Decided on June 30,2014

Sushil Jaiswal Appellant


Ranjit Singh, J. (Chairperson) - (1.) VIDE order dated 31.1.2014, DRT, Lucknow has dismissed the S.A. filed by the appellant. The appellant had filed the S.A. praying for setting aside of the auction sale notice dated 21.6.2010, which was published in newspaper. As per the appellant, the Bank had illegally and arbitrarily sold the property to the buyer through private treaty. Further allegation was that the Bank had failed to follow the mandatory provisions of Rules 8(5), 8(6) and 8(7) of the Security Interest (Enforcement) Rules, 2002. In response to the notice issued to the respondent Bank, it was pointed out that the appellant had failed to liquidate the dues of the Bank and the account was declared NPA. As per the Bank, notice under Section 13(2) of the SARFAESI Act was issued on 18.2.2010 followed by notice under Section 13(4) on 29.4.2010. In this manner the property was put to auction vide sale notice dated 21.6.2010 and the appellant had filed the S.A. on 19.7.2010. During the pendency of the S.A., the appellant was required to deposit amount equivalent to 4 EMIs by 27.7.2010 and the balance amount within one week. The Bank was permitted to receive tenders for keeping them in safe custody and it was restrained from opening the tenders if the appellant had complied with the direction made by the Tribunal, as mentioned above. The appellant could not comply with the orders of the Tribunal. He, however, sought extension of time, which was granted, but, still, he did not comply with the order during the extended period as well. The property was then sold on 16.3.2011. Sale certificate was issued in favour of the purchaser. After adjusting the dues, a letter was sent to the appellant to collect the residual amount of Rs. 61,852/ -. As per the Bank, the appellant did not challenge the sale before the Tribunal below. In the meantime, third -party interest was also created. The Tribunal, ultimately, dismissed the S.A. after noticing that the main relief sought in the S.A. was to set aside the notice under the SARFAESI Act and to set aside the auction which was scheduled to be held on 26.7.2010. The appellant never took any action to impugn the subsequent sale. The Tribunal, accordingly, was of the view that the relief which was not claimed in the S.A. cannot be allowed.
(2.) DURING the course of hearing, it was put to the Counsel if he could get relief in regard to the sale in the background of challenge raised in the S.A. The Counsel then invited my attention to an order passed by the Tribunal on 3.1.2014 where it is recorded that, "Since the applicant has already challenged the Sale Notice in the present S.A. which was become infructuous as no bid was received, thereafter he challenged the subsequent Sale Notices. Therefore, I find no amendment application is required for the sale. Hence, the amendment application is hereby rejected. The additional affidavit challenging the Sale Notice and the application for set aside the auction is already on record". No doubt, the Tribunal had earlier passed this order, but to succeed it was incumbent for the appellant to claim relief against the subsequent development or a cause as well. Only challenge to the sale notice was raised in S.A. but subsequently the property stood sold. The Counsel could not seriously rebut the position that he was required to challenge the sale but had not done so. The sale notice may have been challenged, but if subsequent to the sale notice the sale had taken place, that was also required to be impugned to succeed. In the absence of challenge to the sale, the Tribunal was justified in not granting the relief for setting aside the sate as such. It was for the appellant to draw the attention of the tribunal below to the order dated 3.1.2014 to press his plea if he could legally do so to challenge the sale. The appellant had a remedy to approach the tribunal below on this count which the appellant has not done. The appellant could have had his remedy when his prayer for amendment of S.A. was rejected. It was for the appellant to see if he could legally challenge the sale separately. Since, the challenge was made to sale notice in the SA and not to the sale, no relief regarding sale can be allowed to the appellant. The appeal is dismissed in limine.;

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