PRAVIN DATTATRAY PATIL Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The respondent bank, as secured creditor, put up a secured asset for e-auction vide notice dated November 20, 2019. The secured asset put up for sale was described in such notice as "all that part and parcel of the property consisting of Office No. 39, and measuring carpet area 567 sq. ft. on the 3rd floor of the Building known as 'Maker Tower', situated at Maker Tower "F" Premises Cooperative Society Limited, S. Vaswani Marg, 85 Cuffe Parade, Colaba, Mumbai-400005 in the name of United News of India" (hereafter "the said property", for short). It was to be sold on "AS IS WHERE IS, AS IS WHAT IS AND WHATEVER THERE IS BASIS". Insofar as details of encumbrances known to the secured creditor is concerned, the notice recorded that the "Property is free from encumbrances". Rs.1,54,66,277.00 was the secured debt for recovery of which the said property was put up to auction. The public e-auction was proposed to be held on December 20, 2019 between 11.00 hours and 13.00 hours. Interested bidders were informed of remitting by RTGS/NEFT/Demand Draft Rs.14,00,000.00 as Earnest Money Deposit (hereafter "EMD", for short), being 10% of the reserve price, by December 18, 2019. The notice further required the successful bidder to deposit 25% of the sale price, after adjusting EMD already paid, immediately, i.e., on the same day or not later than the next working day, as the case may be, after acceptance of the bid by the Authorized Officer failing which the EMD would stand forfeited. The balance 75% of the sale price was payable on or before the 15 day of confirmation of sale of the secured asset. Clause 13(p) of the notice required the successful bidder to "bear all the necessary expenses like applicable stamp duties/additional stamp duty/transfer charges, Registration expenses, fees etc. for transfer of the property in his/her name".

(2.) The petitioner, being interested to participate in the e-auction, remitted Rs.14,00,000.00 towards EMD on December 18, 2021. He also remitted Rs.21,05,000.00 on December 21, 2021, which together with EMD of Rs.14,00,000.00 constituted 25% of the sale price as offered by him, i.e., Rs.1,40,20,000.00. Upon e-auction, the petitioner emerged as successful and by a letter dated December 21, 2021, being the "Sale Confirmation Advise", the Authorized Officer of the respondent bank advised the petitioner to remit the balance amount of Rs.1,05,15,000.00 on or before the 15 day of confirmation of sale transfer of the said property in his favour. The petitioner was duly cautioned of forfeiture of the amounts paid in case of default of payment of the balance amount. The petitioner having prayed for extension of time to put in the balance amount, he was granted time till March 3, 2020 in terms of provisions of the Security Interest (Enforcement) Rules, 2002 (hereafter "the Rules", for short) failing which the bid amount would be liable to forfeiture and his bid rejected.

(3.) It is claimed in the writ petition that while arranging for funds to pay the balance amount, the petitioner came to know that the said property was situated on Government land and that it was incumbent upon the respondent bank to obtain 'No Objection Certificate' (hereafter "NOC", for short) from the District Collector (hereafter "the Collector", for short) by paying appropriate premium prior to proceeding with the sale by auction; however, no such NOC had been obtained by the respondent bank. Shocked by derivation of such knowledge after having put in 25% of the sale price offered by him, the petitioner by an e-mail dated January 19, 2020 called upon the respondent bank to obtain NOC from the Collector, to enable him complete all formalities including putting in the balance amount by the due date.