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Esjaypee Impex Priva... v. Asst. General Manage...

Supreme Court Of India

Sep 11, 2020

Judgment

CaseIQ

Smart Summary (Beta)

Factual and Procedural Background

The order concerns pending petitions connected to an earlier Supreme Court order dated 18-08-2020 in SLP(C) No. 24164 of 2019, which required repayment/deposit of money involving an auction purchaser. The petitioners sought additional time to arrange and deposit the amount required under the 18-08-2020 order.

The auction purchaser stated he would adhere to his offer of 18-08-2020, and would “walk out” provided repayment is made in terms of that order. The auction purchaser also asserted that although possession had been handed over pursuant to a letter dated 06-11-2019 (Annexure R-1/4), the back portion of the property was being used to store the original owners’ goods as recorded in Annexure R-1/5 dated 06-11-2019, affecting full enjoyment. The Court took this aspect on record, noting that the bank had deputed a security person to look after those goods.

Legal Issues Presented

Whether the petitioners should be granted further time to deposit the amount payable in terms of the order dated 18-08-2020 in SLP(C) No. 24164 of 2019, and on what deadline.
What interest rate should apply to the amount deposited by the auction purchaser pursuant to the direction in the impugned order (excluding the initial sum of Rs. 5,00,00,000/-), and for what period.
What consequential directions should follow regarding release of funds, dismissal upon default, and removal of stored goods from the back portion of the property.

Arguments of the Parties

Petitioners' Arguments

Given the situation, they sought time to arrange funds and requested two months’ time to comply with the order dated 18-08-2020 in SLP(C) No. 24164 of 2019.

Auction Purchaser's Arguments

He was not resiling from his offer of 18-08-2020, but was willing to exit provided the money is repaid in terms of that order.
Although possession was handed over pursuant to a letter dated 06-11-2019 (Annexure R-1/4), the back portion was used to store the original owners’ goods (Annexure R-1/5 dated 06-11-2019), preventing full enjoyment of the property.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court recorded the petitioners’ request for additional time and the auction purchaser’s position that he would accept repayment in terms of the prior order. It also took on record the factual assertion that stored goods in the back portion impeded full enjoyment of the property, noting the stated arrangement that a bank-appointed security person was looking after those goods.

The Court granted the petitioners a “last opportunity” to deposit the amount required under the order dated 18-08-2020. In addition, the Court determined it appropriate to fix the interest payable on the amount deposited by the auction purchaser pursuant to the direction in the impugned order, expressly excluding interest on the initial amount of Rs. 5,00,00,000/-.

The interest was quantified at 9% per annum simple interest, calculated from the date of the auction purchaser’s deposit to the date of the petitioners’ deposit before the Court. The Court then structured the consequences: timely deposit would lead to release of funds to the auction purchaser; failure to deposit by the specified date would result in dismissal of the petitions as nothing would survive.

Finally, anticipating the contingency of petitioners’ default (in which case the auction purchaser would continue to enjoy the property), the Court clarified that one week’s time would be granted to remove items stored in the back portion.

Holding and Implications

LAST OPPORTUNITY GRANTED; TIME-BOUND DEPOSIT ORDERED WITH CONDITIONAL DISMISSAL UPON DEFAULT.

The petitioners were directed to deposit the amount in terms of the order dated 18-08-2020 in SLP(C) No. 24164 of 2019 on or before 16-11-2020 in the Court.
Upon such deposit, the amount would be released to the auction purchaser.
If the amount was not deposited by that date, the petitions would stand dismissed because “nothing would survive.”
Interest was fixed at 9% per annum simple interest on the amount deposited by the auction purchaser pursuant to the impugned order’s direction (but not on the initial Rs. 5,00,00,000/-), for the period from the auction purchaser’s deposit date to the petitioners’ deposit date.
The matter was directed to be listed on 20-11-2020.
In the event of default by the petitioners (and consequent continued enjoyment by the auction purchaser), one week’s time would be granted to remove goods stored in the back portion.
The order, as provided, does not indicate any broader legal implication beyond these case-specific directions and does not set out any new precedent.

Show all summary ...

1. Learned senior counsel for the petitioners submits that in view of the given situation, they be given some time to come up with the money in terms of the order dated 18-8-2020 SLP(C) No. 24164 of 2019 and pray for two months' time.

2. On the other hand, learned senior counsel for the auction purchaser submits that he is not going back on his offer of 18 August, 2020 but he is willing to walk out as long as the money is re-paid in terms of that order. He further submits that though possession was handed over to him in pursuance to a letter dated 6 November, 2019 (Annexure R-1/4 at page 15 of the additional documents), the backside portion is used to store the goods of the original owners as recorded in Annexure R-1/5 dated 6 November, 2019 (at page 16) and thus, prevents full enjoyment of the property. We take this aspect on record as it is stated that the bank has deputed a security person to look after those goods.

3. We grant a last opportunity to the petitioners to deposit the amount in terms of the order dated 18-8-2020 SLP(C) No. 24164 of 2019. We also consider it appropriate to fix the interest rate which would be payable on the amount deposited by the auction purchaser in pursuance to the direction in the impugned order but not on the initial amount of Rs. 5,00,00,000/- (Rupees five crores). The interest rate is quantified at 9% per annum simple interest from the date of deposit by the auction purchaser to the date of deposit by the petitioner before this Court.

4. Let the petitioners deposit the amount on or before 16 November, 2020 in this Court. On such deposit, the amount will be released to the auction purchaser. Needless to say if the amount is not so deposited, nothing would survive in the present petitions which will stand dismissed.

5. List on 20 November, 2020.

6. We also make it clear that one week's time will be granted to remove what has been stored in the back portion in case the auction purchaser has to continue to enjoy the property in case of default by the petitioner.