Dismissed

Sri. H. Sanjay Kumar v. Canara Bank and 15 Others

Telangana HC27 Apr 2022WP/1291/2021

Case brief

AI extract

What is this about?

Guarantor of a defaulting partnership firm challenged the bank's e-auction of mortgaged property held on 05.12.2020 on a 2017 sale notice, alleging want of fresh notice and valuation and that the purchaser was the managing partner's wife. The High Court dismissed the writ petition, holding it barred by the alternative remedy under Section 17 and failing on merits.

What the court decided

AI extract

Sri. H. Sanjay Kumar Vs Canara Bank and 15 Others — Banking and Recovery | Telangana HC (2022)

¶1

HIGH COURT^{FOR THE STATE OF TELANGANA} AT HYDERABAD

¶2

(SPecial Original^{Jurisdiction)}

¶3

WEDNESDAY,^{THE TWENTY SEVENTH DAY OF APRIL} TWO THOUSAND^{AND TWENTY TWO}

¶4

PRESENT

¶5

THE HONOURABLE^{SRI JUSTICEUJJAL BHUYAN} AND THE HONOURABLE^{SMT JUSTICEP.SREESUDHA}

¶6

WRIT P ETITION^{NO:1291 0F 2021}

¶7

Betwee n:

¶8

Sri. H. Saniav^{Kumar,S/o. Sri H Kishan'} {9ed^{about 52 Years'Occ:Business'R/o} E^:i, "i, i *'"1 ;|iL ii c"^io "v, x n rr^{rra n} a^{Roa d' s6 cu nd e ra bad} -^500009'

¶9

...PETITIONER

¶10

AND

¶11

Canara^{Bank, Nizamabad Branch,Godown-Road'.Nizamabad District Also at'} ffi^{. ;; fi;;rgJilRM,it rijii""i, ci|.ir" grice buildino. MCH No.1 0-3-1 63N} and 10-3-163/A.^{protr.ro. ii's] 5V Nj"Szt'e"side rail ruiTiyam'Secunderabad} -⁵⁰⁰⁰²⁶

¶12

2 M/s. H. Gangam^{Cloth Merchants,H' Gangaram Malls R P' Road' Nizamabad} -⁵⁰³⁰⁰¹

¶13

3 Sri.H Sampath^{Kumar,S/o Sri.H Gangaram, Aggd about 60 Years Occ:} Eljlr LIJr. H,j. ii.^{r.'r-o. slo-sgzr), ca nsa\itayam I oppApoorvaschool'} Khaleelw;di, Nizamabad -^503001.

¶14

4 Sri. H, Gangadhar,^{S/o. Gangaram,Age^d about67.Years' Occ: Busine:s'} ilL.'iru-tiro'. soZ^{vjmstrirariisJvotnic'est, Plot No,109/110'Heart cup} b"ff;;U;;, r-ct^{si. Lrnir"eGar"6en,Kothagudam'Hvderabad}

¶15

5 Sri. H. Ravi Rai, Sio.^{Gangaram, Agedabout 58 Years' Occ: Business' R/o'} Eirt'N".). rtr"tiiat^{ttter,ru liagar,Be-gumpet,Hyderabad'}

¶16

6 Sri. N. Viiava Lakshmi,^{W/o. N. Ashok Kumar,Aged about 62 Years'Occ:.} il;r'.;;t'i;:R/;:'ti.r'r".'s-o-sgili,^{c"ng' opp'AptorvaSchool'Khaleelwadi'} Nizamabad -^503001.

¶17

7 Sri. H. Narsaiah,^{S/o. Late H. Lalchaiah,Aged.about 83 Years'Occ:} Eijrii"lt,'nl/".^{H.r.ro.so-sro/20, saraswaihi Nagar'Nizamabad}

¶18

B Sri. illl.' H. Krishna cr'r'' it;,lrpi;;i^{Kumar, S/o. Narasaiah, Li;["d, iooTsoa, cheiov Aged q=bout rrade centre' 63 Years' Pa Occ: Business'rklane'} Secunderabad

¶19

u si^{n e s s R/ o}

¶20

'^{3': + $iek ?fi'[': aEi'ABi: 8f, :l"if *'1J J"""188 ::-':} Secunderabao

¶21

,oR[i3]":P:lBii*lffi li$:!S&$?itfl^{3iHi"?"'"""S;R'""1'N"?[i"?Hn"'} sLcunderabao

¶22

,,"rtui+:,[S"xt'if i;'J]5b'J38i'i8eti3;+l:'J"t33li;fF?'?'l?!i" Secunderabao 3l$T'I:%';"?'::'#?l;?y*'

¶23

"H,"'.33lpsi:;5'Lq,mg5'$?t'tsi3f,

¶24

"H'ffi:ffihrffi :#d#?r:ilHjr'?:"rr:3;:s:'I,J;3r"'"' :?*'1il:3,,,,'?'f ''|:ffi?"Y'?

¶25

'oEi,?Rxl'i3ll,,-,ffi 'lt'"dtilt%?if, 'Coad' HYderaoao'

¶26

'uPi,?i,'5li3l:r:xE'5li'3il:l[?l'A?""1'?lEYl'#3:'i'3[";5"1J'jii:'lj? Road,^Hyderaoatl ^^{-^^ .h^rrt 52 Years, Occ:HoL}

¶27

"ffii::T,.;;il(#,HfiiriHi#l,iffit'6sJffi^{::%""'il::-^.,}

¶28

Petition^{under Article 226 of the."":t:t:.':":;:} ::il.'::r:ilt:: circumstances^{statedin the affidavitfiled therew} pleased^{to issuea Writ or Order/s more particularly one in the nature of Writ of} Mandamus^{declaring the action of Respondent No 1 in conducting the e -} auction^{on O5l12l2O2Oon the basis of e - auction notice dated 20/11/2017 which} fixed^{the auction date as 27 11212017 as being arbitrary' uniust'unconstitutional} and^{contraryto SARFAESIAct and Rules made thereunderand to consequently} set^{aside auction sale dated Osllzlz[2r-'issued by the Respondent No l bank} 16 in favour^{of the respondentno}

1,, Ir 1

l'r I

IAN^{O:1 OF2021}

Petition^{under Section 151 CPC praying that in the circumstancesstated} in the^{affidavit filed in support of the petition'the High Courtmaybe pleased to} issue^{interim directionsstaying all furtherproceedings of the Hon'ble Debt} Recovery^{Tribunal- 1 in OA No' 171 of 2018 pending disposalof this Writ} Petitlon

¶37

IAN O:2^OF2021

¶38

i i i

¶39

Petition^{under Section 151 CPC praying that in the circumstancesstated} in the^{affidavit filed in support of the petition'the High Court may be pleased to} issue^{interimdirections suspendingthe auctionsale conducted on 05-12-2020 by} directing^{the RespondentNo' 16 to not changethe nature of or alienate / or} create^{any encumbranceover property bearingMp1 Nos (7-10-939' 940' 941'} 94111,^{g42, g43,944'945'946' 947 and 7-10-938/3)' situated at abutting 80'-0"} wide^{RashtrapathiRoad' Opp' District HeadQuartersHospital' Nizamabad'} pending disposal^{of this WritPetition'}

¶40

IAN^{O:3 OF2021}

¶41

Between:

¶42

ll,l,',pt1,i$Ei:ilt:?if^{Lir$!frt-[f, ls:?,{ii!'g.A{,ns'}

¶43

...PETITIONER/RESPONDENT^NO'1

¶44

And

¶45

Sri.^H Saniav^{Kumar. S/o sri H Kishan" ls"g S!::t X3.r""?1,?o3ott-} Busines ;"Fii:l^{i.5 Vii<rampuricolonv' KharkhanaKoao' r} 500009, ....RESPONDENT/WRIT^PETITIONER

¶46

M/s. H. Gangam Cloth Merchants, H. Gangaram Malls R.P. Road, Nizamabad -^503001.

¶47

Sri.H Sampath Kumar, S/o. Sri. H.Gangaram, Aged about 60 Years, Occ: Business, Rl/o. H.No.5-6-59712, Ganga Nilayam, Opp Apoorva School, Khaleelwadi, Nizamabad - 503001.

¶48

Sri. H. Gangadhar, S/o. Gangaram, Aged about 67 Years, Occ: Business, R/o. Flat No. 502, Vamshiramas Jyothi Crest, Plot No. 109/1 10, Heart Cup Coffee Lane, TCS St. Jubilee Garden, Kothagudam, Hyderabad.

¶49

Sri, H. Ravi Raj, S/o. Gangaram, Aged about 58 Years, Occ: Business, R/o. Flat No. 2, N/otilal Nehru Nagar, Begumpet, Hyderabad.

¶50

Sri. N. Vijaya Lakshmi, W/o. N. Ashok Kumar, Aged about 62 Years, Occ: Housewife, R/o. H.No.5-6-59712, Ganga Opp Apoorva School, Khaleelwadi, Nizamabad - 503001.

¶51

Sri. H. Narsaiah, S/o. Late H. Lalchaiah, Aged about 83 Years, Occ: Business, PJo. H.No. 5-6-510/20, Saraswathi Nagar, Nizamabad

¶52

Sri. H. Krishna Kumar, S/o. Narasaiah, Aged about 63 Years, Occ: Business, Fl/o. C/a Fenoplast Limited, 306/308, ChenoyTrade Centre, Parklane, Secunderabad

¶53

Sri. H. Kishan, S/o. H. Latchaiah, Aged about B1 Years, Occ: Business, R/o. C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre, Parklane, Secunderabad

¶54

10.Smt. H. Pushpa, W/o. Sri Kishan, Aged about 75 Years, Occ: House Wife, Rl/o. C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre, Parklane, Secunderabad

¶55

Sri. Mahesh Kumar, S/o. Sri Kishan, Aged about 51 Years, Occ: Business, Rl/o. C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre, Parklane, Secunderabad

¶56

H. Saparna, W/o. Krishna Kumar, Aged about 51 Years, Occ: House Wife, Fl/o. C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre, Parklane, Secunderabad

¶57

13.H. Anuradha, W/o. Late H. Dayakiran, Aged about 5g years, prof. Doctor, R/o. Flat No.402, Panorama Mansion, Renuka Enclave, Somajiguda, Rajbhavan Road, Hyderabad.

¶58

H. Rahul, S/o. Late H. Dayakiran, Aged about 32 years, Occ: Business, Rio. Flat No.402, Panorama Mansion, R-enuka Enclave, Somajiguda, Rajbh'avan Road, Hyderabad.

¶59

15.H. Ruthu, D/o. Late H. Dayakiran, Aged about 32 years, Occ: Business, Rl/o. Flat No.402, Panorama Mansion, Renuka Enclave, Somajiguda, Rajbhavan Road, Hyderabad.

¶60

l6.Harid1s Latha, W/o. Sri. Sampath Kumar, Aged about 52 years, Occ: House Wife, Rl/o. H.No.5-6-597/2, Ganga Nilayam, bpp Apoorva School, Khaleelwadi, Nizamabad - S03d01.

¶61

,..RESPONDENTS/RESPONDENTS

¶62

'1 51 CPC praying that in the circumstances^stated Petition under^Section in the affidavit^{filed in suppo(of the petition'the High Court may be pleased to} vacate the lnterim^{ordergranted in W P No129 1t2021 daled2110112021'}

¶63

lA NO:^{1 OF 2022}

¶64

Between:

¶65

1 wire Haridas Latha, R/o. H.No.5-6-597/2,^{W/o. Sri. Sampath C5ng' Kumar' Niiayam'bpp Ag-ed about 52 Apoorva Years' School'Occ: House} ktra-tbeiwaOi,^Nizamabad -^503001'

¶66

...PETITIONER^{IN I.A./}

¶67

RESPONDENT^{NO'16IN W.P.}

¶68

AND

¶69

Sri. H. Saniay^{Kumar.S/o Sri HKishan'. Aged,about 52 Years' Occ:} Business, R/o.^{B-3.vixrarn'pui coronv' x[iirnina Road' Secunderabad -} s00009.

¶70

....RESPONDENT PETITIONER^{IN W.P.}

¶71

2 Canara Bank,^{NizamabadBranchGodown--RoadNizamabad District Also at'} Reo. bv Manaser,^{ARr/, llli;ii;;i' 6."i" lltrii" buildinoIr/CH No' 10-3-163N} and 10-3-163/A,^{Plot No. as] sv"r'r#zi a"tiJ" *ii rlit"iyarn' Secunderabad} -⁵⁰⁰⁰²⁶

¶72

3 IV/s. H. Gangam^{Cloth Merchants,H' Gangaram Malls R P Road' Nizamabad} -⁵⁰³⁰⁰¹

¶73

4 Sri'HSampathKumar.S/o.Sri.H.Gangaram,Aggdabout60Years,occ: Elj.iiEJ',^{Hi.;. iil'jo s o-ssz"r'i, d'iiu"r'ririvi*IoppApoorvaschool'} kfrateewaOi,^Nizamabad -^503001'

¶74

¶75

R:ifi iff^{'sJt'\i#,Rilfl ::'.i,;t^:"3#$31-""11'3'3i3":?ffii;} A,iii#il;,^{t"cdbi. irnir"" G,iden, rotraguoam'Hvderabad'}

¶76

6 Sri. H. Ravi^{Raj. S/o. Gangaram, Aged about58 Years'Occ:Business' R/o'} Ei;t'r'r".'2.'rtli,Ii^{ia t r.l er, ru riag a r, B e-g u m pet'Hvde ra bad'}

¶77

7 Sri. Housewiie, N. Viiava^{Fvo. Lakshmi, H. No. 5-o-69;'i'"G;;;;bpp'Ap"oorva W/o' N Ashok Kumar' AOed airout 62 school' Years' Khaleelwadi'Occ:} Nizamabad -^503001.

¶78

B Sri.H.Narsaiah.S/o.LateH'Lalchaiah'Aged.about83Years'Occ: Blj;i""!i nv".'^{ii.ii6. 5-o-sr'or-26',si'"t*'iniNagar'N izamabad}

¶79

9 Sri. H' R/o. C/a Fenoplast Krishna^{Kumar, S/o. Narasaiah, Aged about Limited''i6oiSo8'Ctt;"oyTrade Centre' 63 Years, Parklane'occ: Business,} Secunderabad

¶80

---7 / //

¶81

Sri. H. Kishan, S/o. H. Latchaiah, Aged about 81 Years, Occ:^{Business, Rio.} C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre, Parklane, Secunderabad

¶82

Smt. H. Pushpa, W/o. Sri Kishan, Aged about 75 Years, Occ: House Wife, R/o. C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre, Parklane, Secunderabad

¶83

12.Sri. lt/ahesh Kumar, S/o. Sri Kishan, Aged about 51 Years,^{Occ: Business,} Rl/o. C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre,^Parklane, Secunderabad

¶84

'13. H. Saparna, W/o. Krishna Kumar, Aged about 51 Years, Occ: House Wife, Rl/o. C/o. Fenoplast Limited, 306/308, Chenoy Trade Centre, Parklane, Secunderabad

¶85

H. Anuradha, W/o. Late H. Dayakiran, Aged about 59 Years,^{Prof. Doctor,} Rl/o. Flat No. 402, Panorama Mansion, Renuka Enclave, Somaiiguda, Rajbhavan Road, Hyderabad.

¶86

15.H. Rahul, S/o. Late H. Dayakiran, Aged about 32 Years, Occ: Business,^Fyo. Flat No. 402, Panorama Mansion, Renuka Enclave, Somajiguda, Rajbhavan Road, Hyderabad.

¶87

H. Ruthu, D/o. Late H. Dayakiran, Aged about 32 Years, Occ:^{Business, Rl/o} Flat No. 402, Panorama Mansion, Renuka Enclave, Somajiguda, Rajbhavan Road, Hyderabad.

¶88

.,.RESPONDENTS

¶89

Petition under Section 151 CPC^praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be^pleased to vacate the order dated 2110112021 passed in W.P.No. 1251 OF 2021^.

¶90

Counsel for the Petitioner : SRl. VIVEK JAIN

¶91

Counsel forthe Respondent No.1 : SRl. DEEPAK BHATTACHARJEE SC APPEARING FOR SRI. DISHIT BHATTACHARJEE

¶92

Counsel for the Respondent Nos.13 to 15 : SRl. SUNIL B GANU Counsel for the Respondent No.16 : SRl. Y. SRINIVASA MURTHY The Court made the following : ORDER

¶93

¶94

10.Sri.H.Kishan,S/o.H.Latchaiah,Agedabout8l-Years'Occ:.Business'Fl/o''- c)6. i"."ptrti Limitud, 306/308, c6enoy Trade centre, Parklane' Secunderabad

¶95

1 1. Smt. H, Pushpa,^{W/o Sri Kishan, Aged about 75 Years' Occ:NouseWife'} ' nlo. C)". i"nbp]rst Limited, 306/306, Chenoy Trade Centre' Parklane' Secunderabad

¶96

12.Sri. Mahesh^{Kumar,S/o Sri Kishan, Aged about 51 Years'Occ: Business'} - R/;. Cr;. F"noplast Limited, aoolgob, dhenoy Trade Centre' Parklane' Secunderabad

¶97

1 3. H. Saparna,^{W/o. Krishna Kumar, Aged about 51 Years' Occ:Llouse Wife'} " nlo.dlo. funoptast LimiGd, :oolso5, Chenoy Trade Centre' Parklane' Secunderabad

¶98

14.H. Anuradha,^{W/o. Late H. Dayakiran, Agedabor'rt59 Years'ProfDoctor'} nlo. fiai rtro.'402,^{Panorami lilansion,RlenukaEnclave' Somajiguda'} Rajbhavan Road,^HYderabad.

¶99

15.H. Rahul, S/o.^{Late H. Dayakiran' Agedabo-ut32 Years'Occ:Business'Fl/o '} Flat No. 402, Panorama-Hiiniion,^{R"enukaEnclave' Somajiguda'Rajbhavan} Road, HYderabad.

¶100

16.H. Ruthu, D/o.^{Late H. Dayakiran,} {ged^{about 32 Years' Occ: Business' R/o'} Ftat No. 4O2,panorami^{rriiniion,R6nuka Enclave,Somajiguda, Rajbhavan} Road, HYderabad.

¶101

...RESPONDENTS

¶102

PetitionunderSectionl5lCPCprayingthatinthecircumstancesstated in the affidavit filed^{ln support of the petition,the High Court may be pleasedto} vacate the order^{dated2110112021passedin W P No 1291 OF 2021'}

¶103

Counsel for the^{Petitioner : SRl.VIVEK JAIN}

¶104

Counsel for the^{RespondentNo.1: SRI' DEEPAK BHATTACHARJEESC} an APPEARING^{FOR'- DISHITBHATTACHARJ EE}

¶105

Counsel for the Respondent^{Nos.13 to 15 : SRI' SUNILB GANU} Counsel for the Respondent^{No.16: SRl.Y' SRINIVASAMURTHY} The Court made^{the following : ORDER}

¶106

/',

¶107

THE^H ON^,BL E SRI JUS^TICEUJJAL B AN AND SUDHA STICE^P.S THEH^ON 'BLE^SMT w.P.N^{o. r29L} OF 2 02l

¶108

Sri Justice^{Ujjal BhuYan)} ffit" Heard^{Mr.Vivek Jain' learned counsel for the pe} titioner; Mr.^DeePak Bhattacharjee '^{learnedseniorcounselfor} resPondent No.l;^{Mr' Sunil B Ganu'learned counsel for} Nos.13^{to 15; and Mr' Y' Srinivasa Murthy'} resPondent learned^{counselfor respondentNo 16}

¶109

of the 2 By filing^{this petition under Article 226} that^the Constitutionoflndia,petitionerseeksadeclaration action^{of respondentNo' 1 in conductingthe e-auction on} 05.12.2020^{on the basis of the e-auctionsale notice dated} 20.lL'2017^{which had {ixed the auction date as 27 'L2'2O17} as^{ilie gal and unconstitutional and consequently to set aside} the^same.

¶110

¶111

.J Case^{of the Petitioneris that resPondentNo.2 is the} partnershiP^{{irm of which resPondentNos'3 to13 are the} Partners^{except resPondent No'6who is the iegai heir of late}

¶112

¶113

¶114

Smt. Rajubai^{who was one of the partners of the firm'} Likewise, respondent^{Nos.14 and15 are the legal heirs of late} Dayakiran who \tas^{also one of thepartnersofthe} partnership firm. Respondent^{No.2 had availedloan of Rs'30} lakhs from the hrst^respondent -^{CanaraBank,Nizamabad} branch on 13.11.1996^{for business purpose. Petitionerstood} as guarantor to the^{loan so availedof by respondent No'2} from respondent^{No'1. Subsequently,respondentNo'2} obtained further loans^{from the flrst respondent, detailsof} which have been furnished^{in paragraphNo.1 1 of the writ} affrdavit.

¶115

4 According to the^{petitioner,respondentNo'3 isthe} managing partner of^{the firm i.e. respondent No'2' He had} played fraud upon the other^{partners of the partnershipfirm} and had siphoned^{of the money of the partnership Iirm' As a} resuit, there was default^{in therepaymentofloan'} Consequently, the^{loan account of respondent No'2was} classified as non-performing^{asset (NPA) on25'O7'2017;}

¶116

¶117

whereafter respondent^{No' 1 issued demandnotice dated} 01.08.20^{17 calling uponrespondent Nos'2 to 13 to pay back} theoutstandingduesamountingtoRs'7'55'46'893-24to respondent No.1.

¶118

5 Respondent^{No.1 thereafter fiied applicationunder} SectionlgoftheRecoveryofDuesandBankruptcyAct,1993 (briefly, 'the 1993^{Act' hereinafter)beforethe DebtsRecovery} Tribunal-I, Hyderabad^{(Tribunai), which was registeredas} O.A.No. 17L^{of 2018. In the meanwhile, respondent Nos 13 to} 15 filed a suit^{for partitionarraying the petitionerand} respondent^{Nos.1 to 12 as defendants in O'S'No'26 of 2076} on the file^{of the DistrictJudge, Nizamabad'In the said suit'} an injunction^{petition was also {iled being I'A'No' 1401 of} 2016. In the^{said petition learned Court below granted an} interim injunction^{restraining the defendants from alienating} the suit schedule^{property which includes the properties} 'entioned^{in O.A.No.171 of 20 18'}

¶119

¶120

6 Petitioner^{has statedthat instead of auctioningall other} schedule^{properties,only the subject property was soughtto} beauctioned.Detailsofthesubjectpropertyareasunder:

¶121

"MP1.Nos.^{(7-10-939, 940' 941'} g4llt, g+2,^{g+s,944,945,946'947} ana' Z-tO-SSB/3),^{situatedat abutting} SO'-OO" wide^{Rashtrapathi Road' OPP:} District^{HeadquartersHosPital'} Nizamabad."

¶122

7 ResPondent^No'1 issued Possession^noticedated 24.1O.2O17^{and thereaftere-auction sale noticedated} 2(-.ll.2}l7^{fixing auctionsale of the schedulepropertyon} 27.12.2017.

¶123

¶124

8 At this^{stage, respondent Nos'13 to15 had filed} securitization^{applicationunder Section 17 ofthe} Securitisation^{and Reconstruction of Financial Assetsand} Enforcement^{of Security Interest Acl' 2OO2 (briefly referred to} hereinafterasthe.SARFAESIAct,)beforetheTribunaiwhich was registered^{as S'A'No 373 of 2Ol7 'Initialiy' Tribunal had} stayed al1^{furtherproceedingsincluding theauction} scheduled^{on 27} '12'2017^{'However' on contest'Tribunal}

¶125

)

¶126

¶127

dismissed^{S'A.No.373 of2017 vide theorder dated} 23.O4.2O1g^{observingthat respondentNos'14 and 15 being} the iegal heirs^{of the deceased partner did not have locus} standi to^{questionSARFAESI proceedings initiated by} respondent^No.1.

¶128

9 Against the^{above decision of the Tribunal' respondent} Nos.13 to^{15 approachedthis Court by filing W'P'No'13184 of} 2019. The^{said writ petition was dismissed by this Court vide} theorderdated0g.l0'2020.However,libertywasgrantedto the petitioners^{therein to approachthe appropriate forum} under Section^{18 of the SARFAESIAct'}

¶129

10 It is stated^{that in the meanwhile respondentNos' 13 to} trS filed an interlocutory^{application being I'A'No'2044of} 20i9 in O.A.No.171^{of 20 18 for appointment of a receiver to} take physical^{possession of the stock by enforcingthe} hypothecation^{agreement. However, the same was dismissed} \ by the Tribunai.^{Against such order of dismissal,respondent} Nos.13 to 15 again^{approachedthis Court byfiling}

¶130

¶131

But the^{same was dismissed on the} W.P.No.18039^{of 20 19'} ground of^{alternativeremedy'}

¶132

11 After^{dismissalof W'P'Nos'13184 of 2019 and 18039of} 2019, first^{respondent continuedwith the e-auction notice} dated 20.1L2017^{on 05'12'2020 without issuing further} notice^{of its intention to conductauction sale on O5'72'2O2O'} Respondent^{No.16 was the highest bidderwhosebid amount} was Rs.21,50,00,000-00'^{It is alleged that respondent No'16} is the wife^{of respondent No'3 RespondentNo' 16 deposited} 25okofthebidamountonO5.l2,2o2owhereaftersale confirmation^{ietter was issued on 05'12'2020' It appearsthat} respondent^{No. 16 thereafterpaid the balance bid amount;} whereafter^{respondentNo'l sold the property to respondent} No.16.^{Thereafter respondentNo' 1 had filed an interim} application^{beforethe Tribunal stating that arnount received} in the auction^{sale was in excessof the amountto be realized} as such^{respondent No'1 soughtdirection from the Tribunal}

¶133

)

¶134

¶135

to deposit the excess arnount equally in favour of al1 the coo&aners.

¶136

12 In the writ petition, petitioner has expressed the following grievances: -

¶137

a. The reserve price set for the auction sa.le was below the market va-lue of the schedule property,

¶138

b. Respondent No. 1 conducted auction without obtaining fresh valuation of the property and proceeded to conduct auction sa.le on O5.12.2020 on the basis of property valuation of the year 2017,

¶139

Respondent No.1 is hand in glove with respondent No.3, which would be evident from the fact that schedule property was sold to respondent No. 16 who is the wife of respondent No.3,

¶140

d. As per proviso to Rule 9 (1) of the Security Inteiest (Enforcement) Rules,20O2 (briefly, the SARFAESI Rules' hereinafter) if sale of immovable property by any one of the methods specified by subrule (5) of Rule 8 fail s and the sale is required to be conducted again, then notice of sale has to be given rvith l5 days time to the borrower/ guarantor for the subsequent sa.le. However, nc such notice was issued to the petitioner belore the auction sale.

¶141

13 Respondent No. 1 addressed letter dated 08.O1.202\ to

¶142

the petitioner seeking his consent to distribute the balance sale surplus amongst the owners of the property i.e.

¶143

¶144

respondent Nos.3, 7^{and the petitioner herein which is} Rs.9,12,00,000-00 after^{deductingthe dues of the bank' ln} his reply dated^{1 1.O1.2021 petitionerstated thathe is entitled} to 1/3.a of the entire^{sale proceeds and not just 1/3'a of the} balance surplus^sa-le Proceeds'

¶145

14 With the above^{grievancepetitioner has filed the present} writ petition seeking^{the relief as indicated above'}

¶146

15 This Court,^{by order dated' 21.01.2021,ditectedthatno} third party interest^{shouldbe createdover the subject} property.

¶147

¶148

16 Respondent^{No.1 has filed counteraffidavit as well as} stay vacating^{petition. The counter afhdavit has been filed} through Dr.A.S.Farida,^{Assistant General Managerof} respondent No. 1-Canara^{Bank. At the outset, a preliminary} objection has been^{raised as to maintainabilityof the writ} petition. It is contended that^{the petitionerdid not frle appeal} against the order^{dated23.04.2019 passedby the Tribunal in}

)

S.A.No.373 of 2Ol7 before the Debts Recovery Appellate Tribunal at Calcutta under Section 1B of the SARFAESI Act.

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L7 Respondent No.1 has thereafter given the background of 2"d respondent - how it was found and composition of the partnership firm changing from time to time. Respondent No. 1 thereafter has given details of loan facilities availed of by respondent No.2 and the securities offered, both primary and collatoral, for obtaining the loan facilities. Further, details of the guarantors have been provided including Sri H.Sanjay Kumar i.e. the petitioner.

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18 For default in repayment of the loan amount, the loan account was classified as NPA on 25.07.2O l7 on the basis ol the guidelines of respondent No.1 and Reserve Bank of India. Thereafter, demand notice was issued by respondent No.1 on 01.08.2017 under Section 13 (2) of the SARFAESI Act. Since there was no compliance, possession notice d.ated, 24.IO.2OlT was issued under Section 13 (a) of the SARFAESI Act. The \ possession notice was published on 30. lO.2Ol7 in two widely

Telangana,^{one in Telugu (M/s'} circulated^newsPaPersin one in^{Engiish (M/s' Telangana} Namaste^{Telangana)and} notice^{was also aifixed ata} Today)'^{The Possesslon} It consPicuous Place^{of thescheduie ProPertyon 24 1O'2017 '} may^{be mentioned that as per the demandnotice outstanding} dues^{was quantifiedat Rs'7'03'46 'L53-24 as on 01'08'2017'}

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19^{After takingover of symbolic possession of the schedule} property^{on24'1'O'2017' respondent No'1 was issued again a} notice^{under Rule 8 (6) and Rule 9 (1) of the SARFAESI Rules'} 2OO2 oo^{2l'll'2017 which was also publishedintwo} newspapers'^{The Hindu (English)and Eenadu(Telugu)'The} said^{noticewas also sent to the borrowerand the guarantor} under^{registered post' Auctionsalewas fixed on 27 '12'2017'}

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20 Insofar^{the civii suit is concerned' stand taken by} respondent^{No' 1 is that the family disputes wouldhave to be} themselves^' resolved^{by thefamilymembers amongst} nothing^{to do with it'} Nonetheiess, ResPondent^{No' 1 has} it has^filed was made^{a defendant'} since^{resPondentNo1}

written statement. It is further stated that application for injunction filed by the petitioner was dismissed by the civil Court.

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2l Adverting to the order dated 23.04.2019 passeci by the Tribunal in S.A.No.373 of 2017, it is contended that the rnortgaged properties were auctioned strictly loliowing the procedure laid down under the SARFAESI Act and the SARFAESI Rules. Al1 the mortgageci properties are selfacquired properties u,hich is evident from the titie deeds deposited with the first respondent. Tribunal in the order dated 23.04.20 19 had conhrmed that respondent No. l. had strictly followed the provisions ol the SARFAESI Act and therefore the auction was in order.

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22 According to respondent No. 1, after the order dated 23,04.2019 was passed by the Tribunal, respondent No.1 continued with the auction which rvas abruptly stalled on 1 27.12.2017 upon receipt of letter dated 27 .12.2017. In the auction proceedings respondent No.16 was declared as the

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successful^{bidder rvhichwas} accepted bY^{the system'} Auction^{purchaser had already paid earnest money depositon} 26.12.2017.^{ResPondent No 1has taken fresh valuationof} The auction^{u'as concluded on 05' l2'202O} the property. which was a continuation^{of the auction sale abruptly stailed} on 27.12.2017.^{The auction was so concluded on disposal of} W'P'No' 1318 4^{of 2Ol9and} S.A.No.373 of 2Ol7 , W.P.No.i8039^{of 2019 and I A'No'37 of 2018 in I'A'No'140 1} of 2016 in^{O.S.No'26of 20 16'}

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23 Denying^{al1 contentionsraised by the petitioner'} respondent^{No.1 has asserted that the propertyin question is} a self-acquired^{propertyas per the documents submittedwith} respondent No.1.^{Insofar O'A'No'171 of 2018 is concemed'} Tribunal, vide^{docket order dated l"Ol'2021' had disposed} of O.A.No.171^{of 20 18 as having been settled out of Court'} I.A.No.1401^{of 2016 in O'S'No'26ol 2016 was dismissedby} the Court of^{Principal DistrictJudge'Nizamabad' videorder} / dated 2T .ot.2o2o.

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24 Respondent No. t has obtained afresh two va.luation reports of the schedule property from two independent certified valuers dated 29.09.2O2O and 24.11.2O2O. Reserve price fixed by respondent No. I at Rs.2l.50 crores was much higher than the realizable value of the property as per the fresh va-luation reports obtained by respondent No. 1. It is stated that saie certificate was issued to respondent No.l6 on O2.Ol.2O2l and the same was registered n 1S.01.2021 following remittance of full amount by the auction purchaser. Physical possession of the schedule property was also handed over to the auction purchaser.

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25 in the auction sale, since surplus sale proceeds for amount of Rs.912 lakhs was received lor distribution, I.A.No. 1034 of 2O2O was liled before the Tribuna1 by respondent No.1. However, Tribunal took the view that as,the property was auctioned under the provisions of the SARFAESI Act, it would be appropriate for respondent No.1 to distribute the sale proceeds itself instead of seeking indulgence of the \

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Tribuna,l. Accordingly^{the application was closed' It was} thereafter respondent^{No. ihad addressed letter dated} 08.01.2021 to the^{mortgagers. Two of the mortgagersSri} H.Sampath Rao and Sri^{H. Narasaiahhad accepted the same} and given their consent^{for release of the balancesaie} proceeds and to their share^{from such sale proceeds'}

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26 Respondent^Nos.13 to^{15 have frled counteraffidavit} supporting the writ^{petition.It is stated that the schedule} property was sold at a throwaway^{price of Rs.21'50 crores to} respondent No. 16^{who is the wife of respondentNo'3 as} against the market^{price of Rs.3 i.49 crores' Detailsof the} partnership as well as^{the litigative history have been} narrated. It is aileged^{that there is gross violation of the} procedure laid down in Rules^{8 and 9 of the SARFAESI Rules,} which has vitiated the auction^{sale, besides respondentNo'1} has not followed the^{procedurelaid down underthe} SARFAESI^Act.

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27 Respondent No.16 in her counter^{affidavithas deniedall} the allegations made by the^{petitioner and respondentNos"13} to 15. It is stated that pursuant to the order^{of the Tribunal} dated 23.O4.2O19, respondent^No.1 had^{proceededwith the} auction of the schedule^property on 05.12.2020.^When advertisement was issued on 20.11.2017^{in the newspapers} proposing auction sale of the schedule property,^respondent No.16 placed her e-auction bid application^{oniine after} complying with the necessary formalities.^{Subsequently,} when a letter was received from one^{of the respondents,} authorized of{icer had put the auction on^{hold. Respondent} No.16 was informed that the auction would be^proceeded further once the hurdles reiating to auction were removed. Subsequently, respondent Bank continued the auction on 05.i2.2020. After being declared as the highest bidder, respondent No. 16 remitted Rs.5,37,75,000-00 on 05.12.2020 towards 25% of the bid amount i.e. Rs.21,50,00,000-00. Respondent No.1, vide letter dated 15.12.2O2O, informed

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respondent No. 16 that the sale had^{been confirmed in her} favour and she was also advised to remit^{the balance75ok i.e'} Rs.16,13,25,000-00 on or before 19.12.2020. This^{was also} paid by respondent No.16. Since respondent No. 16^{paid the} entire sale price, respondent No.1^{issuedsale certificatedated} O2.OL.2O2O to the petitioner which^{was also registered.It is} stated that since then respondent^{No.16 has been in physical} possession of the subject property.

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28 Learned counsel for the^petitioner has^{argued that} respondent No.1 ought to have issued fresh notice^{after the} auction was stopped on 27 ,12.2017 . It^{should have been a} fresh auction. It should have been^{preceded by followingthe} procedure prescribed under Rules 8 and 9 of the^SARFAESI Rules. Failure to do so has vitiated^the auction^{sale whichis} also suspected because the auction^{purchaser is none other} than wife of respondent No.3^who is the^{managing partner of} respondent No.2 firm, the^{borrower.Learnedcounselhas} also stressed upon^{the submissionthat when respondent}

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No. 1 proceeded with the auction sale in the year 2O2O it ought to have obtained fresh valuation report of the schedule property which was sold on the basis of the valuation report obtained in the year 20 17 . There was substantial price escalation between 2Ol7 and2O2O.

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29 Learned counsel for the petitioner has^placed reliance on the following decisions:-

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Mathew Varghese Vs. M. Amrith Kumarl, Sri Sai Annadata Polymers Vs, Canara Bank2 and Alpine Pharmaceuticals Private Limited Vs. Andhra Bank3'

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30 Learned counsel appearing for respondent^Nos.13 to¹⁵ has supported the stand taken by learned counsel for the petitioner.

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31 Learned counsei for respondent No.1, after referring to the averments made in the counter affidavit, submits that respondent No.l has scrupulously followed the procedure iaid

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\ (2ot4l s scc 6ro

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? 2018 SCC Orline Hyd 178

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3 2020 SCC OnLine TS 81

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down in the SARFAESI Act and the^{SARFAESI Ruleswhile} conducting auction of the schedule^{property.He submitsthat} following the sale notice dated 2l.ll.2ol7 the^{auction sale} was conducted oo 27 .12.2017 . While it was on the^{verge of} completion, suddenly a letter was^{received from one H.Rahul} on 27.12.2017 (respondent No.14) for which the^auction proceedings were abruptly stalled on 27.12.2017.^Finally, after the writ petitions were dismissed, after^{the civil Court} had rejected the injunction petition and after Tribunal^had passed the order dated 23.04.2019, respondent No. 1^resumed the auction proceedings on^{05. l2.2O2O} and^completedthe sarne. The delay in concluding the auction^{was purely} attributable to the petitioner and the other^contesting respondents. It was not delayed on account of^respondent No.1 or the auction purchaser. A1l throughout^full opportunity was granted to the borrower as well as^{to the} guarantors including the petitioner to^pay the^outstanding dues and to redeem the^{scheduleproperty. But that was not} done.

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32 Learned counsetr for the first respondent has^placec reliance on the following decisions:-

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Authorized Officer, State Bank of Travancore Vs. Mathew K.C,a, S.Karthik Vs. N. Subhash Chand Jains and Phoenix ARC Private Limited Vs. Vishwa Bharati Vidya Mandi16.

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33 Learned counsel for respondent No. 16 has supported the stand taken by learned counsel for respondent No. 1.

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34 Submissions made by learned counsel for the^parties have received the due consideration of the Court. The decisions cited at the bar have also been considered.

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35 Having heard learned counsel for the parties and having perused the pleadings as well as the materials on record, it may be necessary to place the relevant facts in proper

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4 (2O18) 3 SCC 85

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s 2O21SCC Onl,ine SC 7a? 6 2022 SCC Online SC 44

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have been^{narrated in avery} perspective since^those haphazard^manner'

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36 For^{default in} Payment^ofthe loan amount^bY loan account^of respondent^{No.2 torespondentNo'1'} respondent^{No.2 was classifiedas NPA on 25'07 '2017'This} u,as followed^{by notice dated 0i'08'2017 issued under} Section^{13 (2) of the SARFAESi Act interms of which} outstanding^{dues of respondent No 2u'as quantifiedat} Rs.7,03,46,153-24^{as on 01'08'20 17' Since the outstanding} dues were^{not paid back, respondent No' 1 issuedpossession} notice dated^{24.LO.2017 under Section 13 (4) ofthe} SARFAESI Act.^{Finally sale notice dated 21'11'2017was} issued under^{Rules 8 (6) and 9 (1) of the SARFAESI Rules} proposing to^{hold auction sale of the schedule properties} (subject property^{being theproperty atSl'No'II) on} 27.12.2017.

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37 Assailing^{such sale notice'respondentNos' 13 to 15 filed} Securitization^{ApplicationNo 373 ol 2Ol7 before the Tribunal'}

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Said respondents also filed an interlocutory application for stay which was numbered as I.A.No.2992 of 2017. By the docket order dated 26.12.2017 , Tribunal granted interim stay of all further proceedings including auction of the schedule property on 27.12.2017 pursuant to e-auction sa_le notice dated 20.lL2Ol7.

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38 According to respondent No,1, the auction had commenced on 27.12.2017 and was on the verge of conciusion when respondent No.14 produced a letter dated 27.12.2017 stating about stay order granted by the Tribunal. In view thereof, the ongoing auction on 27.12.2012 had to be abruptly stopped.

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39 We Iind that respondent Nos.13 to 15 had earlier instituted a suit for partition of the suit schedule property contending the same to be joint family property which is the same subject property being the property at Sl.No. 1 1 put to auction sale on 27.12.2017. The said suit being O.S.No.26 of 20 16 was instituted in the Court of the principal District

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Judge,^{Nizamabad ' whereinpetitioner and respondentNos'1} to^{12 were arrayed as defendants'Plaintiffs (respondent} Nos.13^{to 15) ftled an injunctionpetition whichwas registered} as^{l.A.No'140 | of 2016' By docket order dated 11'11'2016'} iearned^{Court below directedthe defendants not to alienate} the^{suit propertyti1l filing of counter in the I'A'} 40^{Reverting back toS'A'No'373 of2Ol7 frled by} respondent^{Nos' 13 to1 5 ' the sarnewas finally heardand} dismissed^{by the Tribunal vide the order dated 23'04'2019'} As^statedabove '^{the sale notice dealt with two schedule} properties^{and the presentpetition is concernedwiththe} property^{at Serial No'Il In paragraphNo 7 of the order dated} 23.O4'2llgTribunal^{recorded a finding that respondentbank} had^{strictly compliedwith all the provisions of the SARFAESI} Act^{with regard to Schedule II property; respondent bank} could^{establishthat scheduleI1 property was individual} property^{of respondent Nos'3' 8 and 12 and not part of HUF} property'^{As such it was heid that applicant Nos'2 and 3 i'e'}

(

respondent Nos.14 and 15 had no loans standi to question the SARFAESI measures of respondent No.1. However, Tribunai noted that because of the sta1, order passed by the Tribunal, the proposed auction on 27.12.2017 could not be held. Be that as it may, Tribunal held that applicants (respondent Nos. 13 to 15) haci failed to make out valicl grounds to set aside the SARFAESI measures initiated by the respondent bank against Schedule II property. Liberty was granted to the respondent bank clarifying that "respondent bank can proceed further^{againstSchedule II propertg dulg} following^{the norms".} In contrast to Schedule II property in respect of Schedule I property, the sale was set aside in view of non-issuance oi necessary notices to the 1ega1 heirs of the borrower. F{owever" respondent bank l'as granted iiberty to initiate fresh SARFAESI measures against Schedule I property duly foliowing the norms

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4l Against the order dated 23.04.2019 passed by the Tribuna.l dismissing S.A.No.373 of 2017 in respect of

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Scheduie^{ilproperty'respondentNos'13 to 15 filed a writ} petition^{before this Court beingW'P No'i318 4 ol2019'} However,^{by order dated 09'10'2020'this Court dismissed} the^{writ petitionholdingthat writ petitioners(respondent} Nos '^{13 to 15) had alternative remedy of filing appeal under} Section^{18 of the SARFAESi Act' which they did not avail and} that^{no extraordinary circumstanceswere broughtto the} notice^{of the Court to entertarn the writ petition'}

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42^{In the year 2018'respondent No'1 had filed original} application^{under the 1993 Act before the Tribunal under} Section^{19 of the 1993 Act for recovery of the outstanding} dues^{from the borrower and guarantor (petitioner) being} O.A.No'171^{of 20l8Respondent Nos 13 to15 filed an} interlocutory^{application before theTribunal being} I'A.No'2044^{ol2Olgseeking a directionfrom the Tribunalfor} t:X: 1:

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appoinfinent^o' ''^{t"""*"t to take} :Tt':':" hypothecated^{movable assetslying rn} respondent^{No'2 and after selling ttre same to depositthe sale}

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€ t,

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proceeds to the credit of O.A.No.17l of 2018. This was contested by respondent No. 1 . After hearing the matter, Tribunal passed docket order dated 06.08.2019. Tribunai held that to enforce any security it is the prerogative of the secured creditor as to which security may fetch maximum proceeds to satisfy the debt. Observing that filing of the I.A. was nothing but an exercise to somehow drag on the proceedings, Tribunal declined to entertain the application. Hence the I.A.No.2044 of 2019 rvas dismissed as being devoiC of anv merit.

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43 This order dated 06.08.2019 was challenged by respondent Nos. 13 to 1 5 before this Court by fiiing W.P.No.18039 of 2019. By order dated 09.10.2020, this Court dismissed the writ petition on merits holding that there was no infirmity or error in the order passed by the Tribuna-l and that there was no reason to intervene under Article 226 of the Constitution of India.

44 Reverting^{to the civil suit instituted by respondent} Nos.13 to^{15, learned PrincipalDistrict Judge'Nizamabad'} dismissed all^{interlocutory applications includinginjunction} petitions,^{vide order dated 27 0l'2020' It may be mentioned} that respondent^{Nos'i3to 15 had filed I'A'No'37 of 2018 in} I.A.No.140^{I of 2OL6 in O'S'No'26 of 2Ql6 for a directionto} the defendants^{to deposit an amount of Rs'2'47 '05'890-00 to} the credit^{of the suit before the civil Court' Learned Court} observed^{that I.A'No'1401of 2016 was filed for ad-interim} injunction;^{I.A'No.38 of 2018 was hledtopunish the} order^dated defendants^{forallegeddisobedienceto} 11.11.2016;^{and I.A.No' 1757 of 2018was frled by one Haridas} the defendants^from Raviraj^{(respondent No 5) to restrain} it ri.,as noted^{that an} alienating^{the suit schedule property'} ad-intenminjunction^{rT'as passedon 1 1 ' 1l '2016 directing the} defendants^{not to alienate the suit schedulepropertybut the} same was^{only till frling of counter in I'A'No' 140 iof 2016'} The property^{was sold in public auction as respondentNo'1}

td l

did not receive copy of the order dated 11.11.20i6 tili 27.72.20t7. Learned Court below recorded that the subject property was auction sold by respondent No. 1 after duiv complying with the provisions of the SARFAESI Act" There was no willful violation of the ad-intenrn injunction orcier dated i I . 1 I .20 16. That apart, as the plaintiffs (respondent Nos. 13 to 15) had already invoked the jurisdiction of the Tribunal under the SARFAESI Act it was held that civil Court had no jurisdiction. Therelore, ail the interiocutory applications were dismissed.

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45 After all the decks were cleared with dismissal of the securitization application, rejection of the interlocr,rtory application in O.A.No. 171 of 20 18, dismissal of injunction petition and other I.As by the civil Court, and finally after dismissal of the two writ petitions by this Court, there was no /impediment to respondent No. 1 to resume/continue the auction sale on OS.\2.2O2O which was abruptly stayed on 27.12.2017.

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46 At this^{stage, we may briefly analyze thefinal} conclusions of the^{Tribuna-l while dismissing S'A'No'373of} 2077,videorderdated23.O4'2Otg'Wehavealreadynoticed that there^{were two properties} -^{Schedule1 and Schedule II} covered by^{the sale notice dated 21' ll'2017'} For not following the^{procedure, the auction sale inrespect of} Schedule I^{propertywas set aside But in respect of Schedule} II property,^{the conclusionreached by the Tribunal is that} respondent^{No.1bank had strictlycomplied with all the} SARFAESI Act^{and that respondentNo'1} provisions of^the could establish that Schedule^{IIproperty was individual} property and not^{joint family property' Therefore'the} challenge made^{to auction sale of Schedule II propertywas} rejected.^{While rejecting such challenge,Tribunalnoted that} in view of the^{stay order passed by the Tribunal earlier} (26.12.2077\ the auction^{on 27'12'2017could not be held'} Since challenge^{was rejected,liberty \vas} granted to respondent^{No.1 toproceed furtl-teragainst} Schedule^1l

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property following the norms. In respect of Schedule I property, respondent bank was given liberty to initiate lresh SARFAESI measures duly following rhe norms. paragraph Nos.8 and 9 of the Tribunal's order dated 23.04.2019 is quite instructive and those are extracted hereunder:

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"8. In view of the Stay Orders issued by the Tribunal, the proposed auction on 27.12.2O17 could not be held. From the above discussion, facts and circumstances of the case, i hold that the applican ts failed to make valid grounds to set aside SARFAESI measures iniriated by the respondent bank againsr Schedule (2) property. The respondent bank can proceed further against Schedule (2) property duly following the norms.

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Further, the SARFAESI measures against the Schedule (1) property are set aside in view of non-issualce of necessary notices to the legal heirs of Late H.Daya Kiran. However, the respondent bank is at liberty to iniliate fresh SARFAESI measures against Schedule (l) property duly following the norms."

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47 While in the case of Schedule II property, it was stated that respondent bank could proce ed further, however, in respect of Schedule I property, respondent No.1 was given iiberty to initiate fresh SARFAESI measures. The distinction is subtle but significant.

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48 When the stay order was passed by the Tribunal on 26.12.2O17, it meant that the auction proceedings proposed

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oo 27.12.2017^{was to be kept in abeyance'Fromthe} pleadings it transpires^{that auctionsale had commencedon} 27.72.2017 and^{when itwas at the verge of conclusion'} respondent^No' 14^{produced aletter dated 27 '12'2077} informing about^{the stay grarted by the Tribunal;whereafter} the auction was^{abruptlystoppedon 27} '12'2017^{'After the} challenge to the^{auction sale was rejected and libertywas} granted by the Tribunal^{to respondent No' 1 to proceed} further,^{it wouldmean that the stay having been removed'the} auction which^{was kept in abeyancecame back to life and} had to be^{proceededfrom the stage where it was stopped'} WhentheTribunalhadusedtheword"furthef'afterliftingof the stay, it can^{only mean that respondentNo' 1 should} proceed with the auction^{sale from the stage when it was} stayed by the^Tribunal.

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49 In view of^{the glaring facts whichare staringat the face'} taking any other^{view would not be justified' That apart'the} orderofthecivi]Courthasnotbeenchallengedbeforethe

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C
V

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higher forum; on the other hand, challenge made to the orders of the Tribunal by way of writ petitions were dismissed by this Court.

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50 At this stage we may also mention that petitioner did not avail the alternative remedy provided under Section 17 of the SARFAESI Act against the measures taken by respondent No. 1 under the SARFAESI Act. He neither iiied any securitization application on his own nor did he intervene in the securitization application filed by respondent Nos. 13 to 15. Therefore, both on the point of alternative remedy as weli as on merit, Court is of the view that petitioner is not entitled to any relief from the writ Court.

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5 1 After the auction sale was concluded on 05. l2,2O2O , respondent No. 16 emerged as rhe successful bidder, whereafter she had paid the entire bid amount of Rs.21,50,00,000-00. Thereafter sale certillcate was issued to her by respondent No.l on 02.01.2021 which was also registered. Since then respondent No.16 is in physical

) )

possession of the sub.iect property. That^{being the position} and considering all^{aspects ol the matter, any interference} with the auction sale now would not^{only reverse the clock} back but would unsettle the things^{which have since been} settled. As was lucidty expressed by^{the Supreme Court,} though in a somewhat different^{context, a scrambledegg} cannot be unscrambled.

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52 In view of what we have discussed^{above, obtainingof} subsequent valuation report was^{notnecessary though} respondent No.1 has asserted that^{it hadobtained} subsequent valuation reports only to satisfy^{itseif that the} sale price was more or less commensurate^{with the market} value of the subject property. The fact that^{the auction} purchaser turned out to be wife ol respondent No.3^{would not} be a ground to interfere u,ith the^{auctionsale unless and untii} the materials on record overwhelmingly^{pointstowardsany} foul play which we are unable^{to discernfrom the facts and} circumstances of the^presentcase.

53 Before parting with the record, we may briefly analyse the case laws cited at the bar. Mathew Varghese ( I supra) was a case where a two Judge bench of the Supreme Court had interpreted provisions of Section 13 (8) of the SARFAESI Act read with Rules 8 and 9 of the SARFAESI Rules. However, the above case does not say or iay down the proposition that for any violation of the procedure laid down under Rules 8 and 9 of the SARFAESI Rules a borrower or guarantor can directly approach the High Court under Article 226 ol the Constitution of India bypassing the statutorv alternative remedy available under Section 1Z of the SARFAESI Act.

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54 In Srl Sai Annadata polymers (2 supra) a two Judge bench of the Supreme court in the facts or that case held that the second sare notice was in continuation of the first sale notice since the sale scheduled pursuant to the first sale notice could not be held on account of reasons soiely attributable to rhe guarantors. After holding that the right of

redemption stands^{extinguished on the sale certificategetting} registered, Supreme Court^{highlightedthe purpose for which} the SARFAESI Act^{was enacted.}

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55 A two Judge bench^{ol the Supreme Court in Authorized} Oflicer, State Bank of^{Travancore Vs. Mathew K.C (4} supra) referred to the statement^{of object and reasonsof the} SARFAESI Act and^{various decisions as to maintainabiiity of} writ petition uis a uis alternative^{remedyunderSection17 of} the SARFAESI Act. It^{was held that in view of the availability} of statutory alternative^{remedyunder Section 17 ofthe} SARFAESI Act before the^{Tribunaland under Section18} before the Appellate Tribunal,^{a writ petition ought not to be} entertained. It is a matter^{of seriousconcern that despite} repeated pronouncements ol the^{SupremeCourt some of the} High Courts continue to ignore^{availabilityofstatutory} remedy under the^{SARFAESI Act and exercisejurisdiction} under Articl e 226^{of the Constitut'ion of India for passing} orderswhichhaveseriousadverseimpactontherightof

banks and other linancial institutions to recover their dues" Remedy under Section 17 of the SARFAESI Act is an efficacious remedy and question of fiiing writ petition directly under Article 226 of the Constitution of India does not arise.

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56 In Alpine Pharmaceuticals Private Limited (3 supra) though the Supreme Court u,as Concerned with filing of writ petition against private financial institutions / banks for actions under the SARFAESI Act, nonetheless, it has been held that if proceedings are initiated under the SARFAESI Act and the borrower is aggrieved by such action he has to avail the remedy under the SARFAESI Act and no writ petition would 1ie or would be maintainabie. In the facts of that case, Supreme Court opined that filing of writ petition by the borrower before the High Court under Articl e 226 ol the Constitution of India is an abuse of the process of the Court.

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57 Thus, taking an overall view and considering ail aspects of the matter, we are of the unhesitant view that the wrlt

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petition has to^{fail not only on the point of alternativeremedy} but on merit^{as well in view of what we have discussedabove'}

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58 Consequently,^{writ petition is dismissedwith costs of} Rs.10,000-00^{(RupeesTen Thousand only) to be paid by the} petitioner to the^{Telangana State Legal Services Authority at} Hyderabad^{within a period of 30 days lrom today}

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SD/.T.KRISHNA KUMAR ASSISTANT REGISTRAR ,TRUE COPY// 6b

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SECTION OFFICER

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To,

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2 One CC to SRl. VIVEK JAIN,^Advocate. [OPUC] J One CC to SRl. DISHIT BHATTACHARJEE,^Advocate. [OPUC] 4 One CC to Sri. SUNIL B GANU,^Advocate. [OPUC] tr One CC to Sri. Y. SRINIVASA^{MURTHY'Advocate.} [OPUC] b Two CD Copies 7 One Spare Copy TR A\r

F-l

HIGH COURT

DATED:27 10412022

ORDER

WP.No.1291 of 2021