2) or unde r Section 13(4) of the Act.
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the Act in th e year 2022 wherein the same a mount had been mentioned. Merely becau s e the petitioner had deposite d some money in his saving account on 0 5 .12.2024, it would not give h im any right to thwart the auction which had been carried out by the re s pondent Bank in September, 2024. We, th e refore, do not find any good gr o und to interfere in the matter at this stage w hile exercising writ jurisdiction . It is necessary to refer to the Section 13(8) o f the SARFAESI Act, which is reproduced hereunder:
“Section 13(8) in The Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002
( 8 ) Where the amount of dues o f the secured creditor together w ith all costs, charges and e x penses incurred by him is t e ndered to the secured creditor a t any time before the date of p u blication of notice for public a uction or inviting quotations o r tender from public or private treaty for transfer by way of l e ase, assignment or sale of the s ecured assets,-(i) the secured a s sets shall not be transferred b y way of lease assignment or s a le by the secured creditor; and (ii)in case, any step has been t a ken by the secured creditor fo r transfer by way of lease or a s signment or sale of the ass e ts before tendering of such a m ount under this subsection, no further step shall be taken by s u ch secured creditor for transfer by way of lease or a s signment or sale of such secur e d assets.”
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“ X XX XXX XXX
iii) In accordance with the unamended Section 13(8) o f the SARFAESI Act, the right of the borrower to redeem the s e cured asset was available till the sale or transfer of such s e cured asset. In other word s , the borrower’s right of r e demption did not stand termin a ted on the date of the auction s a le of the secured asset itsel f and remained alive till the t r ansfer was completed in favou r of the auction purchaser, by r e gistration of the sale certificat e and delivery of possession of t h e secured asset. However, the a mended provisions of Section 1 3 (8) of the SARFAESI Act, ma ke it clear that the right of the b o rrower to redeem the secur e d asset stands extinguished t h ereunder on the very date of p ublication of the notice for p u blic auction under Rule 9(1) of the Rules of 2002. In effect, t h e right of redemption availab l e to the borrower under the p r esent statutory regime is drast i cally curtailed and would be a v ailable only till the date of p u blication of the notice under Rule 9(1) of the Rules of 2002 an d not till the completion of the s a le or transfer of the secured a sset in favour of the auction p u rchaser.”
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4 3 . Unfortunately, the High Co u rt overlooked the settled law t h at the High Court will ordin a rily not entertain a petition u n der Article 226 of the Constit u tion if an effective remedy is a v ailable to the aggrieved pers o n and that this rule applies w ith greater rigour in matters involving recovery of taxes, c e ss, fees, other types of public m oney and the dues of banks a n d other financial institutions. I n our view, while dealing with t h e petitions involving challen g e to the action taken for r e covery of the public dues, etc. the High Court must keep in m ind that the legislations enac t ed by Parliament and State L e gislatures for recovery of s u ch dues are a code unto t h emselves inasmuch as they no t only contain comprehensive p r ocedure for recovery of t h e dues but also envisage c o nstitution of quasijudicial b odies for redressal of the g r ievance of any aggrieved pe r son. Therefore, in all such c a ses, the High Court must insist that before availing remedy u n der Article 226 of the Constit u tion, a person must exhaust t h e remedies available under the r elevant statute.”
S i milar view was taken by the S upreme Court in the case of “South Indian Bank Ltd. Vs. Naveen Mathew Philip and another (2023) 4
SCR 18”. The relevant extract of the same is r e produced hereunder :-
“ X XX XXX XXX W e are conscious of the fact tha t the powers conferred under A r ticle 226 of the Constitution o f India are rather wide but are r e quired to be exercised only in extraordinary circumstances i n matters pertaining to proceed i ngs and adjudicatory scheme q u a a statute, more so in co m mercial matters involving a l e nder and a borrower, when the legislature has provided for a s p ecific mechanism for appropri a te redressal.”
would be at li b erty to seek recourse to the alt e rnative remedy in accordance
with law.
(ANUPINDER SINGH GREWAL) JUDGE
(LAPITA BANERJI) JUDGE
December 19, 2024 vandana Whether spea k ing/reasoned : Yes/No Whether repo r table : Yes/No
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3 issues framed by the court
Whether the writ court should interfere with a completed SARFAESI auction where the borrower deposited Rs.15 lakh after the auction notice was published.
Whether the borrower's right of redemption under Section 13(8) survived publication of the auction notice.
Whether disputed questions about service of the Section 13(4) notice can be adjudicated in writ proceedings.
Colour shows how this judgement treated each authority
CELIR LLP Vs. Bafna Motors (Mumbai) Private Limited and othersRelied on¶8
(2024) 2 SCC 1 · Who else cites this
United Bank of India Vs. Satyawati Tandon and othersRelied on¶11
(2010) 8 SCC 110 · Who else cites this
South Indian Bank Ltd. Vs. Naveen Mathew Philip and anotherRelied on¶11
(2023) 4 SCR 18 · Who else cites this
3 provisions across 1 enactments
Ram Pal
State of Haryana
Anupinder Singh Grewal
Lapita Banerji
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
