Hon'ble Sudhir Agarwal, J.

1. Heard Sri Rohan Gupta, learned counsel for petitioners and Sri Vikram D. Chauhan, learned counsel appearing for respondents.

2. The only question up for consideration in the case in hand is whether an auction purchaser is supposed to pay 75 per cent of the balance amount within the period of 15 days from the date of auction as provided in the auction notice or he can take advantage of Rule 9(4) Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as “Rules, 2002”) and claim that this 15 days period will commence after the sale is confirmed and not otherwise. The interpretation, in effect, of Rule 9(4) of Rules, 2002 has attracted attention of this Court.

3. The brief facts to appreciate the legal issues would be necessary and are stated as under.

4. The dispute relates to mortgaged property situate at 28/87, Roti Godam, Pheelkhana, Kanpur Nagar. E-auction notice was published on 6.1.20013 in “Dainik Jagran” notifying E-auction to be carried out on 14.2.2013 One of the condition in the auction notice reads as under:

English Translation by the Court:

“The successful bidder shall after adjustment of EMD amount have to deposit 25 per cent of the sale price within 48 hours; and he shall have to deposit the remaining 75 per cent amount in 15 days or prior thereto or within the time limit extended in writing by the authorised officer. In case of successful bidder's failure in payment, the amount deposited by him shall be confiscated and the property shall be auctioned off; and he shall have not claim on the property/amount.”

5. The E-auction was carried out and bid submitted by petitioners on 14.2.2013 was found highest. The Bank accepted his rate vide letter dated 27.2.2013 and also acknowledged 25 per cent of the bid amount i.e Rs. 9,60,500/- paid by him but directed that balance bid amount of Rs. 28,69,500/- should be paid by him within 15 days from the date of E-auction. It was also said that after receiving full payment, the Bank will issue sale certificate to the petitioner. It was also said that acceptance of sale is subject to confirmation by Bank as secured creditor. Petitioners sent reply accepting that he would pay the balance amount within 15 days as per the advertisement. The balance amount was paid on 13.3.2013

6. When the petitioners proceeded to take possession of the property in dispute, borrowers preferred Writ Petition No. 20653 of 2013 challenging auction notice as well as auction, expressing their readiness to pay the amount in instalments. The writ petition was dismissed on the ground of alternative remedy permitting borrowers to approach Debt Recovery Tribunal (hereinafter referred to as “DRT”) under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “Act, 2002”) pursuant whereto Prem Narayan Sahgal, the borrower, instituted Securitisation Application No. 133 of 2013 before DRT. It was contested by Bank as well as petitioners but DRT by judgment dated 19.12.2013 allowed it observing that 75 per cent of the amount was not paid as per advertisement and, therefore, no rights have accrued to petitioners. Thereagainst, petitioners preferred appeal before Debt Recovery Appellate Tribunal (hereinafter referred to as “DRAT”) which has been dismissed by DRAT vide impugned order dated 21.3.2014

7. The possession of property was taken by Bank under Act, 2002, and, therefore, auction thereof also would be governed by statutory provisions regulating the same. It is no doubt true that the procedure for auction has been given in detail in Rule 9 of Rules, 2002 which reads as under:

“9. Time of sale, issues of sale certificate and delivery of possession, etc. - (1) No sale of immovable property under these rules shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to Sub-rule (6) or notice of sale has been served to the borrower.

(2) The sale shall be confirmed in favour of the purchaser who has offered the highest sale price in his bid or tender or quotation or offer to the authorised officer and shall be subject to confirmation by the secured creditor: Provided that no sale under this rule shall be confirmed, if the amount offered by sale price is less than the reserve price, specified under Sub-rule (5) of rule 9: Provided further that if the authorised officer fails to obtain a price higher than the reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at such price.

(3) On every sale of immovable property, the purchaser shall immediately pay a deposit of twenty-five per cent of the amount of the sale price, to the authorised officer conducting the sale and in default of such deposit, the property shall forthwith be sold again.

(4) The balance amount of purchase price payable shall be paid by the purchaser to the authorised officer on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties.

(5) In default of payment within the period mentioned in Sub-rule (4), the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.

(6) On confirmation of sale by the secured creditor and if the terms of payment have been complied with, the authorised officer exercising the power of sale shall issue a certificate of sale of the immovable property in favour of the purchaser in the form given in Appendix V to these rules.

(7) Where the immovable property sold is subject to any encumbrances, the authorised officer may, if the thinks fit, allow the purchaser to deposit with him the money required to discharge the encumbrances and any interest due thereon together with such additional amount that may be sufficient to meet the contingencies or further cost, expenses and interest as may be determined by him.

(8) On such deposit of money for discharge of the encumbrances, the authorised officer may issue or cause the purchaser to issue notices to the persons interested in or entitled to the money deposited with him and take steps to make the payment accordingly.

(9) The authorised officer shall deliver the property to the purchaser free from encumbrances known to the secured creditor on deposit of money as specified in sub-rule (7) above.

(10) The certificate of sale issued under Sub-rule (6) shall specifically mention that whether the purchaser has purchased the immovable secured asset free from any encumbrances known to the secured creditor or not.”

8. One of the argument is that if the advertisement makes the conditions of deposit differently than what is prescribed under Rules, then it should be the advertisement which must prevail.

9. The submission of learned counsel for petitioner, in my view is misconceived. When the Statute governs the procedure for auction, it is the procedure prescribed in the Statute which will prevail and if an auction has been conducted in a manner other than what is prescribed in the Rules, such an auction would be ex facie be illegal.

10. Apex Court in Malik Mazhar Sultan v. U.P.P.S.C, JT 2006 (4) SC 531, in the context of the qualification for appointment published in the advertisement and prescribed in the Rules and if there is any variance, has already held that it is the Rule which shall prevail. The Court said:

“Undoubtedly, the excluded candidates were of eligible age as per the advertisement but the recruitment to the service can only be made in accordance with the rules and the error, if any, in the advertisement cannot override the Rules and create a right in favour of a candidate if otherwise not eligible according to the Rules.” (emphasis added)

11. Therefore in the present case, the auction since the very beginning is vitiated in law having prescribed a different procedure with respect to deposit by auction purchaser, than what is prescribed in the Rules. DRT, therefore, was right in allowing the application of borrower challenging the auction.

12. So far as the effect of interpretation of Rule 9 of Rules, 2002 is concerned, it has already been considered in General Manager Shree Sidheshwar Cooperative Bank Ltd. v. Iqbal (2013) 10 SCC 83 and in para 17 and 18 thereof, it has said as under:

“17. Rule 9 provides for the detailed procedure with regard to sale of immovable property including issuance of sale certificate and delivery of possession. Sub-rule (1) of Rule 9 states that no sale of immovable property shall take place before the expiry of 30 days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to Sub-rule (6) or notice of sale has been served to the borrower. Sub-rule (2) provides that sale shall be confirmed in favour of the purchaser who has offered the highest sale price in his bid. This is subject to confirmation by the secured creditor. There is a proviso appended to Sub-rule (2) which provides that no sale under this rule shall be confirmed if the amount offered by sale price is less than the reserve price but this is relaxable in view of the second proviso appended to Sub-rule (2). Sub-rule (3) lays down that on every sale of immovable property, the purchaser shall immediately make the deposit of 25% of the amount of the sale price. In default of such deposit, the property shall forthwith be sold again. Sub-rule (4) provides that the balance amount of purchase price payable shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of the immovable property or such extended period as may be agreed upon in writing between the parties. Sub-rule (5) makes a provision that if the balance amount of purchase price is not paid as required under Sub-rule (4), then the deposit shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold. According to Sub-rule (6), on confirmation of sale by the secured creditor and if the terms of payment have been complied with, the authorised officer exercising power of sale shall issue a certificate of sale of the immoveable property in favour of the purchaser in the form given in Appendix V to the 2002 Rules.

18. A reading of Sub-rule (1) of Rule 9 makes it manifest that the provision is mandatory. The plain language of Rule 9(1) suggests this. Similarly, Rule 9(3) which provides that the purchaser shall pay a deposit of 25% of the amount of the sale price on the sale of immovable property also indicates that the said provision is mandatory in nature. As regards balance amount of purchase price, Sub-rule (4) provides that the said amount shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of immovable property or such extended period as may be agreed upon in writing between the parties. The period of fifteen days in Rule 9(4) is not that sacrosanct and it is extendable if there is a written agreement between the parties for such extension. What is the meaning of the expression ‘written agreement between the parties' in Rule 9(4)? 2002 Rules do not prescribe any particular form for such agreement except that it must be in writing. The use of term ‘written agreement’ means a mutual understanding or an arrangement about relative rights and duties by the parties. For the purposes of Rule 9(4), the expression “written agreement” means nothing more than a manifestation of mutual assent in writing. The word ‘parties' for the purposes of Rule 9(4) we think must mean the secured creditor, borrower and auction purchaser.”

13. From the record, it appears that auction was held in the present case on 14.2.2013 Petitioner was the highest bidder offering 5,80,000/-. The Recovery Officer accepted the same but sought confirmation from Secured Creditor, i.e, Bank which confirmed it on 27.2.2013 Petitioner's earnest money deposited on 1.2.2013 was found equivalent to 25 per cent of bid which was treated to be compliance of Rule 9(3). Rest of the amount the petitioner was to deposit with the Authorized Officer within 15 days of the confirmation of sale. Here the confirmation of sale means confirmation by this Authorized Officer inasmuch confirmation of sale by Secured Creditor is provided in Rule 9(6) which clearly says, “if the terms of payment have been complied with”, meaning thereby that situation will come subsequently when entire payment is made and matter is sent to Secured Creditor for its confirmation. Moreover, the Bank did not extend the period of deposit of 75 per cent and the Bank's letter dated 27.2.2013 clearly said that the deposit should be made within 15 days of E-auction, meaning the period would commence from 14.2.2013 and petitioner, therefore, was to deposit 75 per cent of the amount on or before 1.3.2013 (February being of 28 days in 2013). The payment actually was made on 13.3.2013 which is clearly not in accordance with Rule 9(4). Since the Rules 9(4) has also been held mandatory and there is no extension of time by the parties, it, thus, cannot be said that there was compliance of Rule 9 so as to validate the sale in question. The orders passed by DRT and DRAT, therefore, holding the auction vitiated in law cannot be said to be faulty in any manner, either in law or otherwise. No interference, therefore, is called for.

14. The writ petition lacks merit. Dismissed.