Decided on February 06,2014



Raniit Singh, J. - (1.) THROUGH its order dated 16.3.2012, the Presiding Officer, DRT -I, Delhi has permitted the respondent No. 1 bank to participate in the court auction which was to be held on the same date, i.e., 16.3.2012. While granting this permission, the Tribunal imposed a condition that no bid for less than Rs. 14.75 crore would be accepted as this was the amount accepted by the appellant in sale way of private treaty. The order dated 16.3.2012 is impugned in the present appeal.
(2.) THE facts in brief are that O.A. filed by respondent bank was earlier dismissed, which was challenged by the bank before this Tribunal and the said appeal was allowed on 12.7.2010. The order passed by the Tribunal below was set aside. When this appeal was filed a writ petition filed by the appellant challenging the order passed by this Tribunal allowing the appeal of the respondent Bank was statedly pending before Delhi High Court. During the pendency of these proceedings, the Tribunal had issued a recovery certificate on 5.8.2010 against the appellant and Certificate Debtors (COs.). The Recovery Officer (R.O.) thereafter issued sale proclamation on 14.3.2011 and the property was put to auction on 6.5.2011. Court Receiver took possession of the property, namely, property No. 6, Benarsi Dass Estate, Timarpur, Delhi on 18.4.2011. Plea is that this was done without any notice to the COs or the appellant who states to be residing at Chicago, USA. The sale by way of auction fixed on 6.5.2011 was at a reserve price of Rs. 14.19 crores, which was fixed on the basis of a valuation report dated 17.2.2011. As per the appellant none came forward to purchase the said property. Claiming that the appellant had already deposited a sum of Rs. 47.94 lacs along with a proposal for settlement, which was made in March 2010, the appellant requested the bank to get proper valuation of the property done. Beside the appellant sought permission to bring a better buyer. The RO., then directed the Cos and appellant to file affidavit of assets and other details without placing emphasis on the sale of the mortgaged property. He issued show -cause notice for arrest of the appellant/COs. The appellant approached the respondent bank through his letter date 11.10.2011 with a One -Time Settlement (OTS) offer of Rs. 14.75 crores. The appellant had proposed to sell the property by way of private treaty. Appellant claims that an application under rule 66 read with rule 68A of the Second Schedule to the Income Tax Act, 1961, and section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act) was filed before the RO. for passing appropriate directions. In response to notice, the bank filed reply raising no objection if RO. allowed COs to sell the mortgaged property by way of private treaty for Rs. 14.75 crores. The bank, however, pointed out that there was no settlement proposal given by the COs, which, according to the appellant, was a misrepresentation. R.O. thereafter felt the need for fresh auction for exploring the possibility of fetching market price so as to satisfy the recovery certificate to a large extent. Bank had filed an affidavit stating that the property may be put to auction at the reserve price of Rs. 14.19 crores. R.O. accordingly issued sale proclamation fixing reserve price of Rs. 14.19 crores. The grievance is that the B.O. did not require the bank to file fresh valuation report before putting the property to fresh sale. Grievance further is that the R.O. completely ignored the fact that the appellant had offered a sum of Rs. 14.75 crores by way of compromise by arranging the sale of property by way of private treaty. The appellant claimed that the worth of the property was more than Rs. 25 crores. Feeling aggrieved against the order passed by the R.O., the appellant preferred an appeal before the DRT and prayed that the property may not be put to public auction without disposing of the pending compromise proposal dated 11.10.2011. DRT, vide its order dated 1.3.2012, allowed the auction to go on with modification to the extent that the appellant may deposit 25% of the offered amount of Rs. 14.75 crores with the Tribunal by 15.3.2012. The Court Auctioneer then was to continue with the public auction on 16.3.212 with enhanced reserve price of Rs. 14.75 crores. It was further directed that the intending purchaser may participate in the public auction. It is at this stage that the bank sought permission to participate in the said public auction as bidder. Appellant terms this action as 'U -turn' on the part of the bank. As per the appellant, respondent bank acted illegally by hatching a conspiracy and by fixing reserve price at Rs. 14.19 crores on the basis of old valuation report. It is, however, seen that the application filed by the 'bank seeking permission to bid for the property was dismissed by the R.O. The bank preferred an appeal against this order. Through impugned order, the Tribunal has allowed the bank to participate in the auction, which was to be held on 16.3.2012. Against this order, the appellant has filed the present appeal.
(3.) ON the day, this appeal came up for first hearing, it was disclosed that the highest bid' of Rs. 15 crores was received, which was accepted by the RO. and the sale had been confirmed in favour of the highest bidder. The counsel for the appellant also informed the Tribunal that the auction purchaser had deposited the entire sale consideration. He, however, was not clear whether or not the sale certificate had been issued or if the possession of the property was also delivered to the auction purchaser or not. This Tribunal was of the view that under such circumstances the auction purchaser was a necessary party. Time was given to the counsel to implead the auction purchaser. This application was allowed on 11.6.2012. Notice was then issued to the bank and newly added respondent. Subsequently, it was revealed before the Tribunal that the sale was also confirmed on 2.5.2012, which fact the appellant had allegedly suppressed as the appeal came up for first hearing on 7.5.2012.;

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