Fullerton India Credit Company Ltd. v. Advance Surfactants India Ltd. And Others

These two appeals, one of which is by the Financial Institution and the other one by an auction purchaser, are being disposed of by this common order as they challenge the samefinal order dated 01.11.2019 of the Tribunal below(DRT-III, Delhi) passed in Securitisation Application(S.A.) filed by respondents 2 to 9in both the appeals(borrowers-mortgagors) under Section 17(1) of SARFAESI Act challenging the measures initiated by their secured creditor, Fullerton India Credit Company Ltd.(appellant in Appeal No.451/2019), under Sections 13(2) and 13(4) of SARFAESI Act, including auction sale of their property i.e.Khasra No. 510/1 (2-4), 511/1 (5-5) and Khasra No. 511/2/1 Village Rajokari, New Delhi,(hereinafter to be referred as the mortgaged property) measuring 10450 sq.yds.and some construction of 16500 sq.ft., which they had mortgaged in favour of the said Financial Institution to secure the repayment of loan of over twenty

3 of 46 Appeal Nos.451/2019 & 481/2019 crores given to them. By the impugned order the learned DRT has allowed the S.A. of respondents 2 to 9 herein and set aside the E- auction sale of their mortgaged property for Rs.19.80 crores of rupees on 09.01.2019 though reserve price of that property was fixed at Rs. 25 crores in the year 2018 at the time of first auction and directed return of the auction money to the auction purchaser, appellant in appeal no. 481/2019 and respondent no. 10 in the other appeal of the Financial Institution.

2. Value of the mortgaged property was being claimed by owners/mortgagors(respondents 2 to 9) to be over hundred crores of rupees and that was also their grievance before the DRT that the property of that huge market value which was assessed as per the valuation report of FIs valuer to be Rs. 65 crores at the time of sanction of loan, According to the case of the borrowers loan of Rs. 23 crores was sanctioned by the FI by requiring the borrowers to give security of property having 200% value of the amount of loan being sanctioned.Another ground of challenge to the E-auction of the mortgaged property raised by the securitisation applicants/borrowers in their S.A. was that the authorised officer of the FI had colluded with the so called successful and sole auction purchaser to virtually gift himthe mortgaged property by throwing to the winds all the Rules framed under SARFAESI Act governing auctions of immovable secured assets of defaulting borrowers. The learned DRT did not accept the challenge to the valuation of the mortgaged property but accepted the other ground of challenge to the E-auction of the mortgaged property in favour of the appellant of Appeal No. 481/2019, Pradeep Kumar Lather. The learned DRT concluded while setting aside the E-auction conducted 09.01.2019 that the same was vitiated on account of fraud

4 of 46 Appeal Nos.451/2019 & 481/2019 practiced by the authorised officer in collusion with the person to whom the mortgaged property was sold declaring him as the successful bidder for his having given the bid of Rs. 19.85 crores 09.01.2019 as against the reserve price of Rs.19.80 crores. It has also been the grievance of the borrowers that when their property was put to auction for the first time in the year 2018 and again in the same year the authorised office had fixed the reserve price at Rs. 25 crores then how could the reserve price be scaled down to Rs. 19.80 crores in December, 2018 for the auction to be conducted on 09.01.2019 in which the appellant Pradeep Kumar Lather succeeded in buying the propertyfor Rs.19.85 crores. It was the argument of the learned counsel for the borrowers that even though they had not filed any cross appeal against the rejection of their challenge to the valuation of the mortgaged property they still could impugn the same even in the appeals of the Financial Institution and the so called auction purchaser who in fact be aptly said to be the donee of the mortgaged property and the authorised officer being the donor of the mortgaged property which property partakes the character of socialist property as was the expression used by the Honble Supreme Court of India in a judgment reported in 1995 AIR SC 2195 or State property after possession thereof is taken over by the financial institution to sell the same to recover public money

3. The two appellants in these appeals have challenged the setting aside of the auction sale conducted on 09.01.2019 primarily for the reasons that the learned DRT has ignored the fact that the alleged irregularities in the conduct of the E-auction were not of mandatory nature and the alleged deficiencies could be waived by the financial institution as the secured creditor which it did and succeeded in

5 of 46 Appeal Nos.451/2019 & 481/2019 recovering its outstanding dues of almost twenty crores which would not have been possible considering the fact that even in four attempts prior to the auction notified for 09.01.201 the mortgaged property could not attract any buyer.

4. The learned DRT has narrated in the impugned order the factual background of the case in detail as also the arguments raised on behalf of the two appellants herein and the borrowers. Therefore, I deem it appropriate to re-produce the impugned order itself. It reads as under:- Initially, the present securitization application has been filed by the applicants praying therein to set aside / quash the notice dated 19.04.2018 under Rule 8(6) and 9(1) of Security Interest ( Enforcement) Rules 2002 in respect of property i.e. built up property and land situated at Khasra No. 510/1 (2-4), 511/1 (5-5) and Khasra No. 511/2/1 Village Rajokari, New Delhi and further proceedings arising out from the said notice including auction proceedings for 26.05.2018 along with other relief(s).

2. Thereafter, an application being I.A No. 330/2019 was filed on behalf of applicants praying therein to amend the present S.A which was allowed vide order dated 28.09.2019 of this Tribunal, accordingly, the amended S.A was filed by the applicants. By way of amended S.A, it has been prayed on behalf of the applicants to quash the Sale Notice dated 19.12.2018 qua the subject property comprised in Khasra No. 510/1 (2-

4), 511/1 (5-5) and Khasra No. 511/2/1 Village Rajokari, New Delhi- 110038 admeasuring 10450 sq. yds. (plot area) along with construction therein admeasuring 16500 sq. ft. (hereinafter referred to as property- in-question) along with other relief(s).

3. Brief facts of the case, as per amended S.A, term loan facility, being secured term loan, was availed by the applicant along with other Co-borrowers to the tune of Rs. 23.0 crore from the respondent no. 1 FI and the same was sanctioned vide letter dated 27.02.2015 addressed to applicant no. 1 M/s Advance Surfactants India Ltd. It is pertinent to note that at the time of sanctioning the loan amount, the respondent no. 1 was secured with a security cover of 200% of the loan amount and the same is part and record of the sanction letter dated 27.02.2015, which was secured by the land in question in the form and manner of being

6 of 46 Appeal Nos.451/2019 & 481/2019 equitable mortgaged property. The said loan facility was restricted in the year 2016 and the same was facilitated to the borrower vide sanction letter dated 29.06.2016, whereby the entire outstanding loan amount was restructured for a tenure of 340 months. It is reiterated that the borrower maintained a security cover of 1.84 times of the outstanding loan amount in the form of creating first charge over the form of creating first charge over the property in question.

4. During the end of the year 2016, the applicant / borrower came across such tectonic shifts in the market conditions which were unfavourable, which required further funds from the lead financial institutions like the respondent no. 1 who are capable to evacuate business from such unforeseen situations and circumstances. Hence, the applicant / borrower made many such request of further funding but the same was ignored and every plea made by the applicant / borrower to the management of the respondent no. 1 was rejected at the behest without any consideration and acknowledgement. The applicant / borrower in spite of every effort to save the loan account was declared NPA by the respondent no. 1 FI was served upon with a demand notice dated 08.05.2007 under Section 13(2) of SARFEASI Act, 2002. The applicant at every stage created such opportunities which could evolve in peaceful settlement between the parties in such ways and circumstances where the applicant could stand justified with the intent of clearing the dues towards the loan account. The applicant / borrower and respondent no. 1 came to an understanding, which was finally made part and record of the Memorandum of Understanding signed and executed between the parties was performed partly and a sum of more than Rs. 18.0 crore. The said understanding arrived between the parties was performed partly and a sum of more than Rs. 81,31,000/- was paid during the period from June 2017 till January 2018 and thereafter the understanding could not be performed as per the terms and conditions. The applicant/ borrower was served upon with the notice of possession of immovable property dated 05.09.2017 under Rule 8 (1) in exercise of the powers conferred to the respondent no. 1 under Section 13(4) of the SARFEASI Act, 2002 and the same was affixed outside the premises of property in question, which was totally against the terms of the MoU dated 29.06.2017. It is notworthy to state that the Notice issued to the applicant/ borrower under Section 13(4) read with Rule 8 of SARFEASI Act suffers from many infirmities since no publication was ever made in the local newspaper nor the same was reported anywhere. Again, the parties to the loan agreement arrived at an understanding and executed Memorandum of Understanding dated 22.09.2017 towards the payment of the loan amount and time was

7 of 46 Appeal Nos.451/2019 & 481/2019 extended till 15.03.2018 and the amount was also negotiated as Rs. 16,37,30,712/-, which was duly exchanged between the parties through e-mails at the relevant time but could not be got executed, but the applicant was never given the impression by the respondent no. 1 that they are working towards the settlement and no coercive action or even legal action would be started against the applicant.

5. The applicant / borrower, in another matter titled as SBI Vs. Advance Surfactants India Ltd. and Ors. had obtained an advance order dated 08.02.2018 regarding the attachment of the shared of the property in question. The applicant / borrower made every endeavour to fulfil the obligation towards the payment as per the schedule but the same were again lapsed because of financial constraints of the applicant and another MoU was exchanged wherein the time was extended till 20.08.2018 and the amount was fixed at Rs. 16,80,00,000/- but that MoU was though exchanged through E-mails dated 27.03.2018 but not got properly executed. Again, as against the terms of not taking any action during June 2017 till January 2018, the respondent no. 1 FI approached the court of Ld. CMM on 22.12.2017 itself for taking the physical possession of the property in question and was successful in obtaining the order from the court no 18.01.2018. The applicant borrower was served with a notice dated 17.02.2018 for possession of the property in question by the receiver intimating the applicant that he shall be taking the physical possession of the property in question on 05.03.2018 but the possession was not taken. The applicant further found out that the respondent no. 1 had obtained the orders without the disclosure of the correct facts and circumstances arrived between the parties. Thereafter, on 06.04.2018, the respondent FI, acted in an illegal and arbitrary manner, and obtained the physical possession of the property in question, hence, applicant/borrower was not even allowed to take out the necessary documents and movables properties, on which the respondent no. 1 does not have any right or claim whatsoever. Further, the applicant has kept important documents and business plans along with such properties which are worth more than Rs. 118.0 crore. Simultaneously, after taking the physical possession of the property in question on 06.04.2018, the applicant / borrower was served with possession notice dated 07.04.2018. In this possession notice, the respondent no. 1 FI concealed the fact of serving the notice under Section 13(4) of SARFEASI Act and only gave representation of serving the notice of under Section 13(2) of SARFEASI Act, 2002. In the possession notice dated 07.04.2018, the applicant/ borrower was further served with notice dated 19.04.2018 under Rule 8(6) and 9(1) of Security Interest (Enforcement) Rules, 2002, and the applicant came to

8 of 46 Appeal Nos.451/2019 & 481/2019 know that the reserved price of the mortgaged property has been fixed way below that the actual market price i.e. at 25.03 crore and the actual valuation of the property in question assessed at the time of the sanctioning the loan by the respondent no. 1 more than Rs. 65.0 crore and now the market price is Rs. 118.0 crore. It is pertinent to state that the market value of the property in question assessed by the respondent no. 1 at Rs. 25,03,00,000/- as per notice dated 19.04.2018. Further, the respondent no. 1 acted so hurriedly and forget to comply with the statutory provisions and rules and even did not get the publication issued in the Newspaper. Thus, the applicant to save the interest and protect the rights vested in the property in question against the illegal, unethical, actions taken by the respondent no. FI to usurp the property and alienating it cause huge financial loss and dignity of the applicant/ borrower, has come up before this Tribunal.

6. The respondent no.1 issued Sale Notice dated 19.12.2018 whereby it put the property in question to auction on 09.01.2019 and the reserve price was fixed at a dismally low amount of Rs. 19,80,00,000/-. The intending purchasers were required to deposit earnest money by 07.01.2019 before 5:00 P.M. It is stated in the SA that the Sale Notice dated 19.12.2018 was drawn in gross violation of Rules 8 & 9 of the Security Interest (Enforcement) Rules, 2002. Being aggrieved by the Sale Notice dated 19.12.2018, the applicants preferred I.A No. 12/2019 challenging the same, however, vide order dated 07.01.2019, this Tribunal rejected the prayer of the applicants for interim relief. It is pertinent to note that on 07.01.2019, during the course of hearing, one Dr.Samundarsingh, was present and as per the submission of the Ld. Counsel for the respondent FI, he was the intending bidder who wished to await the outcome of I.A No. 12/2019 before participating in the auction. This Tribunal pronounced the order dated 07.01.2019 in the open court at about 6 pm. On 09.01.2019, Dr.Samundar Singh informed the applicant no. 3 that the property in question had since been auctioned and his bid has been accepted by the respondent no. 1. The applicants, vide e-mail dated 15.01.2019 and whatsapp message dated 15.01.2019, requested the authorise officer of respondent no. 1 to convey the details and particulars of the auction sale dated 09.01.2019 as also the record / proceedings thereof. But the authorised officer did not furnish and convey the aforementioned details and record. Hence, the applicant no. 3 was constrained to file I.A No. 105/2019 seeking issuance of directions to respondent no. 1 to discover and produce on oath the entire record and information pertaining to the auction sale dated 09.01.2019. The respondent no. 1, in its reply to I.A No. 105/2019, took a specious defence that it is not under any obligation to make a

9 of 46 Appeal Nos.451/2019 & 481/2019 disclosure of the details and record relating to the auction sale dated 09.01.2019, however, it is stated in the reply that the sale has since been confirmed in favour of one Sh. Pradeep Kumar Lathar for an amount of Rs. 19.85 crore and no other information or detail was disclosed by the respondent no. 1. The respondent no. 1 and its authorised officer are guilty of dishonest and fraudulent concealment of the record of the auction sale dated 09.01.2019, which, in any event, if farcical and violative of Rules 8 & 9 of the Security Interest ( Enforcement) Rules, 2002 and therefore, void. Further, the respondent no. 1 and its authorised officer have dishonestly suppressed the complete details of respondent no. 2 as well as details relating to the auction sale dated 09.01.2019, including but not limited to the details of earnest money deposit received from the intending bidder, details furnished by the intending bidder, bidder sheet / run sheet, the print out of the electronic data relating to the auction sale dated 09.01.2019, the details of payment received from the auction purchaser, status of confirmation of sale, detail of payment of balance purchase price, issuance of sale certificate as also delivery of possession of the property in question to the auction purchaser. It is also stated that the respondent no. 1 and its authorised officer, have sold the property in question to respondent no.

2 for an extremely low price, which is far below the market value thereof. The respondent no. 1 and its authorised officer are also guilty of perpetrating fraud upon this Tribunal as they introduced Dr.Samundar Singh as the intending bidder on 07.01.2019, whereas it has been alleged by respondent no. 1 that it is the respondent no. 2, who has purchased the property in question for a sum of Rs. 19.85 crore. It is further stated that the auction sale dated 09.01.2019 is void ab initio and nullis juris, being violative of the constitutional right of the applicants to hold property, guaranteed to them under Article 300 A of the Constitution of India. Being aggrieved against the said illegal acts of the respondent no. 1, the applicant is preferring the present S.A.

7. Reply to the amended S.A has been filed on behalf of respondent no. 1 i.e Fullerton India Credit Company Ltd. vehemently opposing the S.A. Respondent no. 1 has raised various objections stating that in the present case since the auction notice had already been published in newspapers on 23.04.2018, the prayer for restoration of possession stands extinguished in as much as right to redemption comes to an end on the date of publication of sale notice in newspapers as per Section 13(8) of the SARFEASI Act and consequent to registration of Sale Certificate dated 09.04.2019. Further, it is stated in the reply that the respondent no. 1 has strictly complied with the provisions envisaged in the SARFEASI Act and rules framed thereunder. It is further contended

10 of 46 Appeal Nos.451/2019 & 481/2019 that even if any irregularity not illegality has been conducted by the respondent no. 1 in issuance of Sale Certificate to respondent no. 2 does not tantamount to vitiate the entire sale proceedings conducted by the respondent no. 1 as compliance of period of 15 days in Rule 9(4) of Security Interest (Enforcement) Rules, 2002 is not that sacrosanct and it is extendable if there is a written agreement between the parties for such extension. It is also stated that the respondent no. 1 has crystallized the ownership rights in favour of respondent no. 2 / auction purchaser on non-fulfilment of conditions by applicants / borrowers and same cannot be taken away from the auction purchaser holding the fact that price fetched through auction sale was not correct, therefore, present S.A has been filed merely to vitiate the proceedings initiated by the respondent no. 1 herein to recover the public money.

8. It is mainly stated in the reply that the loan facility of Rs. 21,93,02,636/- was provided to the applicants / borrowers by the respondent no. 1 on 30.06.2016 and in order to secure the said loan, the borrowers created security interest in the property in question to the respondent no. 1 way of deposit of title deeds of the said secured asset. However, after availing the said loan facility, the applicant / borrowers did not adhere to the financial commitments, hence, their account was declared as NPA on 30.04.2017. Thereafter, respondent no. 1 issued a demand notice dated 08.05.2017 (dispatched on 11.05.2017) to the applicants under Section 13(2) of the SARFEASI ACT which was duly sent through speed post and was served on 13.05.2017 and 15.05.2017. In response to said Demand Notice, the applicants along with other borrowers approached the respondent no. 1 for settlement and a MoU along with Settlement Instalment Schedule dated 29.07.2017 ws executed between the respondent no. 1 and applicant / borrowers along with all other borrowers but they failed to adhere to the terms of settlement, hence, the respondent no. 1 decided to enforce the security interest initiate measures under Section 13(4) of the SARFEASI Act. Thereafter, authorised officer of respondent no. 1 went to take the actual physical possession of the secured asset but he could not take the constructive possession of the secured asset vide delivery of possession notice dated 15.01.2018 on the borrowers, which was affixed on the conspicuous part of the secured asset and also published in two leading newspapers in compliance of Rule 8(1) and (2) of the Security Interest ( Enforcement) Rules, 2002. The respondent no. 1 further filed an application under Section 14 of the SARFEASI Act for appointment of Receiver which was allowed vide order dated 18.10.2018 and the Ld. Receiver took physical possession of the secured asset vide issuance of possession notice dated 07.04.2018 which was hand delivered as well as

11 of 46 Appeal Nos.451/2019 & 481/2019 affixed on the property in question and also published in two leading newspapers namely Business Standard in both Hindi and English Edition on 10.04.2018 as per Rule 8 of the Security Interest ( Enforcement) Rules, 2002. Then the properties were got valued by the authorised officer of the respondent no. 1 and subsequently at the time of getting the measurement of the secured asset, it came to the knowledge of respondent no. 1 that some parts of the said built up property and land could not be taken by the ld. Receiver under confusion, therefore, one another application was filed before Ld. CMM for seeking directions to the Receiver to take the possession of remaining portion of the secured asset. Same was allowed vide order dated 13.07.2018 passed by Ld. CMM and subsequent thereto the possession of the remaining portions of the secured assets were also taken by the respondent no. 1 on 30.08.2018 vide possession notice dated 31.08.2018 which was delivered and affixed on the property in question and the same was also got published in two leading newspapers namely Jansatta in Hindi Edition on 05.09.2018 and Indian Express in English Edition on 04.09.2018 in accordance with Rule 8 of Security Interest ( Enforcement) Rules, 2002. Thereafter, after conducting valuation of the secured asset from an approved valuer and in consultation with the secured creditor, the authorised officer of the respondent no. 1 fixed the reserve price of the secured asset at Rs. 25.03 crore for sale of secured asset as provided under Rule 8(5) of Security Interest (Enforcement) Rules, 2002. After compliance of Rule 8(6) of Security Interest (Enforcement) Rules, 2002, the secured asset was put up for auction sale by publication of sale notice in two leading newspapers namely Business Standard in English Edition and in vernacular language i.e. Hindi Edition on 23.04.2018. The date of auction was fixed for 26.05.2018 and the reserve price of the secured asset is fixed for an amount of Rs. 25.03 crore. Thereafter, in compliance of Rule 8(6) and 9(1) of Security Interest (Enforcement) Rules, 2002; the secured asset was put up for auction sale by publication in two leading newspapers namely Times of India (English Edition) and Navbharat Times (Hindi Edition) on 15.07.2018 for issuance of pre sale notice dated 12.07.2018 to all the borrowers. The said sale notice was also affixed on the property in question. The date of auction was fixed for 20.08.2018 and the reserve price of the secured asset is fixed for an amount of Rs. 25.03 crore, however, the instant auction notice failed due to lack of bids.

9. Thereafter, in compliance of Rule 8 (6) of Security Interest ( Enforcement) Rules, 2002, the secured asset was put up for auction sale by publication of sale notice in two leading newspapers namely Times of India (English Edition) and Navbharat Times (Hindi Edition) on

12 of 46 Appeal Nos.451/2019 & 481/2019 27.08.2018 for issuance of pre sale notice dated 25.08.2018 to the borrowers. The said notice was also affixed on the property in question and the date of auction was fixed for 12.09.2018 and the reserve price of the secured asset is fixed for an amount of Rs. 23.80 crore, however, the instant auction notice failed due to lack of bids.

10. Thereafter, in compliance of Rule 8 (6) and 9(1) of Security Interest (Enforcement) Rules, 2002; the secured asset was again put up for auction sale by publication in two leading newspapers having sufficient circulation and issuance of pre sale notice dated 11.09.2018 to the borrowers. The said sale notice was also affixed on the property in question. The date of auction was fixed for 29.09.2018 and the reserve price of the secured asset is fixed for an amount of Rs. 22.0 crore, however, the instant auction notice failed due to lack of bids. Thereafter, in compliance of Rule 8(6) and 9(1) of Security Interest (Enforcement) Rules, 2002; the secured asset was again put up for auction sale by publication in two leading newspapers namely Times of India and Navbharat Times on 20.12.2018 and having sufficient circulation and issuance of pre sale notice dated 19.12.2018 to the borrowers. The said sale notice was also affixed on the property in question on 20.12.2018 and having sufficient circulation and issuance of pre sale notice dated 19.12.2018 to the borrowers. The said sale notice was also affixed on the property-in-question. The date of auction was fixed for 09.01.2019 and the reserve price of the secured asset is fixed for an amount of Rs. 19.80 crore.

11. Thereafter, the sale was confirmed in favour of respondent no. 2

i.e. Pradeep Kumar Lather for an amount of Rs. 19.85 crore. However, the instant auction notice failed due to lack of bids. The respondent no.

2 / auction purchaser deposited a cheque as EMD amounting to Rs. 2.0 crore on 07.01.2019 to participate in the auction i.e. within the time stipulated in the auction notice dated 20.12.2018. Thereafter, the respondent no. 2 had to replace the cheque with the Demand Draft on 08.01.2019 but owing to unforeseen strike called by the banks, the banks were closed for two days i.e. 08.01.2019 & 09.01.2019, the respondent no. 2 vide letter dated 08.01.2019 requested time for one more day i.e. till 10.01.2019 to deposit the said EMD by way of DD as the DD could not be made to the circumstances beyond their control as the banks were closed on 08.01.2019 and 09.01.2019. The EMD stood deposited with the respondent no. 1. Thereafter, vide letter dated 22.01.2019, the respondent no. 2 / auction purchaser requested for grant of 90-days time w.e.f. date of sale of confirmation of sale i.e. 10.01.2019 for making the balance payment of 75% of total sale

13 of 46 Appeal Nos.451/2019 & 481/2019 consideration, on the ground of delayed payments from third parties. The respondent no. 1 under special circumstances, by exercising its powers under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 agreed to extend the time period from 15-days to 60-days from the date of sale confirmation i.e. 10.01.2018, by issuance of reply dated 12.02.2019. Subsequent to the extension of time, the respondent no. 2 paid an amount of Rs. 50.0 lac on 27.02.2019. Subsequent thereto, the respondent no. 2 issued letter dated 08.03.2019 wherein it was stated that respondent no. 2 was ready to make the payment of the balance sale consideration and thus sought confirmation for the issuance of sale certificate. Since the litigation proceedings were lis pendens before this Tribunal and DRT-1, Delhi; the respondent no. 1 filed an application before Hon'ble DRT-1, seeking formal permission of issuance of sale certificate post sale confirmation letter dated 10.01.2019 in accordance with Rule 9(6) of Security Interest (Enforcement) Rules, 2002 which was dismissed vide order dated 30.03.2019 for non maintainability that the DRT has never restrained respondent no. 1 / secured creditor from issuance of sale certificate. Thereafter, vide letter dated 01.04.2019, the respondent no. 1 called upon the respondent no. 2 to pay the balance amount as within 48-hourse and further stated that in case of failure, the respondent no. 1 by exercising its powers as conferred under Rule 9(5) of the Security Interest (Enforcement) Rules, 2002 shall forfeit the paid amount paid earlier. Vide email dated 02.04.2019, the respondent no. 2 again requested for extension of time till 09.04.2019 for making the full and final sale consideration amount since the respondent no. 2 was unable to arrange the remaining balance sale consideration. The respondent no. 2, by exercising its powers under Rule 9(4) of Secured Interest (Enforcement) Rules, 2002 agreed to further extend the time period of making balance payment till 09.04.2019 i.e. a total of 90-days from the date of sale confirmation dated 10.01.2019. Subsequent therefore, the respondent no. 1 issued sale certificate dated 09.04.2019 to the respondent no. 2 / auction purchaser as there was never any restrainment prepared in the form given in Appendix V to the Secured Interest (Enforcement) Rules, 2002 and the possession cum title documents of the secured assets was also given to the respondent no. 2 / auction purchaser. The respondent no. 1 has strictly complied with the provisions envisaged in the SARFAESI Act and rules framed thereunder, accordingly, it has been it has been prayed to dismiss the present SA.

12. Respondent no. 2 / auction purchaser has also filed its reply to the amended SA stating therein that the authorized officer of respondent no. 1 under SARFAESI Act has proceeded to put the property-in-question to auction by following due process of law and there is no cause of

14 of 46 Appeal Nos.451/2019 & 481/2019 action to stall or set aside the e-auction conducted successfully on 09.01.2019. The respondent no. 2, being the highest bidder, has been declared as successful bidder and the respondent no. 2 has already paid the entire consideration for the property within the time specified by the authorized officer of the respondent no. 1 and sale certificate has been duly executed and registered, thus, the sale stands concluded and there is no cause to reason to set aside the same. Further, it is stated in the reply that the respondent no. 2 is a third party bonafide purchaser who is entitled to be protected by this Tribunal in accordance with law settled by Hon'ble Supreme Court in the case of Sh. Sadashiv Prasad Singh Vs. Sh. Harinder Singh (2015) 5 SCC 574. It is important to note that the facts relied upon by the respondent no. 2 / auction purchaser, with regard to auction of the property-in-question, are similar to the facts, as relied upon by respondent no. 1 in its reply.

13. The applicants herein have also filed the evidence by way of affidavit of Sh. Ashok Mahindru, applicant no. 2 and director of applicants no. 5 to 9 who has proved & exhibited certain documents viz. Board Resolutions from applicants no. 5 to 9 and Special Power of Attorney from applicants no. 3 & 4 as Ex. AW-1/1 (colly); latest valuation report dated 11.04.2018 of approved assessor and valuer as Ex. AW-1/2; Sanction Letter dated 27.02.2015 (Ex. AW1/3 - marked as A); Sanction Letter dated 29.06.2016 (Ex. AW-1/4 - marked as B); Demand Notice dated 08.05.2017 issued under Section 13(2) of SARFAESI Act (Ex. AW- 1/5 - marked as C); Memorandum of Understanding dated 19.06.2017 as Ex. AW- 1 /6; Possession Notice dated 05.09.2017 as Ex. AW-1/7; Memorandum of Understanding dated 22.09.2017 as Ex. AW-1/8; Order dated 08.02.2018 passed in another SA titled as 'SBI Vs. Advance Surfactants India Ltd. and Ors.' (Ex. AW-1/9 - marked as D); Memorandum of Understanding dated 27.03.2018 as Ex. AW-1/10; Memorandum of Understanding dated 08.05.2017 as Ex. AW-1/11; Application filed by respondent no. 1 under Section 14 of SARFAESI Act (Ex. AW-1/12 - marked as E); Notice dated 17.02.2018 for taking possession of the property-in-question (Ex. AW-1/13 - - marked as F); another notice dated 07.04.2018 for taking the possession as Ex. AW- 1/14; possession notice dated 19.04.2018 as Ex. AW-1/15; Sale Notice dated 19.12.2018 for auction scheduled on 09.01.2019 as Ex. AW-1/16; order dated 30.03.2019 passed by Ld. DRT-1 in SA preferred by KU Resources Ltd. (Ex. AW-1/17 - marked as G); reply to Misc. Appeal no. 154/2019 filed by respondent & auction purchaser before Hon'ble DRAT (Ex. AW-1/18 & AW-1/19 - marked as H & I respectively); photographs evidencing demolition of constructed portions and carving out of sub-plots in the property are marked as Q (colly).

15 of 46 Appeal Nos.451/2019 & 481/2019

14. So far as respondent no. 1 is concerned, it has filed its evidence by way of filing an affidavit of Sh. BhupenderTanwar, authorized officer of respondent no. 1 who has proved & exhibited various documents viz. true copy of power of attorney in favour of the deponent as Ex. RW1/1 (OSR); copy of notice dated 08.05.2017 under Section 13(2) of SARFAESI Act along with postal receipts and delivery reports are marked as A (colly); order dated 18.01.2018 passed by Ld. CMM is marked as B; copy of possession notice dated 07.04.2018 along with photographs of affixation and publication in two leading newspapers as Ex. RW-1/4 (colly) (OSR); copy of Valuation Report dated 10.04.2018 with respect to secured asset along with certificate of approved valuer registered as a valuer is marked as C (colly); copy of notice for sale dated 19.04.2018 along with photographs of affixation and publication in two leading newspaper as Ex. RW-1/6 (colly) (OSR); copy of letter of rejection for revival of one time settlement as Ex. RW-1/7 (OSR); copy of notice for sale dated 19.12.2018 and public notice published in two leading newspapers as Ex. RW-1/8 (colly) (OSR); copy of letters dated 07.01.2019 & 08.01.2019 issued by respondent no. 2 as Ex. RW-1/9 (colly) (OSR); Sale Confirmation Letter dated 10.01.2019 issued by respondent no. 1 and letter dated 22.01.2019 issued by respondent no. 2 as Ex. RW-1/10 (OSR) and RW-1/11 (OSR) respectively; copy of reply dated 12.02.2019 issued by respondent no. 2 as Ex. RW-1/12 (OSR); copy of letter dated 08.03.2019 issued by respondent no. 2 as Ex. RW- 1/13 (OSR); copy of order dated 30.03.2019 passed by DRT-I, Delhi is marked as D; copy of letter dated 01.04.2019 issued by respondent no.

1 to respondent no. 2 as Ex. RW-1/15 (OSR); email dated 02.04.2019 sent by respondent no. 2 to respondent no. 1 is marked as E' (colly); and copy of Sale Certificate dated 09.04.2019 along with possession cum original title documents receipt dated 09.04.2019 as Ex. RW-1/17 (colly) (OSR).

15. So far as respondent no. 2 / Auction Purchaser i.e. Sh. Pradeep Kumar Lathar is concerned, he has also filed his evidence by way of his affidavit who has proved & exhibited certain documents viz. copy of the notice dated 05.09.2017 is marked as A; copy of order dated 18.01.2018 is marked as B; copy of possession notice dated 07.04.2018 is marked as C; copy of the e-auction sale notice dated 19.04.2018 is marked as D; copy of Application dated 07.01.2019 along with remarks / acceptance noted by respondent no. 1 as Ex. R2/5 (OSR); letter dated 08.01.2019 along with notings made by respondent no. 1 as Ex. R2/6 (OSR); copy of newspaper regarding strike of banks on 08.01.2019 & 09.01.2019 are marked as E; confirmation letter dated 10.01.2019 as

16 of 46 Appeal Nos.451/2019 & 481/2019 Ex. R2/8 (OSR); letter dated 22.01.2019 of respondent no. 2 as Ex. R2/9 (OSR); letter dated 12.02.2019 of respondent no. 1 regarding extension of time as Ex. R2/10 (OSR); letter dated 08.03.2019 of respondent no. 2 as Ex. R2/11 (OSR); order dated 30.03.2019 passed by DRT-I in SA filed on behalf of KU Resources Ltd. is marked as F; trailing emails dated 02.04.2019 is marked as G & copy of registered sale certificate is marked as H & I.

16. Heard and the record has been perused thoroughly. In the present matter, on behalf of Id. counsel for applicant herein, it is being argued that the availment of the loan facilities as well as mortgage by applicant no. 5 is not indispute, however, the property in question i.e. property comprised in Khasra No. 510/1(2-4), 511/1 (5-5) and Khasra No. 511/2/1 Village Rajokari, New Delhi - 110 038 admeasuring 10450 sq. yds. (plot year) along with construction therein admeasuring 16500 sq. ft. has been sold by way of auction for a meagre amount of Rs. 19.85 crore whereas property is worth Rs. 100.0 crore. In order to substantiate his contentions, Ld. counsel for applicants has relied upon the copy of Sale Deed of adjacent property, which is stated to be not more than 500 mtrs. away from the property-in-question, as the same was sold on 11.11.2011 for a sum of Rs. 83.0 crore and the area of the same was approximately 12,499 sq. yds. Simultaneously, the Ld. Counsel for the applicant relied upon the valuation of 11.04.2018, wherein property valuation has been assessed to the tune of Rs. 121.0 crore, therefore, it is contended that the valuation of the property-in-question by the respondent no. 1 has not been got done in proper manner. Even the same was not got done from the empaneled valuer, and the property-in- question was assessed at Rs. 19.80 crore, therefore, the same has been illegally sold for a sum of Rs. 19.85 crore to the auction purchaser i.e. respondent no. 2 herein.

17. Further, it is also argued that the sole bidder of the property-in- question was permitted to participate in the auction, that too in fraudulent manner, in the auction held on 09.01.2019, whereas the email was not received, as per mandate of the Security Interest (Enforcement) Rules and SARFAESI Act. Further, notice under Section 8(6) was sent on 19.12.2018, whereas simultaneously, notice under Section 9(1) was also issued on 20.12.2018, therefore, there was no clear notice of 30-days, as prescribed under the SARFAESI Act. Apart that, it is also vehemently argued by the Ld. counsel for the applicants that EMD amount was to be received by the respondent no. 1 as per the notice published in the newspaper by way of NEFT, RTGS or by way of DD and no other mode was there, but in the present matter, a cheque

17 of 46 Appeal Nos.451/2019 & 481/2019 was stated to have been deposited on behalf of respondent no. 2 i.e. Auction Purchaser on 07.01.2019 and thereafter on 08.01.2019, a letter was addressed on behalf of Auction Purchaser to the respondent no. 1 stating that as there was strike of the employees of the banks, therefore, the said payment was not made on the auction date i.e. by 5 pm on 07.01.2019. It is also stated that the auction purchaser requested the respondent no. 1 for return of the cheque while depositing the cheque amount and the said payment was not made before the auction date by 5 pm on 07.01.2019, as the same was deposited through RIGS on 10.01.2019 by the auction purchaser.

18. Further it is also argued that though the said amount of EMD was deposited by the auction purchaser, but rest of the payment which was to be deposited within 15-days, the respondent no. 1 invariably extended the period without taking any conscious decision by the Committee as it is apparent from the record that the entire rest of the amount was to be paid on or before 25.01.2019, but in between on 22.01.2019, a request letter was given by the auction purchaser for enlarging the time, which was not enlarged till 25.01.2019, but the same was extended on 12.02.2019 for 60-days. However, in the said period, no such amount was deposited on behalf of auction purchaser and again the same was extended on 02.04.2019 in spite of the fact that already the time extended for 60-days was expired on 09.03.2019, therefore, the said period was extended illegally on 02.04.2019 in spite of the fact that, if any, such period was to be extended, it should have been extended on or before 09.03.2019 i.e. before the expiry of said period of 60-days from the date of confirmation of sale i.e. 10.01.2019. It is also argued that merely on the basis that one SA has been filed by KU Resources Ltd. before the Ld. DRT-I, (wherein no such interim stay was granted vide order dated 30.03.2019), the time for depositing the balance auction consideration cannot be deemed to be extended, as no restraint order was issued by Ld. DRT-I in that process.

19. Ld. counsel for applicants also pressed on the arguments that vide letter dated 01.04.2019 of respondent no. 1, the entire balance amount was to be deposited by the auction purchaser within 48-hours failing which, the amount was to be returned to the auction purchaser, as he had failed to deposit the amount within the extended period and the said period has already been expired on 09.03.2019, but all of a sudden on 02.04.2019, one short email has been sent on behalf of respondent no. 1 thereby extending the time up to 09.04.2019, therefore, neither the payment has been deposited, as agreed, and no such agreement was there and the period was extended in causal manner by the

18 of 46 Appeal Nos.451/2019 & 481/2019 authorized officer without taking any conscious decision and there was no sufficient reason for enlarging the period. Ld. counsel for applicant also relied upon certain citations viz. Sanjay Vs. Anil &Ors. [1(2018) BC

27 (SC) ]; Judgement dated 03.07.2012 passed by Hon'ble Division Bench of Madras High Court in W.P. No. 13428/2011 in the case titled as 'Varalakshmi Vs. The Chief Manager,. J. Rajiv Subramanium&Ors. Vs. Pandiyas&Ors. [ (2014) 5 SCC 651 1; Ram Kishun and Ors. Vs. State of Uttar Pradesh and Ors. [ (2012) 11 SCC 511 1; Swastik Agency &Ors. Vs. State Bank of India (AIR 2009 Orissa 147); State of Bihar &Anr. Vs. JAC Sa/danha [ (1980) 1 SCC 554 ]; Mardia Chemicals Ltd. &Ors. Vs. Union of India &Ors. [ (2004) 4 Supreme Court Cases 311 ]; U. Nilan Vs. Kannayan (Dead) through [Ws. [AIR 1999 SC 37501; Moolchand&Ors. Vs. Fatima Sultana Begum &Ors. [ (1995) 6 SCC 7421 and Kanika Swami Vs. State of U.P. [ II (2018) BC 401 (All.) J.

20. Apart that, Ld. counsel also relied upon one judgment of Honble High Court of judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in the case titled as Venshiv Pharma Chem (P) Ltd. and Ors. Vs. State Bank of India wherein it is held that there must be clear cut gap of 30-days between the notice under Section 8(6)(1) of the Security Interest Rules 2002 and the issuance of notice under Section 9(1) of the Rules. Further, Ld. counsel for applicant also relied upon the similar judgment of Hon'ble DRAT in Misc. Appeal No. 55/2018 dated 09.07.2018, wherein it is held that the time period cannot be extended at the whims and fences of the authorized officer and discretion should not be exercised whimsically and merely on the asking of the auction purchaser and the said exercise of said discretion is always subjected to judicial scrutiny. Accordingly, prayed that as the valuation of the property-in-question has been done in illegal manner, and mandatory compliances have not been made for receiving the amount of the auction and deposit of the EMD etc., the entire auction proceedings are liable to be set aside being illegal &malafide and also prayed to forfeit the amount of the auction purchaser i.e. respondent no. 2 herein accordingly.

21. On the other hand, on behalf of Ld. counsel for respondent no. 1, it is being argued that the valuation of the property-in-question was rightly done to the tune of Rs. 25.0 crore at the initial stage i.e. on 10.04.2018. It is also being argued that in the present matter, Sale Deed dated 15.09.2004 regarding purchase of said property has been placed on record wherein, the area measuring 7450 sq. yards has been shown and the same has been purchased for a sum of Rs. 25.50 crore, however, Sale Deed dated 15.04.2014 has been executed for different portion

19 of 46 Appeal Nos.451/2019 & 481/2019 wherein 10 Biswas measuring 550 sq. yds. for Rs. 6.0 lac, therefore, valuations have been done in the year 2004 and 2014, which is much less than the valuation of the applicant herein and despite that the property-in-question has been got assessed from approved valuer for a sum of Rs. 25.0 crore and first auction were to be held on 26.05.2018 with reserve price of Rs. 25.03 crore. Thereafter, subsequent four other auctions were got fixed i.e. on 20.09.2018 with reserve price of Rs. 25.03 crore; on 12.09.2018 with reserve price of Rs.23.80 crore; on 29.09.2018 with reserve price of Rs. 22.0 crore; on 20.10.2018 with reserve price of Rs. 22.0 crore but no bidder turned up and the said auctions were failed. Accordingly, reserve price was reduced for the present auction which was held on 09.01.2019 with reserve price of Rs. 19.80 crore and a bid for Rs. 19.85 crore has been received; accordingly, Sale Certificate has also been issued to the auction purchaser. Further, it is also argued that as already number of auctions have been conducted, therefore, instead of going to the private treaty, the respondent no. 1 still proceeded with the auction and that was held on 09.01.2019, accordingly, it could not be said that only one bidder has been permitted to participate in the auction. Further, it is also argued that the time period can be extended by 3-months and same was accordingly extended from time to time, but the amount was not deposited with the stipulated period of three months only. So far as payment of EMD by way of cheque is concerned, as the said payment was deposited by way of RTGS on 10.01.2019, accordingly, the cheque was returned to the auction purchaser. Apart that, it is argued that the time period is not sacrosanct as laid down in the judgment of Honble Supreme Court of India in the case of General Manager, Sr.Siddeshwara Cooperative bank Ltd. & Mr. Vs. Ikbal&Ors. reported in (2013) 10 SCC 83.

22. Ld. counsel for respondent no. 1 further relied upon the judgment of Hon'ble Supreme Court of India in the case titled as Rosali

V. Vs. Taico Bank and Ors. reported in MANU/SC/7044/2017 and also stated that as there was strike of the banks on 08.01.2019 & 09.01.2019 therefore the payment deposited by the auction purchaser was accepted by the respondent no. 1 as the property-in-question could not be sold for long time since 26.05.2018, accordingly, the said liberty was given to the auction purchaser and the amount was received by way of RIGS on 10.01.2019 i.e. 25% of the bid amount and thereafter, with the mutual consent, further period was extended and the amount was rightly deposited by the auction purchaser on 08.04.2019. Accordingly, the Sale Certificate was issued on 09.04.2019, which was got registered on 30.04.2019. Thus, it is contended that there is no illegality or irregularity

20 of 46 Appeal Nos.451/2019 & 481/2019 in the auction proceedings conducted on behalf of respondent no. 1, accordingly, prayed for dismissal of SA.

23. On the other hand, Id. counsel for respondent no.

2 i.e. auction purchaser vehemently contended that the entire auction proceedings cannot be set aside on the ground that the cheque was given on behalf of auction purchaser towards the earnest money with the respondent no. 1 on 07.01.2019 and the same was taken back by the auction purchaser later on and the amount of earnest money was transferred by way of RIGS on 10.01.2019. It is further argued that as the auction purchaser was declared as highest bidder and giving the cheque was as good as RTGS or DD. In this regard, he has relied upon the judgments of Hon'ble Madras High Court in the case of Mohideen Bi and Ors. Vs. Khatoon Bi &Ors reported in 1965 (DLT SOFT) 1757; Judgement of Hon'ble High Court of Punjab & Haryana in the case titled as Karan Singh &Ors. Vs. Punjab & Sind Bank &Ors. reported in II(2003) BC 637; Judgement of Hon'ble Supreme Court of India in Civil Appeal No.

19 of 1953 in the case titled as The Commissioner of Income- Tax, Bombay South, Bombay Vs. Messrs. Ogale Glass Works Ltd., Ogale Wadi decided on 19.04.1954. Accordingly, prayed that the entire sale proceedings cannot be held illegal. Further, it is also argued that it could not be said that the applicant should not be declared successful bidder merely on the basis that earnest money has been deposited by way of cheque. The Ld. Counsel also relied on judgment of Hon'ble Bombay High Court in the case titled as Hotel Paras Garden &Anr. Vs. Central Bank of India &Ors. reported in III (2016) BC 47 (DB) (Bom.).

24. Further, it is also argued that auction proceedings cannot be set aside merely at the asking of the applicants herein unless there is substantive injury and fraud has been committed. It is also argued that applicants could not show anything on record that any substantial injury has been caused and prayed that fair auction proceedings were conducted and this auction purchaser has been rightly declared as successful bidder. He also argued that once Sale Certificate has been issued in favour of auction purchaser, the applicant herein had lost its right to redeem the property-in-question under Section 13(8) of SARFAESI Act. It is also argued that as per Section 13(8) of SARFAESI Act, the entire dues are to be paid before the date of publication of 1st auction notice. In the present matter, first auction was conducted on 26.05.2018 and subsequently on number of occasions, property-in-- question was put on auction, but the applicant herein failed to redeem the property-in-question, therefore, at the last juncture, when the Sale

21 of 46 Appeal Nos.451/2019 & 481/2019 Certificate has been issued in favour of auction purchaser, applicant herein cannot ask for redemption of the property-in-question.

25. Ld. counsel for auction purchaser further vehemently argued that valuation report of the property-in-question which has been placed on record by the applicant in SA, pertains to the Farm House which is though adjacent to the property-in-question, however, the property-in- question is lying in the Lal Dora, therefore, the property-in-question, which is in Lal Dora, cannot be compared with the 'Farm House' which falls in posh area, thus, the said Valuation Report cannot be considered for fixing the reserve price of the property-in-question. Accordingly, prayed for dismissal of the SA with costs, as there was no illegality or irregularity in conducting the sale proceedings.

26. In rebuttal, it is being argued on behalf of applicant herein that the property-in-question was worth more than Rs. 46.0 crore at the time of sanction of the loan in view of the arguments raised by Ld. counsel for respondent no. 1 because of the reason that the security cover might have been more than 200%, as the loan was sanctioned for Rs. 23.0 crore, therefore, worth of the property cannot be less than Rs. 46.0 crore. Apart that, it is also argued that the applicant is challenging the auction proceedings and not merely pressing, at this stage, merely right for redemption of the property-in-question. Further, it is also argued that the judgment relied upon by the respondent no. 1 are not relied upon and it should be considered in the ratio of the law laid down therein and the same cannot be made applicable to the facts and circumstances emerging therein. So far as, arguments addressed on behalf of the auction purchaser are with respect to commercial transaction and the mandatory procedure are to be followed by respondent no. 1 and auction purchaser was well aware about the fact that the auction proceedings are under challenge, therefore, he cannot be said to be 'bonafide purchaser'. Accordingly, prayed for acceptance of the SA.

27. In the present matter, the first and foremost contention of Ld. counsel for applicants is with respect to the valuation of the property-in- question. So far as, the valuation of the property-in-question is concerned, the applicant herein has claimed that the property-in- question was worth more than Rs. 118.0 crore. Applicant herein has relied upon the Sale Deed dated 14.11.2011 of adjacent property, which was sold for a sum of Rs. 84.0 crore, but it is apparently argued on behalf of respondent no. 1 that the said property is a Farm House whereas the present property is situated in Lal Dora village and to that

22 of 46 Appeal Nos.451/2019 & 481/2019 argument there is no answer to the Ld. counsel for applicant. No such site plan has been placed on record that the said area is quite adjacent and can be used for high rise buildings/towers. Even otherwise photograph placed on records it is apparent that the vicinity of the property in question, there is no high-rise buildings or towers are situated. Further, the burden to prove the said fact was upon the applicant as in Delhi, the location differs from place to place. Therefore, certainly valuation of the same should not be comparable to that of the open space, which is being used as Farm House and is situated in posh area, which have commercial output. Further, no doubt, the respondent no. 1 also relied upon certain Sale Deed by virtue of which the present applicant has purchased the said property in the year 2004-2014, but that valuation cannot be compared with the present valuation of the property-in-question because the same was executed much prior to the date of auction of the property-in-question i.e. 26.05.2018. Apparently, in the present matter, before proceeding for auction of the property-in-- question, the valuation report has been obtained from the Valuer by the respondent no. 1 and market value of the same was got assessed as Rs. 25.0 crore, accordingly, the same was put on auction for Rs. 25.03 crore as per Sale Notice dated 19.04.2018 with regard to auction scheduled to be held on 26.05.2018. Firstly, that one Sale Deed of area measuring 12,439 sq. yds. has been placed on record on behalf of applicant herein, and it cannot be a ground for assessing the valuation of the property-in- question, that too, when it is not situated adjacent to the property-in- question. Had it been so, the valuation of the property-in-question can be assessed on that basis. Further, on behalf of applicant, though the valuation report dated 11.04.2018 has been placed on record (at page

327 to 332 of earlier SA), however, as apparent from the said Report, area has been further assessed on the basis of Flat, which may be constructed over the property-in-question and the salable / super built up area has been shown as 1,89,276 sq. ft. and usable covered area of basement & stilt are given as 1,64,588 sq. ft. and the rate of Flat area has been assessed @ 10,500/- whereas the basement and stilt area has been assessed @ 6000/- and total FAR has been assessed to the tune of 175%. However, on behalf of applicant, no such report from the competent authorities has been placed on record, whether such like Flats can be raised in the said area, that too, when earlier the property was being used as factory premises, therefore, the said valuation apparently is extremely on higher side. In fact, the valuation of the property-in-question has to be assessed on the basis of that, if any, such like property is being used for the same purpose. Whereas, on behalf of respondent no. 1, the saleable area is assessed as 14,547 sq. ft. and total permissible area in sq. ft. has been assessed to the tune of

23 of 46 Appeal Nos.451/2019 & 481/2019 1,06,206 sq. ft. and that consists of four Floors i.e. Basement, Stilt, Ground and First Floor and the current market rate has been assessed as Rs. 25,000/- to 35,000/- per sq. yds and land rate is assessed to Rs. 31,000/- per sq. yds. Accordingly, total valuation of the same was assessed to Rs. 32,23,87,515/- and the forced value was assessed as Rs. 24,17,90,636/- and the property-in-question was put on auction for a sum of Rs. 25.03 crore. Further, the property-in-question has been put on auction 6-times till 19.12.2018 and the valuation was decreased, in the third auction, from Rs. 25.03 crore to Rs. 23.80 crore and thereafter reserve price was fixed for Rs. 22.0 crore at the time of fourth auction and at the time of 6' auction, the valuation of the property-in-question was decreased to Rs. 19.80 crore. Apparently, up-to those six consecutive auctions, no bidder turned up. Had, the valuation of the property-in-question would have been so less, as claimed by the applicant, certainly number of buyers would have turned up and participated in the said auctions for purchasing the property-in- question. But, six consecutive auctions were there, which all failed; which substantiate that the valuation of the property was not worth more than for which it was assessed by the valuation of the respondent Fl. Therefore, the valuation report as well as sale deeds submitted on behalf of applicant are not in accordance with the valuation of the property-in-question prevailing in the said area, accordingly, the same stand discarded. Hence, it is held that the reserve price of Rs. 25.03 crore was rightly fixed at the time of 1st auction, after assessing the market valuation to the tune of Rs. 32,23,87,515/- as per the valuation report. Hence, I do not find any force in the arguments laid down on the part of the applicant herein that the valuation of the property-in-question was fixed to a very lower side, accordingly, the same stands discarded.

28. Now, so far as, auction proceedings are concerned? In the present matter, however the auction which was conducted on 09.01.2019, in pursuance to the sale notice issued under Section 8(6) of Security Interest (Enforcement) Rules on behalf of respondent no. 1 on 19.12.2018 and the publication was done on 21.12.2018. Admittedly, the earnest money was not deposited on behalf of auction purchaser i.e. respondent no. 2, as per terms and conditions laid down in the auction notice since the earnest money was to be deposited by way of three modes i.e. by RIGS / NEFT / DD, but the auction purchaser had delivered a cheque to the respondent no. 1 on 07.01.2019, for participating in the auction held on 09.01.2019 and on the said date, it is being stated that as it was strike on 08.01.2019 & 09.01.2019, therefore, the amount could not be deposited, accordingly, 25% of the total auction price i.e. Rs. 19.85 crore was deposited by the auction purchaser on 10.01.2019

24 of 46 Appeal Nos.451/2019 & 481/2019 and the cheque was returned by the respondent no. 1 to the auction purchaser. Admittedly, 25% amount of the bid was transferred in the account of respondent no. 1 by the auction purchaser by virtue of RTGS on 10.01.2019, then, certainly, it raises eyebrows why the said amount was not deposited on 07.01.2019 by virtue of RIGS / NEFT / DD. If the 100/o of the earnest money was to be deposited by the auction purchaser through RIGS, then this process would also have been adopted on 07.01.2019. Instead of that, a cheque was merely given. No doubt, the payments through cheque is as good as by cash, but in the present matter, the cheque was returned and not and not encashed. Hence, it raises doubt, whether, it was actually given or not on the same date of receiving bids, as the same can also be taken or given later on. Further, there may be other bidders, who might have been interested in participating in the said auction by way of depositing of amount through cheque instead of RTGS or through DD, raising similar grounds that the banks were closed on said date. Hence it is as apparent fraud upon general public as the particular act has to be performed in the manner as stated as auction notice.

29. Now so far as question of deposit of balance 75% of the total bid amount is concerned? The same was to be deposited as per Rule 9 (4) of the Security Interest (Enforcement) Rules 2002 within 15-days from the date of auction, though, the same can be extended up to 90-days by way of an agreement entered into between the secured creditor as well as auction purchaser. By virtue of amendment in September 2016, the word borrower' has been deleted from that section, therefore, now only two parties are concerned i.e. 'secured creditor' as well as "auction purchaser", and the said period of depositing the remaining auction consideration can be stretched up to 90 days. In the present matter, apparently, the auction has been held on 09.01.2019 and the said remaining 75% amount was supposed to be deposited on or before 25.01.2019, however, by virtue of an application dated 22.01.2019, the auction purchaser sought 90-days' time, but the said period of 15-days was not enlarged till 25.01.2019 and the same was enlarged on 12.02.2019. Further, 60-days' time was given to the auction purchaser from the date of confirmation of sale, therefore, the said amount was supposed to be deposited on or before 09.03.2019, however, instead of depositing entire amount of Rs. 14,88,75,000/-, only a sum of Rs. 50.0 lac were deposited by the auction purchaser on 27.02.2019. Further, no such admittedly request was made on behalf of auction purchaser to extend the time and admittedly, no such agreement was ever executed between the parties till 30.03.2019. Though, on behalf of respondent no. 1, a letter was written by respondent no. 1 on 01.04.2019 to the auction

25 of 46 Appeal Nos.451/2019 & 481/2019 purchaser, wherein another time of 48-hours was being given to the auction purchaser for depositing the balance 75% of the bid amount.

30. In the said letter, it is being stated by respondent no. 1 Fl that on 08.03.2019, a letter was sent on behalf of auction purchaser, wherein auction purchaser insisted for issuance of sale certificate and registration of the same, accordingly, the respondent no.1 company was directed to deposit the said amount within 48 hours. In the meantime, with respect to the property-in-question, one SA (nil of 2019 titled as KU Resources Vs. Fullerton) was filed on behalf of KU Resources before DRT- I, Delhi. It is also an admitted fact that no interim relief was ever granted in the said matter and no order was passed in the said SA, whereby auction purchaser was ever restrained to deposit the balance amount. It is also stated in the said letter that though the auction purchaser took the plea that the aforesaid SA was pending before Ld. ORT-I, Delhi filed by KU Resources, but even then, the auction purchaser was advised by the authorized officer of respondent no. 1 to make the balance payment. No doubt, on behalf of respondent no. 1, one application being IA No. 359/2019 was moved, as reflected in order dated 30.03.2019 of Ld. DRT-I, Delhi, for seeking permission to confirm the Auction, but the permission of the Ld. Tribunal was only required, if any such restraint order would have been passed by the Ld. DRT-I. Unless, any such restraint was there, there was no logic to move the said application for taking permission to confirm the sale. Apparently, this application was filed by the respondent no. 1 in collusion with the respondent no.2 just to give an edge to the auction purchaser, as he failed to deposit the amount within the "extended agreed period of 60- days", retrospectively i.e. commencing from 09.01.2019 to 09.03.2019. On behalf of auction purchaser, only a sum of Rs. 50.0 lac has been deposited, as admitted in the letter dated 01.04.2019 of respondent no.

1 and till 30.03.2019, no such further payment was ever made. On behalf of respondent no. 1, at its own, a letter has been written on 01.04.2019, whereby another 48-hours have been given to the auction purchaser to deposit the said amount. Admittedly, the payment was made on 09.04.2019, but the same was also not deposited within the stipulated period of 48 hours, as per the letter dated 01.04.2019, rather, an e-mail dated 02.04.2019 was sent to the auction purchaser by the respondent no. 1 (RW-1/16), whereby request for extension for another period, till 09.04.2019, for making full & final sale consideration, and accordingly, the payment was deposited on 09.04.2019. These facts clearly that the specific and unwanted benefits were extended to the auction purchaser. Apparently, the auction purchaser again to failed to deposit remaining sale consideration on 02.04.2019 or 03.04.2019.

26 of 46 Appeal Nos.451/2019 & 481/2019 Admittedly, there was no written prior agreement between the secured creditor and auction purchaser qua extension of period till 09.04.2019. Though, it is being contended by Ld. counsel for respondent no. 1 as well as auction purchaser that time period is not sacrosanct as the provision under Rule 9(3) and 9(4) of Security Interest (Enforcement) Rules, 2002 are made for the benefit of secured creditor, therefore, the entire auction proceedings cannot be set aside on that ground and the secured creditor can waive the said period. In this regard, reliance has been placed by the respondent no. 1 in the case of Sri Siddeshwara Cooperative Bank Ltd. (supra) and also relied upon the judgment in the case of Rosali (supra), wherein it is laid down that incorporation of the statute should be in accordance with the intention of the legislature, which promise the object of the legislation. However, in the present matter, no doubt, the secured creditor can enlarge the period, but, all the rules & regulations qua auction cannot be put to air, because, firstly the auction purchaser failed to deposit the bid amount, as per clause mentioned in the public notice i.e. by virtue of RTGS / NEFT / DD and only a cheque was given by the auction purchaser. The said cheque was also got returned and the amount was not deposited through RTGS on 07.01.209 despite the fact that there was no strike on 07.01.2019 and it was a working day. Though, there was strike on 08.01.2019 & 09.01.2019 and the amount was deposited on 10.01.2019 by way of RTGS. Thereafter, the balance amount was to be deposited on or before 25.01.2019, but the same was not deposited on or before that day.

31. Though, an application was moved on behalf of auction purchaser for extension of time on 22.01.2019, but no such time was extended till 12.02.2019, therefore, it was not agreed between the secured creditor and the auction purchaser prior to 25.01.2019 for extension of time. Hence, period for depositing the amount was not extended prior to 25.01.2019 and it was extended only on 12.02.2019. Again, on behalf of auction purchaser, the amount was not deposited till 09.03.2019 i.e. extended period of 60-days counted from 09.01.2019 to 09.03.2019 and only a sum of Rs. 50.0 lac were deposited on 27.02.2019. Thereafter, no such application was moved on behalf of the auction purchaser for extension of time and the auction purchaser vide its letter dated 08.03.2019 was merely insisting the respondent no. 1 for issuance of sale certificate and registration of the same, but the amount was not deposited till 09.03.2019. Though S.A. no. Nil/2019 KU Resources Vs Fullerton was filed, but neither the respondent no. 1 nor the auction purchaser can take the plea that as the said litigation was pending before Ld. DRT-I, Delhi with respect to property-in-question, that is why, the auction purchaser could not deposit the remaining

27 of 46 Appeal Nos.451/2019 & 481/2019 amount, but as there was no such restraint order passed by Ld. DRT-I, Delhi with respect to auction proceedings, therefore, the auction purchaser was required to deposit the said amount, on or before 09.03.2019, which was never deposited. Even thereafter, respondent no.

1 written a letter dated 01.04.2019, i.e. after passing of order dated 30.03.2019 passed by Ld. DRT-I, Delhi in the SA filed on behalf of KU Resources, and 48-hours' time was also given by the respondent no. 1 to the auction purchaser to deposit the said amount, but even then the said amount was not deposited and the same was deposited only on 09.04.2019. One formal email was written on behalf of auction purchaser on 02.04.2019 for extending the said period from 02.04.2019 to 09.04.2019, and, admittedly, there was no prior agreement for enhancing the said period of 90-days and merely it was earlier agreed between the respondent no. 1 and the auction purchaser that the remaining amount of the bid shall be deposited on or before 09.03.2019, that too was also not executed prior to the date of expiry of the period for depositing the balance payment of 75%. Merely that Rule 9(3) and 9(4) of Security Interest (Enforcement) Rules, 2002 are made of benefit of borrower/mortgager and secured creditor, the same cannot be put on tenterhooks by the respondent no. 1 & auction purchaser. Respondent no. 1 was supposed to cancel the said auction proceedings and to forfeit the amount deposited by the auction purchaser, but instead of that the respondent no. 1 kept on enlarging the period at the mere whims & wishes of the auction purchaser without taking any conscious decision by the competent authorities of the respondent no.1 and the discretion by the secured creditor cannot be exercised by the respondent no. 1 at mere asking of the auction purchaser and that too in arbitrary and whimsically manner, and throwing all the mandate to wind, even though, it may be made for the Fl. The above said extensions were not granted to the auction purchaser for good reasons. Thus, the facts and circumstances emerged herein are totally different to that of the facts and circumstances of the citations referred on behalf of F.1 and auction purchaser, therefore, the same are not helpful to them. This Tribunal is of the affirm view that enlargement of the time period at the whims & wishes of the auction purchaser by the respondent no. 1 was absolutely illegal and malafide one, beyond the intentions of the Statute, as the auction dated 09.01.2019 is based on fraud from the very inception it, accordingly, the same cannot be sustained.

32. Now so far as, question of redemption is concerned, it is to be mentioned, in this context, that in the present matter, the first auction was conducted by the respondent no. 1 on 26.05.2018 with reserve price of Rs. 25.03 crore and thereafter auctions were held on 20.08.2018 (with

28 of 46 Appeal Nos.451/2019 & 481/2019 reserve price of Rs. 25.03 crore); on 12.09.2018 (with reserve price of Rs. 23.80 crore); on 29.09.2018 (with reserve price of 22.0 crore); on 20.10.2018 (with reserve price of Rs. 22.0 crore); on 09.01.2018 (with reserve price of 19.80 crore); but no request for redemption of the property-in-question was made by the applicant herein on or before 23.04.2018, in view of Section 13(8) of the SARFAESI Act, which is as under :-

13 (8) - Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public- or private treaty for transfer by way of lease, assignment or sale of the secured assets,

(i) the secured assets shall not be transferred by way of lease assignment or sale by the secured creditor; and

(ii) in case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this subsection, no further step shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets. 33.In view of the above said provision, 13(8), which is very well applicable in the given circumstances and as per the said provision, the applicant was entitled to redeem the property on or before the issuance of publication of notice for conducting first auction by respondent F.I. after making the payment of entire dues. In the present matter, the first auction has been conducted on 26.05.2018 by way of public auction as the publication of sale notice was issued & published on 19.04.2018 & 23.04.2018 respectively, therefore, the applicant was entitled to redeem on or before the said date. In this regard, reliance can be placed on judgment passed by Hon'ble DRAT in the case titled as Ram Murthy Pyara Lal &Ors. Vs. Central Bank of India &Ors. 2009 Online DRAT 53 (2010) 1 BC 85 (DRAT). Since, the applicant herein did not make any efforts to redeem the property-in-question, and the intention of the applicant herein is only to prolong the matter on one pretext or other and not to redeem the property fairly. Further, Hon'ble Supreme Court in the case titled as Dwarika Prasad Vs. State of Uttar Pradesh and Ors. reported in (2018) 5 Supreme Court Cases 491 has clearly laid down that "where the appellant fails to comply Section 13(8) of SARFAESI Act, the right to redemption stands extinguished". Hence, the applicants

29 of 46 Appeal Nos.451/2019 & 481/2019 herein, who failed to deposit the entire amount as per Section 13(8) of SARFAESI Act, on the day of 15t auction i.e. 19.04.2018, (as the same should have been done prior to 19.04.2018 i.e. the date of publication of notice for sale), his right to redeem also stands lost. Similar preposition has been laid down by Hon'ble DRAT, Delhi in Appeal Nos. 55/2018 (Allahabad Bank Vs. Gold Field Shiksha Sanstha &Ors.) & 58/2018 fShreeram Society of Real Education Vs. Gold Field Shiksha Sanstha &Ors). Hence, right to redeem the property-in-question of the applicant also stand extinguished and now, he is not entitled to redeem the property.

34. Further, so far as question of gap of period between notice issued under Section 8(6) and 9(1) is concerned? Though, there must be 30-days gap in both the notices. It is to be mentioned, in this context, that in the present matter first auction was fixed for 26.05.2018 and the same was widely published, apart from, giving a due notice to the applicant herein. Even thereafter, six-consecutive auctions were fixed, which have been failed. Due notice and publication were made with regard to the same, hence, the applicant was well aware of the fact that the property-in-question was being put on auction repeatedly. Therefore, at the juncture, applicant could not draw the benefit of the principle laid down in the order passed by Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in the case titled as Venshiv Pharma Chem (P) Ltd. and Ors. Vs. SBI &Ors. that there must be difference of 30-days between issuance of notice under Section 8(6) and 9(1). Moreover, the facts & circumstances of the same are different to the present case in hand, therefore, the said citation is not helpful to the applicant herein. Hence, the said contention also stands discarded.

35. Admittedly, in the present matter, the EMD i.e. 10% of the bid amount has to be deposited by way of three modes i.e. RIGS / NEFT / DD but the auction purchaser i.e. respondent no. 2 herein instead of making said payment in the modes prescribed in the auction notice dated 19.12.2018, has only deposited a cheque dated 07.01.2019. Though, it is contended on behalf of respondent no. 1 that the said cheque was paid on 07.01.2019, but once specific mode has been prescribed / mentioned for deposit of EMD, then certainly, the auction purchaser was required to make the payment through above said prescribed mode only, as the anti-dated cheque can be placed before the bank / Fl and the officer of the bank / Fl may colluded with the auction purchaser by saying that cheque of 07.01.2019 has been paid, that too, when the cheque has not been put for encashment on the same date i.e. on 07.01.2019, rather

30 of 46 Appeal Nos.451/2019 & 481/2019 the same was stated to be returned on 10.01.2019. In the present matter, reliance can be placed on judgment of Hon'ble Madras High Court in the case titled as Mrs. Lakshmi Mohan Vs. Mis Airtech Projects Engineers Pvt. Ltd, W.P.No. 24241 to 24244, 32610 and 32611 of 2012 decided on 22.05.2013 wherein, it is held that payment of 10% EMD, being mandatory condition and where the procedure has been laid down, the statutory authorities have to exercise its power in the manner prescribed or not at all and the statutory authorities cannot put all the constitutional obligations and statutory rules to the winds if any such act is being done of not following the statutory rules, the same would render the entire transaction illegal, even if irregularity supposes specific compliances to the rules. Therefore, in view of the principle laid down in the case of Mrs. Lakshmi Mohan (supra), the tender conditions was that the mode of payment of EMD i.e. 10% of bid amount was a mandatory condition to be done, thus, the payment was to be made in the said prescribed modes only. The entire conduct of the official of the respondent Fl is suspicious from the beginning till the deposit of remaining amount of auction consideration and the substantial compliance by way of deposit of cheque doesn't appeal to this Tribunal. In the given facts and circumstances the principle laid down in citation referred on behalf of applicant i.e. Ram Kishun and Others Vs State of Uttar Pradesh and others (2012) 11 SCC 511, "Banks cannot behave as property dealers. Sale cannot be affected in flagrant violation of statutory provisions. For conducting public auction sale every step envisage in law should be strictly adhered." State of Bihar &Anr. Vs JAC Saldanha (1980)1SCC 554, "When statue provides/prescribes for a thing to be done in a particular manner then it has to done in that manner and not other course is permissible." Mardia Chemicals Ltd &Ors. Vs. Union of India &Ors.,(2004) 4 Supreme Court Cases 311, "Creditors must act fairly and in good faith: Moolchand&Ors. Vs. Fatima Sultana Begum &Ors. (1995) 6 SCC 742 "It is the duty of a court to oversee the conduct of an appropriate sale. "Though the Id. Counsel for the auction purchaser relied upon citation ValjiKhimji& CO. Vs O.I. of Hindustan Nitroproduct Ltd. (2008) 9 SCC 299: and contended that unless substantial injuries caused, the auction cannot be set-aside. There is no doubt about principle laid down in above said citation, in the present matter the fraud was committed from its very inception, there is a patent illegality in the auction proceedings because of the reason that 'ineligible participant's offer' has been considered and accepted by the respondent no. 1. Due to clandestine acts of the respondents, the property apparently numbers of bidders could not participate thereby the property could not fetch better price, hence it could be said that substantial injury certainly caused to the applicant herein. Therefore, it

31 of 46 Appeal Nos.451/2019 & 481/2019 is the duty of the Tribunal to set the wrong right' once the procedure resulting the auction sale found to be vitiated on the above said grounds, as the apparent fraud has been there, accordingly, the sale in favour of the present auction purchaser i.e. respondent no. 2 is to be necessarily set- aside.

36. In sequel of above said discussions, this Tribunal is of affirm view that the valuation of the property-in-question was rightly done and the same has been put on auction for the first time for a sum of Rs. 25.03 crore, accordingly, there is no illegality or irregularity to that extent. Further, so far as, auction proceedings are concerned, the same are absolutely illegal and malafide, as the amount of 10% of the bid money was not deposited in view of the auction sale notice dated 19.12.2018 published on 21.12.2018 for the auction to be conducted on 09.01.2019 and thereafter, the extension of the time for deposit of the rest of the 75% amount was done without applying the mind by the respondent Fl and there was apparent collusion between the respondent FI as well as auction purchaser, as the time was extended retrospectively and there was no 'prior agreement' executed between both of them before the expiry of stipulated period, therefore, the entire auction proceedings stand vitiated, as the statutory rules as well as mandate of the auction notice has not been followed by either of the respondents. Accordingly, auction sale dated 09.01.2019 stands set-aside. However, the respondent no. 2 i.e. Auction Purchaser shall be entitled for refund of the entire amount because of the reason that the entire auction proceedings from very inception were void-ab-initio as the earnest money of 10% was not deposited in the manner which was required by virtue of auction sale notice dated 19.12.2018.

37. In view of above said findings recorded herein, the present securitization application stands allowed partly. Resultantly, the Sale Certificate issued in favour of auction purchaser i.e. respondent no. 2 stand cancelled. Respondent Fl shall be free to conduct the fresh auction qua the property in question as per rules. However, the , amount deposited by the auction purchaser shall be returnable by the respondent FI, only after expiry of the period of limitation for filing an appeal or in case of appeal as per order of Hon'ble higher authority. File be consigned to records.

32 of 46 Appeal Nos.451/2019 & 481/2019

5. This order of the learned DRT, with which the Financial Institution as well as the so called auction purchaser have felt aggrieved,has in very clear words held that the auction sale of the mortgaged property in question was a collusive and a shady transactionand not a public auction at all. The collusion was between the authorised officer of theFinancialInstitution and the so called auction purchaser.After carefully and minutely examining the material available on record I have also no hesitation in concurring with the final decision of the learned DRT quashing the auction sale. Though Honble Supreme Court had in two of its judgments reported as 2001(3) SCC 179 and AIR 1967 SC 1124 had held that if the appellate court is in general agreement with the decision of the trial court then elaborate discussion of evidence etc. need not be undertaken but still I am inclined to take some serious points of controversy for discussion and my independent decision.

6. After examining the matter in quite detail and considering the oral as well as written arguments of the parties and various judgments cited by their counsel at the time of oral argument I have no hesitation in concluding that the so called auction sale of the mortgaged property in question owned by respondents 2 9 herein was a farce and open fraud on the system in the matter of sale/disposal of public properties by a secured creditor.The authorised officer Mr. Bhupinder Tanwar had gone out of the way to confer huge financial benefit upon Mr. Pradeep Kumar Lathar, the so called auction purchaser, appellant of appeal no.481/2019.That is quite disturbing feature of the case but more disturbing is the decision of the Financial Institution in supporting the actions of its authorised officer instead of gracefully accepting the verdict of the learned DRT and prosecuting the authorised officer for

33 of 46 Appeal Nos.451/2019 & 481/2019 acting in blatant breach of mandatory provisions of law in transferring the mortgaged property in question in the name of Mr. Pradeep Kumar Latharhas filed this appeal through the same authorised officer who caused huge loss of public money and the borrowers counsel was right in submitting that the property in question had virtually been gifted by the authorised officer Mr. Bhupinder Tanwarto Mr. Pradeep Kumar Lathar, the so called auction purchaser and why that was done by the authorised officer can be anybodys guess.

7. First auction of the mortgaged was slated for 26 05.2018 with a reserve price of Rs. 25.03 crores. The Financial Institution has not placed on record any material to justify fixation of reserve price at Rs.25.03 crores when its value had been fixed by its valuer at 65 Crores at the time of sanction of loan as claimed by the borrowers and which claim of theirs has not been controverted by the Financial Institution. No person had come forward to buy the property at the time of first auction in 2018. It was then put up for fresh auction at the same reserve price for 20.08.2018 and again nobody came forward to buy the property. Third time the reserve price was reduced to Rs.23.80 crores for the auction to be held on 12.09.2018 but even then nobody showed any willingness to buy that property. Fourth time the date of auction was fixed for 29.09.2018 with a further reduced reserve price of Rs. 22 crores and that time also auction failed for want of bidders. For the fifth attempt the FI further reduced the reserve price to Rs.19.80 crores. The Financial Institution has not claimed that for the auctions prosed to be conducted after reducing the reserve price any fresh valuation reports were obtained from any approved valuer justifying the reduction in the reserve price and that too drastically within the span of one year. Just because nobody had been coming forward to participate in the

34 of 46 Appeal Nos.451/2019 & 481/2019 auctions the reserve price could not be reduced since the mortgaged property, which as noticed above had become socialist or State property, and the same had to be sold at the market price which the valuer of the Financial Institution itself had fixed at Rs. 25.03 crores in March, 2018. In case the authorised officer had gone to the approved valuer for fresh valuation report the valuer would have given some good reason to claim that the market price of the mortgaged property or properties in general in Delhi had come down drastically due to some natural calamity or for any other reason after March,2018 for which reasons reserve price needed to be scaled down. Regarding the justification for such a huge reduction in reserve price there was no explanation forthcoming during the course of arguments as well as in its written submissions from the side of Financial Institution. Even the learned counsel for the so-called auction purchaser did not come out with any justification for the reduction of the reserve price by the authorised officer of the appellant Financial Institution. Therefore, the Financial Institution and its Authorised Officer in the present case cannot be said to have acted fairly while putting the socialist property to auction at a reserve price of Rs.19.80 crores. In the whole bargain the authorised officer caused loss of about five crores to his employer, the Financial Institution and corresponding benefit to the so called purchaser of the mortgaged property in question.

8. The stand of the Financial Institution is that four times the mortgaged property was put up for auction but no buyer had come forward to buy the same and so auctions had failed four times and it was only on the fifth attempt that Mr. Pradeep Kumar Lathar, appellant in appeal no. 481/2019, had come forward to buy the property for Rs.19.85 crores and it was accordingly sold to him as there was no

35 of 46 Appeal Nos.451/2019 & 481/2019 other competitor in the race. In my view, however, the auction had failed even on the fifth attempt because none had come forward with EMDs till 5 p.m. on 07.01.2019, which was the last date of submissions of EMDs by the intending bidders. Even Mr. Pradeep Kumar Lathar in whose favour the authorised officer Mr. Bhupinder Tanwar had executed the sale certificate on 09.04.2019 had not tendered any EMD before 5 p.m. on the last date of submission of EMDs by the intending bidders.

9. Now comes the crucial question as to when no one had admittedly made any EMD by 5 p.m. on 07.01.2019, consequence of which was that it became a case of no show even for the fifth time, then how could the authorised officer Mr. Bhupinder Tanwar, whose own affidavit has been filed in support of this appeal, could claim that the property in question had been sold to Mr. Pradeep Kumar Lathar and there was no illegality whatsoever in his decision to execute the sale certificate in his favour.It was common case of the Financial Institution and the so called auction purchaser that on 07.01.2019, which was the last date of submission of EMDs by persons intending to participate in the E-auction on 09.01.2019 and EMDs could be submitted by 5 p.m. Incidentally, the DRT was on that date to hear an interim relief application of the borrowers moved in their S.A., out of which these appeals have arisen,. The borrowers, respondents 2 to 9 herein, were seeking stay of the auction to be held on 09.01.2019. It was the case of the so-called successful auction purchaser that though he was interested to participate in the auction but since DRT was hearing application for interim stay of auction on 07.01.2019 he wanted to see the result of that stay application. It was his further case that the DRT hearing the arguments pronounced its order after 4 p.m.(as per

36 of 46 Appeal Nos.451/2019 & 481/2019 the case of the borrowers pleaded in the S.A. order was pronounced by the DRT at about 6 p.m.), and refused to stay the auction but by that time the time for submission of EMDs was already over and his bank had also closed for the day. He then approached the authorised officer with a request letter addressed to authorisedofficer to permit him to participate in the auction to be conducted on 09.01.2019. His request came to be accepted and since EMD had also to be made for becoming eligible to participate in the auction he also requested the bank official(authorised officer) to take a cheque of two crores from him towards EMD and the bank official(his name not disclosed but obviously he could be referring to authorised officer only) took the cheque from him on the assurance that on 08.01.2019 the cheque will be taken back and replaced with a demand draft(as was the term in the sale proclamation). Mr. Lathar further pleaded before the DRT that it so happened that on 08.01.2019 and 09.01.2019 banks were closed due to general strike of bank employees and so he could not get the demand draft prepared and delivered to the authorised officer on 08.01.2019 as was promised by him on 07.01.2019. However, the authorised officer declared Mr. Pradeep Kumar Lathar as the successful bidder even though as per the case of the financial institution itself there was no bidding on 09.01.2019 as Mr. Pradeep Kumar Lathar was the only participant in the auction proceedings. The submission of Mr. Pallav Saxena, learned counsel for the borrowers was that this story of Mr. Lathar supported by the authorised officer was nothing but a cock and bull story not worth acceptance even on the scale of probabilities. He elaborated that when the DRT had pronounced its order on the borrowers stay application at about 6 p.m. Mr.Lathar could not have approached any bank official since no bank remains open at 6 p.m. Yes the only possibility could be that Mr. Lathar approached the authorised

37 of 46 Appeal Nos.451/2019 & 481/2019 officer at his residence and tendered to him a letter alongwith a cheque of Rs. two crores requesting him to accept that cheque as EMD so that he could participate in the auction on 09.01.2019. The authorised officer Mr. Bhupinder Tanwar gladly got persuaded and permitted Mr. Lathar to participate in the auction but Mr. Lathar was told to replace that cheque with a demand draft next day. As was represented by him in his request letter. I am inclined to accept these submissions of Mr. Pallav Saxena in the favts and circumstances. Why the authorised officer Mr. Bhupinder Tanwar obliged Mr. Lathar on 07.01.2019 by accepting the cheque when in the sale proclamation he himself had mentioned that the EMD could be made by NEFT/DD/RTGS. Whether Mr. Tanwar accepted the cheque in bank premises or at his residence after office hours he committed grave illegality in entertaining the impermissible request of Mr. Latharand it can be inferred safely that he did it for some extraneous consideration otherwise he could have straightaway turned away Mr. Lathar telling him that since nobody had come forward with EMD by 5 p.m. that day the auction fixed for 09.01.2019 stood failed like the earlier four auctions and he could try his luck in the sixth auction.The position of Mr. Lathar was that of a passenger who is to fly but by the time he reaches airport the door of the aircraft has been closed and normally no crew member will re-open the door of the aircraft for one passenger who reports late for the flight. So, in the facts and circumstances of the present cast Mr. Lathar was quite late and the doors of the aircraft which he wanted to board had already closed and no way he could enter the aircraft and that too without a valid ticket(DD for the amount of EMD). Having missed the bus for 09.01.2019 the only option available to him was to wait for the next auction. Mr. Saxena was also right in submitting that if at all Mr. Lathar was a person genuinely wanting to buy the property in question

38 of 46 Appeal Nos.451/2019 & 481/2019 he would have kept the EMD ready and decision of the DRT on the interim relief application of the borrowers had nothing to do with his decision to participate in the auction to be held on 09.01.2019. If the DRT had stayed the auction on 07.01.2019 he would have got back EMD money.

10. As noticed earlier, the appeal of FI was accompanied by the affidavit of Mr. Bhupinder Tanwar. He knewwhat was being alleged against him by the borrowers and what had b quite lateeen observed by the learned Presiding Officer of DRT in the impugned order regarding collusion/fraud in the conduct of the auction. So, he could have very well said something in his defence to establish that he had not done anything wrong in breaking the Rules governing the conduct of auction of public properties under SARFAESI Act. He has brazenly tried to defend his actions on grounds which are totally contrary to well settled legal position regarding sale of public properties and his actions do not pass the smell test also which any public authority has to pass whenever its decisions are being challenged in a Court of law being collusive and a result of fraud etc. on the system.

11. It is well settled that if a public authority like authorised officers of banks/financial institutions do something in blatant violation of legal provisions they are obliged to justify their decisions/actions failing which and adverse inference can be drawn that the impugned decisions were taken with dishonest motives or for extraneous considerations.

12. I am also of the view that even if the aspect of absence of valuation reports and non explanation for reducing the reserve price from R. 25.03 crores to Rs. 19.80 crores were to be ignored the sale in

39 of 46 Appeal Nos.451/2019 & 481/2019 favour of Mr. Pradeep Kumar Lathan even then cannot be sustained. It has to go. The authorised officer himself included a clause in the sale notice that EMD had to be made by DD/NEFT/RTGS. Totally ignoring that term in the sale proclamation the authorised officer Mr. Bhupinder Tanwar accepted EMD by way of cheque. That certainly was not a valid tender of EMD nor the authorised officer should have accepted the cheque. He had no such discretion. The argument of the learned counsel for the Financial Institution and so called auction purchaser that the authorised officer cold waive the requirement of deposit of EMD by DD etc. and he could very well accept the cheque is totally meritless and cannot be accepted. In the sale proclamation it was not mentioned for the information of general public that the authorised office could accept EMD payment by cheques also for ant exceptional reason. So Mr. Tanwar in the present case could not have changed the rules of the game once the game had started just to favour/oblige one person namely, Mr. Pradeep Kumar Lathar. At every stage the authorised officer wanted to help Mr. Lathar. In these circumstances the allegations of collusion between the two and acceptance of those allegations by the DRT were well founded and there is no scope of any interference by this Tribunal.

13. Some judgments were cited on behalf of appellant Mr.Pradeep Kumar Lathar in support of the submission by his learned counsel that payment of EMD by cheque could not be faulted with. However, that submission is liable to rejected in view of the categorical view to the contrary taken by the Honble Supreme Court in a judgment reported as 1995 AIR SC 2195,/1995 SCC Supl. (4) 275. I am reproducing below in extenso paras from this judgment:-

40 of 46 Appeal Nos.451/2019 & 481/2019

3. The short question that arises for our consideration in this appeal is whether the payment of one fourth of the amount of auction-sale by cheque is a valid tender within the meaning of Rule 285-D of U.P. Zamindari Abolition and Land Reforms Rules, 1952.

4. The facts in brief leading to the filing of this appeal may be stated thus :The deceased respondent No. 1 Rao Mahmood Ahmad Khan being the defaulter of Government dues to the extent of Rs. 23026.37 paise was proceeded against for recovery of the said amount as arrears of land revenue and in pursuance of recovery proceedings the Collector, Saharanpur on 15.11.1986 attached his agricultural land bearing Khasra No. 162, Mohalla Ismail Khan, Khewat No. 1/2 situated in Village Palhanpur, Tehsil & District Saharanpur. The said land was put to auction sale on 18.10.1973. Raghubir Singh, the respondent No. 1 herein was one of the bidders and his bid being highest for Rs. 31500/-, it was knocked down in his favour. The Sale Officer taking the bid made by respondent No. 1 to be adequate and reasonable accepted the same and directed the respondent No. 1 to deposit 25 per cent of the bid amount at once and the balance of the sale amount within IS days by his order dated 18.10.1973. The respondent No. 1, auction purchaser depos- ited a sum of Rs. 8000/- by means of a cheque dated 18.10.1973 which was encashed and accounted for in Tehsil account on 22.10.1973 and the balance of the bid amount Rs. 23500/- was deposited in cash on 30.10.1973 well within the time stipulated by Rule 285-E of the said rules. The deceased Rao Mahmood Ahmad Khan filed an objection on 17.11.1973 for setting aside the auction sale, inter-alia on the grounds that 1/4th of the bid amount was not deposited as required by law and that the auction was fictitious and collusive, for the reason that the very same property when put to auction, earlier in 1969 the highest bid offer was Rs. 50,000/ but same was rejected by the sale officer Saharanpur on the ground that the bid money was inadequate as compared to the value of the property whereas the subsequent auction sale held on 18.10.1973 could fetch only Rs. 31500/- as the highest price which was accepted to be adequate price in collusion of the Tehsil authorities with the auction purchaser respondent No. 11herein.

5. The aforesaid objection filed by deceased Rao Mahmood Ahmad Khan was rejected and the sale held on 18.10.1973 in favour of Ranbir Singh, respondent No.

1 was confirmed by the Collector by his order dated 9.5.1974. The revision filed against the said order was recommended by the Commissioner, Meerut Division, Meerut to the Board of Revenue for dismissal but the Board of Revenue by its order dated 31.5.1977 remanded the case back to the Commissioner for deciding the revision himself On remand the Com- missioner, Meerut dismissed the revision on merits by his order dated 25.5.1978. The Commissioner took the view that no material irregularity was committed in the conduct of auction sale nor it was proved that the deceased Rao Mahmood Ahmad Khan had suffered any substantial injury by reason of any of the alleged irregularities or mistakes. The said order of the Commissioner dated 25.5.1978 was, however, set aside by the Board of Revenue in revision by order dated 12.4.1985 on the ground that the deposit of 1/4th of the bid money by means of cheque was not a valid deposit

41 of 46 Appeal Nos.451/2019 & 481/2019 within the meaning of Rule 285-D of the rules and the auction sale was therefore void. The said decision of the Board of Revenue was challenged by Shri Ranbir Singh, auction purchaser, respondent No. 1 herein before the High Court of Allahabad in Civil Miscellaneous Writ Petition No. 9589/1985 under Article 226 of the Constitution of India. The High Court by the impugned judgment dated 22.1.1992 allowed the writ petition filed by respondent No. 1, by setting aside the aforesaid order of the Board of Revenue dated 12.4.1985 by holding that the confirmation of the auction sale in favour of respondent No. 1 was valid as the deposit of 25 per cent of the bid amount by cheque was a valid deposit for the purposes of Rule 285-D of the rules. It is this decision of the High Court which has been challenged by the appellants in this appeal who are the legal representatives of deceased Rao Mahmood Ahmad Khan.

6. Learned counsel for the appellants urged that the provisions contained in Rule 285-D of the U.P. Zamindari Abolition and Land Reforms Rules, 1952 (hereinafter referred to as the Rules) are mandatory and have to be strictly applied in so far as the requirement of deposit of 25 per cent of the amount of bid immediately after the declaration of the person to be the purchaser of the property is concerned and on his failure to do so the sale becomes a nullity. He submitted that in the present case the sale was knocked down in favour of the respondent No. 1 on 18.10.1973 and, therefore, it was obligatory on him to deposit 25 per cent of the bid amount immediately on 18.10.1973 itself but he did not do so. On the contrary the respondent No. 1 is said to have delivered a cheque of 25 per cent of the purchase money on 18.10.1973 which is said to have been encashed on 22.10.1973 which under the provisions of Rule 285-D could not be said to be a valid deposit. The learned counsel for the appellants, therefore, strenuously urged that the High Court had fallen in grave error of law in accepting the deposit of 25 per cent of the bid amount by cheque as a 'valid deposit by taking a view contrary to a Division Bench decision of the Allahabad High Court rendered in Hira Lal v. Mst. Champa [ A.I.R 1955 Allahabad 226]. It was, therefore, submitted that the impugned judgment/order of the High Court of Allahabad is contrary to the mandatory rule and deserves to be set aside.

7. With a view to appreciate the submissions made by the learned counsel for the appellants it would -be appropriate- at this stage to examine the relevant provisions of the rules in question. For the purposes of disposal of this appeal, Rules 285-D, 285-E, 285-F and 285-G are the relevant rules which are reproduced for ready reference hereunder 285-D. The person declared to be the purchaser shall be required to deposit immediately twenty five per cent of the amount of his bid, and in default of such deposit the land shall forthwith be again put up and sold and such person shall be liable for the expenses attending the first sale and any deficiency of price which may occur on the re- sale which may be recovered from him by the Collector as if same were an arrear of land revenue.

9. A perusal of the language employed in Rule 285-D would go to show that it requires the person declared to bepurchaser to deposit immediately 25 per cent of the amount of his bid, and in default of such deposit the property shall be resold

42 of 46 Appeal Nos.451/2019 & 481/2019 forthwith and such person who failed to deposit 25 per cent of the bid amount shall be liable for the expenses incurred in the first sale and the deficiency of price, if any, which may occur on the re-sale would be recovered from such defaulting purchaser as arrears of land revenue. The use of the word 'immediately' in depositing 25 per cent of the bid amount and the expression re-sale of the property 'forthwith' are equally meaningful and significant. Strictly speaking the requirement of deposit of 25 per cent immediately, by the person declared to be the purchaser may not mean the deposit on fall of hammer within twinkle of an eye and without affording the -purchaser even the reasonable time to enable him to make the deposit. According to us the word 'immediately' connotes and implies that the deposit should be made without undue delay and within such convenient time as is reasonably requisite for doing the thing same day with all convenient speed excluding the possibility of rendering the other associated corresponding act and performance of duty as nugatory. Here the other associated corresponding act and duty cast upon the officer/authority conducting the sale as envisaged by Rule 285-D is to put up the property for re-sale 'forthwith' on the failure of the declared purchaser to deposit 25 per cent of the bid amount. The word "immediately" therefore, connotes proximity in time to comply and proximity in taking steps to re-sell on failure to comply the requirement of deposit as first condition that is to take place within relatively short-interval of time and without any other intervening recurrence. But it has to be noted that the meaning of the word immediately has to, be determined by the context in which it has been used and the purpose for which the statute using the word was enacted. That being so it goes without saying that in the instant case the rule casts an obligation on the purchaser to deposit 25 per cent of the bid amount immediately and if he fails to do so the property shall be re-sold forthwith.

10. Further the Rule 285-D provides resale of the property forthwith on the failure of the purchaser to deposit 25 per cent of the bid amount. The meaning of the word 'forthwith' is synonymous of the word immediately which means with all reasonable quickness and within a reasonably prompt time. It, therefore, necessarily follows that the intention of the Legislature is that as soon as it becomes known that the purchaser has failed to deposit 25 per cent immediately after he is declared as purchaser, the property shall be put to re-sale forthwith without any loss of time or postponement of the date of re-sale. The provision has been made mandatory because if the property is not re- sold forthwith and on the same day but later on after a day or two, the sufficient number of purchasers may not be forthcoming and the property may not fetch adequate and fair price to the prejudice of the judgment debtor. There is yet another reason for making this provision mandatory and it is this that if on the failure of the purchaser to deposit

25 per cent of the bid amount immediately and on the day the person is declared to be purchaser then the sale of the property will have to be postponed to some other date and according to the provisions contained in Rule 25-G re- produced in para 6 above, no sale after the postponement under Rule 285-D in default of payment of the purchase money shall be made until a fresh proclamation has been issued as prescribed for the original sale. it is to avoid this situation and the

43 of 46 Appeal Nos.451/2019 & 481/2019 delay in the sale that a provision under Rule 285-D has been made mandatory and on the failure of compliance of the same the sale becomes a nullity. 11.The controversy whether the provisions of Order 21, Rule 84, 85 and 86 are mandatory or not has been set at rest by this Court. The provisions of Order. Rule 84, 85 and 86 of the Code of Civil Procedure, as said earlier, are almost similar in terms to the provisions contained in Rule 285-D and 285-E of the Land Re-form Rules. This court in the case of Mani Lal Mohan Lal v. Syed Ahmad A.I.R. 1954 S.C.

349 ruled as under:- "Having examined the language of the relevant rules and the judicial decisions bearing upon the subject we are of the opinion that the provisions of the rules requiring the deposit of 25 per cent of the purchase money immediately on the person being declared as a purchaser and the payment of the balance within 15 days of the sale are mandatory and upon non-compliance with these provisions there is no sale at all. The rules do not contemplate that there can be any sale in favour of a purchaser without depositing 25 per cent of the purchase money in the first instance and the balance within 15 days. When there is no sale within the contemplation of these rules, there can be no question of material irregularity in the conduct of the sale. Non-payment of the price on the part of the defaulting purchaser renders the sale proceedings as a complete nullity. The very fact that the Court is bound to re-sell the property in the event of a default shows that the previous proceedings for sale are completely wiped out as if they do not exist in the eye of law. We hold, therefore, that in the circumstances was no sale and of the present case there was no sale and the purchasers acquired no rights at all." 12, Thus, it is settled law that the Provisions of Order 21, Rule 84, 85 and 86 of the Code of Civil Procedure are mandatory and the provisions of Rules 285- D and 285- E being similar in terms of the aforementioned corresponding provisions of the Code of Civil Procedure and in view of the aforesaid discussion there is no escape from declaring the sale a nullity if Rule 285-D is not complied with.

13. The question now remains to be considered is whether the deposit of 25 per cent of the bid amount by the purchaser respondent No. 1 herein by cheque instead of cash would be a valid deposit within the meaning of Rule 285-D of the Rules. Admittedly the respondent No. 1 was declared purchaser of the property in question on 18.10.1973. According to the learned counsel for the appellants neither the deposit of 25 per cent of the bid amount was made in cash nor by cheque on 18.10.1973 as the cheque was encashed on 22.10.1973. While according to the learned counsel appearing for the auction purchaser respondent No. 1 the cheque was tendered on 18.10.1973 itself which was encashed on 22.10.1973 and the amount was deposited in the Government treasury on 22.10.1973. The question is whether such a payment by cheque could be regarded as a valid deposit within the, meaning of Rule 285-D. As discussed above Rule 285- D is a mandatory rule according to which if 25 per cent of the bid amount is not deposited immediately the land shall forthwith be again put up and sold. In other words on the failure of the purchaser to deposit 25 per cent of the bid amount immediately the land shall be re- sold immediately the land shall be re- sold

44 of 46 Appeal Nos.451/2019 & 481/2019 immediatety after such failure the very same day. If for instance the 25 per cent of the bid amount is accepted by cheque and subsequently the purchaser changes his mind and advises his banker not to encash the cheque or there is no amount in the account of the purchaser in the bank and the cheque is bounced, the purpose of Rule285-D would be frustrated and thus the mandatory provision would be rendered nugatory. The result would be that neither the authorities would be in a position to forfeit any amount of the purchaser nor the authority would be in a position to defray the expenses of the sale as contemplated by Rule 285- E. The other consequence that will follow is that the re- sale of land will have to be delayed and a fresh proclamation for sale has to be issued as provided by Rule 285-G. It, therefore, appears to us that Rule 285-D does not contemplate any payment by cheque but a cash deposit of 25 per cent of the bid amount has to be made in accordance with the requirement of the rule, otherwise the very purpose of the mandatory rule 285-D would be frustrated and rendered nugatory. In these facts and circumstances we are of the view that deposit of 25 per cent of the bid amount by cheque will not be a valid tender within the meaning of the rule. This was also the view taken by a Division Bench of the Allahabad High Court in the case of Hira Lal (supra) and the Learned Single Judge was not right in ignoring the said view by observing that it was obiter. The High Court of Madhya Pradesh in MI s. Progressive Industrial Enterprises, Indore v. Bank Of Baroda - A.I.R. 1989 M.P. 177 also expressed the view that deposit of 25 per cent of the bid amount by cheque which was not encashed on the date on which the person was declared purchaser but on a later date, there was no compliance of Order 21 Rule 84 (C) C.P.C. 14.The learned counsel for the auction purchaser, respondent No. 1 placing his reliance on Kirloskar Bros. Ltd. v. LT. Commissioner - A.I.R. 1952 Bombay 306; A.I.R 1954 S.C. 429 - LT. Commissioner v. M/s. Ogale Glass Work Limited;; A.I.R.1966 Madras 435 - Mohidden Bi v. Khatoon Bi and some other decisions vehemently urged that deposit of 25 per cent of the bid amount made by cheque was a valid deposit and in compliance of Rule 285-D. We have carefully gone through the decisions relied on by the learned counsel for the respondent No. land find that the same do not relate to the consideration of the provisions of Rule 285-D or any other provision which may be regarded as pari-materia to Rule 285- D. The said decisions do not cover the situation at all with which we are concerned in the present appeal and the same are quite distinguishable on facts a.-, well as on law. The said decisions are, therefore, not helpful in the present case. 15.In the facts and circumstances discussed above the impugned order of the High Court could not be sustained. The appeal is therefore allowed, The impugned order of the High Court dated 2.1.1992 passed in C.M.W.P. No. 9589 of 1985 is set aside and the sale is declared as nullity. The parties are left to -bear their respective costs.

14. Normally an argument is advanced in such like situations on behalf of auction purchasers in trouble that what is their fault if the

45 of 46 Appeal Nos.451/2019 & 481/2019 authorised officer of a bank or FI entertains them and takes some decisions, like in the present case Mr. Tanwar accepted the EMD by cheque after the time for acceptance of EMDs was over. Same arguments were raised by the learned counsel for the so called auction purchaser in the present case also. Counsel submitted that Mr. Pradeep Kumar Lathar had approached the authorised officer Mr. Tanwar after banking hours on 07.01.2019 with a cheque of Rs. two crores which he gladly accepted and permitted him to participate in the auction which this appellant did and being the only participant was declared as successful bidder by the authorised officer Mr. Tanwar. In these circumstances Mr. Lathar can be said to be a bona fide purchaser who has to be protected. despite the fact that the authorised officer Mr. Tanwar had even returned that cheque also and had permitted him to take part in the auction without EMD. Counsel submitted that if somebody has to be blamed for the situation in which the auction has come under cloud it is the authorised officer only who can be said to be the wrongdoer. In support of this argument of this appellant being a bona fide purchaser his earned counsel cited one judgment of the Honble Supreme Court wherein it was held that rights of a successful auction purchaser have to be protected when it is a case of court auction, in execution of decree even if the decree is eventually set aside. This submission would have been worth consideration had it not been concluded by this Tribunal as also by the DRT that this is a clear case of fraud and collusion between the authorised officer of the Financial Institution and the purchaser(Mr. Lathar) who managed to secure entry into the scene through back door whose lock was opened by Mr Tanwar. How could he enter into the computer system to oblige Mr. Lathar Mr. Tanwar only could reveal which he has not done. If such like persons are to be protected by Courts/Tribunals public exchequer

46 of 46 Appeal Nos.451/2019 & 481/2019 will only be the casualty and beneficiaries will be people like Mr. Tanwar and Mr. Lathar.

15. These two appeals thus being without any merits are dismissed but it will not be a simple dismissal. Mr. Pradeep Kumar Lathar having obtained the possession of the property in question in collusion with the authorised officer Mr. Tanwar the amount of Rs.4,96,25, 000/- which was paid on 10.01.2019 will stand forfeited in favour of the Financial Institution. Rest of the money paid by Mr. Lathar to the Financial Institution will be returned to him but provided he surrenders back possession of the property in question within two weeks failing which the money will continue to remain with the Financial Institution till it gets back possession for the putting the property to auction again. After the expiry of fifteen days period the Financial Institution will be at liberty, while retaining the auction money till of course return of possession by Mr. Lathar, to have recourse to appropriate remedies available to it in law to get back the possession of its secured asset. At the same time it will be for the higher ups in the Financial Institution to take suitable action against its authorised officer in view of the adverse observations made against him by the learned DRT as well as by this Tribunal. The higher ups will do well in forwarding copy of the order of DRT and this Tribunal to vigilance authorities for in depth investigation. Copy of this order be given to parties as per the Rules and one copy shall be sent to DRT by email also. May 17,2021 (CHAIRPERSON)