Ranjit Singh, Chairperson
1. Mr. Hashmat Nabi, Counsel for the Appellants
2. Since I have heard the Counsel and I have considered the pleas raised in the Appeals on merit, the prayer in the applications filed for seeking condonation of delay in filing and re-filing the Appeals are ignored.
3. As the property has been sold and a substantial amount has been recovered, the applications for seeking waiver of the requirement of pre-deposit to maintain these Appeals may not have much significance. The waiver applications are accordingly closed.
4. A property measuring 188.33 acres at Industrial Area, Masurie Gulawati Road, Hapur, Ghaziabad was put to public sale pursuant to the R.C. No. 45/2014 issued for recovery of Rs. 51,34,74,787.60 and R.C. No. No. 49/2014 issued for recovery of a sum of Rs. 2,79,27,317, along with interest.
5. Recovery Officer had taken action to put the mortgaged property to sale by way of auction where KJS Concrete Pvt. Ltd. has purchased the property.
6. Objections were filed against the auction sale by the Appellant borrowers as well as Uttar Pradesh State Industrial Development Corporation (UPSIDC) (Respondent No.2). The Recovery Officer though had dismissed the objections so filed by UPSIDC and the borrowers, but, while considering the issue of confirmation of sale, found certain infirmities in the manner of conducting auction and had set aside the sale in favour of the auction purchaser. Aggrieved against the same, the Respondent Oriental Bank of Commerce (CH) (Respondent No. 1) and the auction purchaser KJS Concrete Pvt. Ltd. (Respondent No. 3) filed separate Appeals before the Tribunal below to challenge the order passed by the Recovery Officer The Presiding Officer has allowed these Appeals and has set aside the order passed by the Recovery Officer. Aggrieved against the same, the Appellant borrowers have filed these Appeals.
7. The Recovery Officer had set aside the e-auction sale on the ground that the auction of the mortgaged property in question was not held as per the terms and conditions stipulated in the e-auction notice dated 15th January, 2015. This finding is returned on the basis of some reports filed before the Recovery Officer in regard to the e-auction etc. As per the Recovery Officer, the highest bidder had not deposited the earnest money in time as required by the sale notice and, hence, could not have been allowed to participate in the sale.
8. The Tribunal below has considered the documents on record to find that the Recovery Officer, vide his order dated 5th January, 2015, has issued direction to deposit of earnest money by way of demand draft/pay order or through NEFT/RTGS along with identity proof before the Recovery Officer latest by 5 p.m. on 20th February, 2015. The finding by the Recovery Officer was that this condition was not complied with by the auction purchaser. The Tribunal below has found that the highest bidder had produced a letter dated 20th February, 2015 addressed to the Recovery Officer by the Company stating that the demand draft for Rs. 4.6 crore had been taken on 20th February, 2015 for depositing as earnest money. This letter bore the seal of the DRT. The demand draft for a sum of Rs. 4.6 crore was taken on 20th February, 2015. The Bank also produced the document available on record which was an extract of e-mail showing that a sum of Rs. 4.6 crore was received at 4.58 p.m. on 20th February, 2015. This document draft was accounted for. The Tribunal below, thus, found that this document clearly established that the auction purchaser had deposited the amount before 5 p.m. on 20th February, 2015.
9. The Plea by the auction purchaser before the Tribunal below also was that as agent had appeared before the Recovery Officer before 5 p.m. on 20th February, 2015 and had shown documents and draft, when the Recovery Officer had directed him to deposit the document with the Registry and the demand draft with Respondent-Bank. As per the auction purchaser, by the time its agent reached the Registry, it had been closed and nobody was there to receive the document. 21st February, 2015 was Saturday and the DRT was closed. So was the position on 22nd February, 2015, being Sunday. The documents were accordingly, deposited on the next working day. The documents could not be deposited on 20th February, 2015 but it is clear that the earnest money of Rs. 4.6 crore was deposited before 5 p.m. on 20th February, 2015. The Counsel for the Appellants has not been able to show anything to contest or to dispute this factual finding returned by the Tribunal below. The Tribunal below has rightly observed that the Respondent-Bank would have no special interest in favour of the auction purchaser except for recovery of the amount. The auction purchaser has purchased this property for a sum of Rs. 46.01 crore. It is not a small amount. Once the auction purchaser had deposited the earnest money within the stipulated period, it had every right to participate in the auction. Mere fact that the auction purchaser was permitted to participate in the auction would show that he had deposited the earnest money in time. It is rightly observed by the Tribunal that the auction purchaser was given green signal to participate in the e-auction only once it was found that it had deposited the earnest money.
10. The auction purchaser was required to deposit 25% of the bid amount within 24 hours. It has deposited an amount of Rs. 6.90,25,000/- by way of demand draft on 24th February, 2015. The auction in this case was held on 23rd February, 2015. Thus, 25% of the bid amount was also deposited within 24 hours. So has been the finding by the Tribunal below.
11. The balance sale consideration was required to be deposited on or before the 15th day from the date of e-auction, along with other charges. The Bank had filed an affidavit on 23rd March, 2015 deposing that the balance amount of Rs. 34,50,75,000/- was deposited by way of demand draft dated 10th March, 2015. Thus, the Tribunal has found that there was no violation or infraction of the conditions of the auction.
12. The Recovery Officer, in my view, was not justified in finding fault with the auction on the ground that PAN and Passport enclosed was of Mr. Karan Pal Singh Bhatt and not that of the authorised representative, i.e. Mr. Vineet Raj Pillai. The Tribunal has rightly found that the Company was represented through Mr. Karan Pal Singh Bhatt who was Director of the Company whereas Mr. Vineet Raj Pillai was only authorised to complete necessary office work. No fault thus could be found in regard to the action of the Company in producing I.D. proof in the name of Mr. Karan Pal Singh Bhatt. This action is a proper action.
13. Perusal of the order passed by the Recovery Officer would show that the objections filed by UPSIDC and CD Nos. 1 and 2 were rejected being devoid of merit. The sale, otherwise, was set aside only while perusing the record for confirmation of the same. The Appellants herein never impugned the finding returned by the Recovery Officer in rejecting their objections. The sale may have been set aside, but if the Appellants were keen to press their objections which they filed before the Recovery Officer and which were dismissed, they could be expected to challenge that finding by filing an Appeal before the Tribunal below. In this background, the Appellants really cannot have any grievance in regard to the pleas which they had raised before the Recovery Officer. The Tribunal, in my view, has rightly considered the issues while deciding the Appeals. The order passed by the Tribunal below is well-considered and well-reasoned and is passed after appreciation of factual position. The impugned order, therefore, would not call for any interference in these second Appeals.
The present Appeals are accordingly dismissed in limine.