A.I.P. ROLLING MILLS PVT. LTD. Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) THE instant appeal has been directed against the judgment and order dated 29.10.2010 passed by the Presiding Officer of DRT -II, Chandigarh in S.A. No. 228/2010, M/s. A.I.P. Rolling Mills Pvt. Ltd. v. Authorized Officer, State Bank of India & Anr., whereby the S.A. has been dismissed and the amount deposited by the applicant/appellant has been forfeited. A resume of the factual matrix of the case is that one AMCO Fabrics Pvt. Ltd. had availed certain credit facilities from the respondent Bank and to secure the repayment thereof mortgaged the property, i.e., factory, land and building situated at Plot No. B -156, measuring 2500 sq. yds., Phase IV -A, Focal Point Dhandari Kalan, Ludhiana, Punjab. As the borrower company failed to repay the loan, the respondent Bank took measures for the enforcement of its security interest under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act) by sate of the aforesaid mortgaged property. The respondent Bank, after issuing demand notice under Section 13(2) of the Act, took possession of the property in question and issued notice on 16.5.2010 for the sale thereof at the reserve price of Rs. 2.43 crores. through auction to be conducted on 18.6.2010. As per the terms of the sale notice, the sealed bids were to be submitted at the SARC. Civil Lines, Ludhiana branch of the Bank by 12 noon on 18.6.2010. which were to be opened at 12.30 p.m. on the same day and the intending buyer was to submit his bid along with a demand draft of 10% of the reserve price and the highest/successful bidder was to deposit 25% of his bid amount within 24 hours. Since a lone bid of Rs. 2.44 crores of M/s. Knit Well Fashions, respondent No. 3, was received, it was declared the successful bidder and 25% of the bid amount was deposited by it within the stipulated time.

(2.) ON 22.6.2010, the appellant, without impleading the highest bidder, filed an S.A. before the DRT -II, Chandigarh for setting aside the auction sale as well as for restraining the Bank from confirming the sale with the allegations that on getting the knowledge of the sale of the property in question through publication in the newspaper, it had approached the Bank at SARC, Civil Lines, Ludhiana branch and obtained information with regard to the property, that on being fully satisfied it had decided to participate in the sale proceedings of the property and after getting a draft of Rs. 24.30 crores prepared in favour of the Bank, approached its Authorized Officer at 11 a.m. along with the said DD, but the said officer informed that the property had been withdrawn from the auction due to some stay and directions of the High Court of Punjab and Haryana and did not give any tender documents, that the applicant, however, waited at the premises of the Bank till 1 p.m., and on being satisfied that no auction had been conducted, left the premises at about 1.15 -1.30 p.m. but at about 4 p.m. on that very day it came to know that the auction proceedings were conducted and a single bid of Rs. 2.44 crores of M/s. Knit Well Fashions was received and the said bidder had been declared the successful bidder, that the applicant was intending to purchase the said property for Rs. 2.70 crores but the Bank in a clandestine manner did not permit it to participate in the bid process and then at 7.30 p.m. it had sent a letter to the DGM of the Bank at Chandigarh mentioning the aforesaid circumstances and submitting its offer/bid for 3 sum of Rs. 2.70 crores, enclosed the copy of the said DD.

(3.) IN the meanwhile, the mother of the borrowers of the loan approached the Punjab and Haryana High Court by way of writ petition (CWP No. 11019/2010 Smt. Sunderjit Kaur v. State Bank of India & Ors., inter alia, praying for the acceptance of the proposal for one -time -settlement and for quashing the sale notice dated 16.5.2010 and the Hon'ble High Court, while issuing notice on the motion, vide order dated 1.7.2010, directed the parties to maintain the status quo with regard to the property.