IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWELFTH DAY OF NOVEMBER TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE A.GOPAL REDDY and THE HON’BLE MR JUSTICE G. CHANDRAIAH WRIT PETITION Nos.20687 of 2009 & 27646 of 2008 WRIT PETITION No.20687 of 2009 BETWEEN: Meher & Company …Petitioner AND Union Bank of India, Nariman Point, UBI House, Mumbai, rep. by its Chairman & Managing Director & 2 others. …Respondents WRIT PETITION No.27646 of 2008 BETWEEN: Meher & Company …Petitioner AND Union Bank of India, Nariman Point, UBI House, Mumbai, rep. by its Chairman & Managing Director & 2 others. …Respondents THIS COURT MADE THE FOLLOWING: HON’BLE SRI JUSTICE A. GOPAL REDDY AND HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT PETITION Nos.20687 of 2009 & 27646 of 2008 COMMON ORDER: Since these two writ petitions are interconnected and the issue involved is one and the same, they are heard together and being disposed of by this common order. For due recovery of secured debt, when the respondent-Bank issued notification on 5.3.2007 inviting tenders for sale of 85 residential structures with open site admeasuring 200, 400 and 600 sq.yds. with house properties in Sy.Nos.22, 23, 29, 33 and 36 of Sri Shiridi Sai Nagar, Toopranpet Village, Choutuppal Mandal, Nalgonda District on ‘as is where is’ basis, the petitioner-a partnership firm participated by quoting a tender and became successful bidder for a total amount of Rs.5,64,44,000/-, and that the petitioner was required to pay 15% of the total amount i.e. Rs.84,66,600/- on or before 20.3.2007, and that out of the balance sale consideration, it has to deposit an amount of Rs.1,91,90,960/- being 34% of the sale consideration on or before 31.3.2007 and the remaining balance sale consideration has to be paid on or before 31.5.2007. There was a condition that on failure to pay the said amount within the specified time, the Earnest Money Deposit will be forfeited and the property would be resold. As admitted by the petitioner, it has paid an amount of Rs.6,26,000/- and obtained sanction from the Andhra Bank, Hanamkonda branch, which having accepted to finance the petitioner issued a letter for an amount of Rs.84,66,600/-. With the said amount when the petitioner approached the respondent-Bank to pay the 15% of the sale consideration on 30.3.2007 i.e. beyond the stipulated date of 20.3.2007, the same was not accepted by the Bank. According to the petitioner, as the representation made by it on 3.4.2007 about the payment of balance sale consideration proposed to be made which was forwarded along with the demand draft could not elicit any response, it made another representation to the Bank on 17.4.2007 followed by another representation, dated 19.4.2007. However, the petitioner received a letter on 25.4.2007 addressed by the Bank, dated 11.4.2007 inter alia canceling the sale confirmed in favour of the petitioner and also forfeiting the Earnest Money Deposit of Rs.5,75,000/-. Subsequently, the respondent- Bank published a notification in the Eenadu Telugu daily newspaper on 17.5.2007 once again inviting tenders with respect to the property in question. Questioning the said sale notification, petitioner filed W.P.No.10733 of 2007 and this Court by order, dated 24.5.2007 in W.P.M.P.No.13487 of 2007 stayed the auction on condition of petitioner paying Rs.2.00 crores within 24 hours from the date of the order and Rs.2,76,57,506/- on or before 31.5.2007 and Rs.2,87,86,440/- on or before 30.6.2007. As a typographical error occurred in the said order with regard to condition No.2 i.e. for payment of Rs.76,57,506/- which was typed as Rs.2,76,57,506/-, the same was corrected by order, dated 30.5.2007 by extending the time till 31.5.2007 for payment of Rs.2.00 crores as per condition No.1. As the petitioner did not honour the said interim order, the said writ petition was dismissed with an elaborate order running into 40 pages, wherein this Court held that ‘having been unsuccessful in making the payment of instalments within the stipulated time and after some correspondence at a belated stage, the petitioner is coming up with different version stating that he is prepared to pay the total amount with interest also, which is beneficial to the Bank, but this Court exercising the jurisdiction under Article 226 of Constitution of India cannot create a contract between the petitioner and respondent-Bank qua the agreed conditions.’ While dismissing the said writ petition, the petitioner was granted liberty to make a representation for refund of the amount and that the Bank was directed to consider the same in proper perspective on the grounds of justice, equity and good conscience. While the matter stood thus, the respondent-Bank issued a notification for sale of the property in question on ‘as is where is’ basis. On issuance of the notification, petitioner made a representation on 12.12.2008 as per the observations made by this Court in W.P.No.10733 of 2007, dated 23.11.2007 i.e. nearly after lapse of 15 months that too on issuance of notification inviting tenders, and filed W.P.No.27646 of 2008 on 17.12.2008 questioning the cancellation of sale confirmed in favour of the petitioner, dated 16.3.2007 and issuing the notification, dated 16.7.2007 inviting tenders for sale of the property as arbitrary and illegal. It is needless to say that though the petitioner unsuccessfully challenged the cancellation of sale confirmed in its favour in the earlier writ petition, this Court admitted W.P.No.27646 of 2008 and ordered notice in the stay petition. Since no stay as such was granted, the respondent-Bank again issued the notification on 28.8.2009. On issuance of such notification, W.P.No.20687 of 2009 is filed contending that without considering the representation of the petitioner, dated 12.12.2008 issuing the notification, dated 28.8.2009 inviting tenders for sale of the property is arbitrary and illegal and to direct the respondents to refund the Earnest Money Deposit of Rs.5,75,000/- to the petitioner together with interest at the prevailing rate from the date of payment till its realization in furtherance of the notification, dated 16.5.2007. This Court while ordering notice before admission on 24.9.2009 in W.P.No.20687 of 2009, though permitted the Bank to proceed with the sale as per the notification, directed it not to confirm the sale. The respondent-Bank filed a counter affidavit in W.P.No.20687 of 2009 contending that the representation of the petitioner could not be disposed of since the petitioner filed W.P.No.27646 of 2008 within five days from the date of making such representation, and that having committed default the petitioner cannot stall the sale process. Sri P.Venugopal, learned counsel appearing for the petitioner strenuously contended that the petitioner in its representation made to the Bank, dated 12.12.2008 clearly stated that the amount of Rs.4,84,40,600/- expected by the Bank under notification, dated 22.11.2008 is much lesser than the earlier notification, and that had the Bank negotiated in terms of the pleas taken by the petitioner, it would have been benefited and that the petitioner agreed to complete the sale transaction if the Bank gives clear and marketable title and willing to pay the amount as specified in the notification without prejudice to the right of claiming Earnest Money Deposit together with interest, but the said representation has not been considered by the Bank in proper perspective and ultimately, it is the Bank who has to lose nearly Rs.1.00 crore and had the Bank accepted the offer of the petitioner, it would have been benefited. We do not see any merit in the contention advanced by the learned counsel for the petitioner. Having committed default for payment of the sale consideration as per the sale conditions, the petitioner cannot dictate terms to the respondent-Bank. When the property was notified for auction on ‘as is where is’ condition, it is for the petitioner to participate in the auction and having taken a calculated risk, it is not open for petitioner to contend that since the description of the immovable property to be sold, including the details of the encumbrances have not been made known to the petitioner under Rule 8(6) (a) of the Security Interest (Enforcement) Rules, 2002, the respondent-Bank cannot forfeit the Earnest Money Deposit paid by the petitioner. The very same contention advanced by the petitioner in its earlier Writ Petition No.10737 of 2007 was already rejected by this Court and whenever a notification is issued by the Bank for sale of the property in question, the petitioner cannot go on filing the writ petitions and raise the very same contentions that have not been accepted by this Court. It is now well-settled that participation in the auction as per the tender conditions is the realm of contract and violations of the conditions, if any, and the forfeiture of the Earnest Money Deposit cannot be subject-matter of judicial review under Article 226 of Constitution of India and the same have to be established in a civil suit. In view of the same, we do not see any merit in any of the writ petitions. Accordingly, both the writ petitions are dismissed with costs of Rs.5,000/- each payable by the petitioner to the respondent- Bank. _______________ A. GOPAL REDDY, J. _______________ G. CHANDRAIAH, J. NOVEMBER 12, 2009 Tsr.