2016) 2 LawHerald 1052
PUNJAB AND HARYANA HIGH COURT
- RAJ SINGH AND OTHERS — Appellant
STATE BANK OF INDIA — Respondent
( Before : S.J. Vazifdar, Acting C.J.; Arun Palli, J. )
CWP. 5625 of 2016
Decided on : 22-03-2016
- Constitution of India, 1950 — Article 226
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) — Section 17
Securitization & Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, S.17–Auction Sale-Highest bid was marginally above the
reserve price—Borrower offered to pay said amount in three installments through
a relative-Tribunal directed to record the undertaking to establish bonafides of
petitioners—Sale to be stayed till application for interim relief is decided by
tribunal. (Para 6)
Final Result : Disposed off
S.J. Vazifdar, Acting CJ.(Oral) – The petitioners have challenged the order of the Debts Recovery Tribunal dated 14.03.2016 passed in the appeal filed by them under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
- The property is a residential house of petitioners No. 1 and 2. The sole bidder bid an amount of Rs. 2.65 crores which is marginally above the reserve price. The petitioners had also offered to pay the said amount, but in instalments of Rs. 50 lacs, Rs. 1 crore and Rs. 1.15 crores on 14.04.2016, 14.05.2016 and 14.06.2016, respectively. The Debts Recovery Tribunal has expressed doubts about the petitioners’ ability to raise funds. The petitioners state that the funds were to be raised through a relative of petitioners No.1 and 2. Mr. Jagga states that the Debts Recovery Tribunal ought to have given the petitioners an opportunity of proving their ability to raise the funds from the relative.
- The petitioners’ application to pay the said amounts appears to be reasonable. At the highest, some amount(s) could have been provided for interest on the instalments. However, the order seems to suggest that the Debts Recovery Tribunal was not satisfied about the sale itself. In the concluding paragraphs of the order, the Debts Recovery Tribunal has observed that the property was under-valued to the extent of about fifty per cent.
- The question(s) of valuation and the terms on which the instalments ought to be accepted, if at all, can always be considered by the Debts Recovery Appellate Tribunal. It is not necessary for us at this stage to interfere in such a matter. However, in view of the undertakings furnished by the petitioners, we are inclined to grant the petitioners time to file an appeal before the Debts Recovery Appellate Tribunal and seek appropriate orders – interim and final.
- In these circumstances, the petition is disposed of by granting the petitioners liberty to file the appeal before the Debts Recovery Appellate Tribunal.
- The petitioners’ undertaking to pay the amounts of Rs. 50 lacs, Rs. 1 crore and Rs. 1.15 crores on or before 14.04.2016, 14.05.2016 and 14.06.2016 through a relative or otherwise is accepted. This, however, does not compel the Debts Recovery Appellate Tribunal to accept the offer. It is only an undertaking recorded to establish the bonafides of the petitioners and to ensure that there is no loss to the bank in the event of the property being re-sold. The petitioners undertake to have the property purchased through any other party irrespective of any other facts and circumstances at a minimum consideration of Rs. 2.65 crores.
- In view thereof, the sale shall not be confirmed till the application for interim reliefs, if filed within two weeks from today, is heard by the Debts Recovery Appellate Tribunal. The Debts Recovery Appellate Tribunal shall decide the matter uninfluenced by this order.
- A copy of this order be furnished to learned counsel for the petitioners under signatures of the Bench Secretary.