1 FARAD CONTINUATION SHEET. IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR. WRIT PETITION NO.2283/2008. M/s Raj Rajeshwari Builders Pvt.Ltd. ..vs.. The Akola Oil Industries Ltd. Akola and others. =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- Office Notes, office Memoranda of Coram Court's or Judge's appearances, Court's orders or directions order and Registrar's order. =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= CORAM: D.D.SINHA and C.L.PANGARKAR,JJ. DATE : 16th June, 2008. 1. Heard Mr.A.M.Ghare, Advocate for the petitioner, Mr.Anilkumar, Advocate for respondent no.2-Bank and Mr.S.V.Manohar, Advocate for respondent no.3. 2. The writ petition is directed against the action taken by the respondent-bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, since the original borrower failed to pay the loan obtained from the Bank. 3. Mr.Ghare, learned counsel for the petitioner, has submitted that the procedure 2 adopted by the Bank is not consistent with the provisions of the Act and Rules and therefore, it cannot be sustained in law. 4. It is contended that the petitioner being aggrieved person has a right to appeal under Section 17 of the Securitisation Act against the action taken by the respondent-Bank under Sub- section 4 of Section 13 of the Act. Mr.Ghare, learned counsel for the petitioner, has submitted that in the instant case the respondent-Bank has issued tender notice for the first time on 12/10/2004, whereby the tenders were invited for the sale of the land in question, admeasuring 18 acres. It is submitted that the bids were received by the Bank on 19/11/2004, same were opened on 27/11/2004 and the highest bidder had offered price of Rs.10.70 crores but did not come forward to complete the transaction. However, the respondent – bank entered into a private treaty with respondent no.4, who offered price of Rs.10.40 crorers. It is submitted that at this stage, respondent no.3 came on the scene and offered price of Rs.12 crorers to the respondent-bank on 2/5/2005 which was accepted by the bank on 6/1/2006. However, respondent no.3 initiated proceedings before the Debt Recovery Tribunal, 3 Nagpur in this regard and the settlement was arrived at between the respondent no.2 – Bank, respondent no.3 and 4. However, respondent no.4 withdrew his offer and backed out from the compromise and therefore offered given by respondent no.3 was accepted w.e.f. 6/1/2006 and therefore, respondent no.3 is bound by the settlement which was arrived at before the Debt Recovery Tribunal, Nagpur. 5. Mr.Ghare, learned counsel for the petitioner, has submitted that the action of respondent-bank is inconsistent with Sub-rule 8 of the Act. Similarly, the petitioner has also locus to challenge the same by filing the appeal under Section 17 of the said Act. It is further contended that in view of the consequence of events mentioned herein above, the petition also does not suffer from delay and laches. 6. Mr.Anilkumar, Advocate for respondent- bank has submitted that the procedure adopted by the respondent-bank for sale of property of original borrower is inconsistent with the provisions of the Securitisation Act and Rules made thereunder. It is contended that clause (d) of Sub-Rule 5 of Rule 8 entitles the respondent- 4 bank to sell the immovable property of the borrowers by private treaty. It is further contended that so far as clause 8 of the Act is concerned, the bank has obtained the consent of the official liquidator, since same was recommended by official liquidator. It is further contended that the petitioner cannot be termed as aggrieved person under Section 17 of the Act. The learned counsel for the respondent-bank further submits that the bank has accepted the highest offer which was made at the relevant time by respondent no.3 and received the amount and completed the formalities. The possession of the property in question was also handed over on 7/11/2006. 7. Mr.S.V.Manohar, learned counsel for respondent no.3, has submitted that the action of the respondent-bank is consistent with the provisions of the Act and Rules and the petitioner has no locus to challenge the action of the bank in view of the provisions of Section 17 of the Act. It is further contended that the petition suffers from delay and laches, since the transaction is completed long time ago and possession of the property was handed over to respondent no.3. 5 8. We have considered the rival contentions canvassed by the respective counsel. Perused the provisions of Section 17 of the Securitisation Act as well as clause (d) of Sub-Rule 5 of Rule 8 of the Act. In the backdrop of the above referred facts, it is evident that the respondent-Bank has issued tender notice way back on 12/10/2004. By virtue of the said tender notice, the people at large including the petitioner, were aware of the same. If the petitioner has really genuine interest to participate in the process of tender, the petitioner ought to have submitted his bid. However, it is not in dispute that the petitioner did not participate in the process of tender initiated vide tender notice dated 12/10/2004. 9. Similarly, the petitioner also within the reasonable time approached the respondent-bank by giving appropriate offer for the property in question. Perusal of clause (d) of Sub-rule 5 of Rule 8 of the Act clearly shows that the property in question being immovable secured assets, the respondent-bank is entitled to sell the same by different modes mentioned in sub-rule 5, in which one of the modes is a private treaty. In view of this specific Rule, the contention of the learned 6 counsel for the petitioner that the action of the respondent-bank regarding sale of property in question by private treaty is inconsistent with the said Rule is devoid of substance and is rejected. The learned counsel for the respondent-bank has made a statement that the official liquidator has recommended the offer of respondent no.3 earlier, which was accepted on 6/1/2006. In that view of the matter, the contentions raised by learned counsel for the petitioner viz a viz sub-rule 5 Rule 8 also raise efficacy. 10. So far as the provisions of Section 17 of the Act is concerned, it deals with the right to appeal and sub-clause 1 of said provision contemplates that any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor may make an application along with fee, as may be prescribed, to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken. The plain reading of the provisions of Section 17 would show that the person including borrower aggrieved by the measures or action taken by the secured creditor under sub-section 4 of Section 13 of the Act alone 7 has a right to appeal within a stipulated period mentioned therein. This analogy cannot be extended to the people at large and by necessary implication will have to be restricted to the class of persons who are aggrieved by the action taken by the secured creditor under sub-section 4 of Section 13 of the Act. In that view of the matter, the petitioner cannot come within the category of person, in that sense of the term, who is said to be aggrieved by the action of the respondent-bank taken under sub-section 4 of Section 13 of the Act and therefore, the conclusion arrived at by the Tribunal as well as the appellate authority in this regard is just and proper. 11. The Tribunal as well as the appellate authority has also refused to take cognizance of the application of the petitioner on the ground that the same is barred by limitation which according to us, also cannot be held to be unfounded. 12. It is well settled that though the secured creditor is entitled to sell the property of the borrower under sub-section 4 of Section 13 of the Act, he must try to get maximum price for the property in question, which is sold by the secured creditor for the satisfaction of the loan amount. 8 Similarly, sub-rule 5 of Rule 8 of the Act stipulates that the secured creditor is entitled to undertake different procedures for transfer, sale etc. of the property in question mentioned therein. At the same time, if the petitioner had approached the respondent-bank within the reasonable time and could have given an offer more than that received by respondent-bank from others, including respondent no.3, in that event, for the purpose of protecting the interest of borrower it would have been necessary for the secured creditor to accept the same. However, in the backdrop of the above referred facts, apart from the reasons which we have mentioned in the present order, the offer given by the petitioner at such a belated stage and after the whole transaction is over, is of no consequence. Consequently, no case is made out for showing indulgence. Same is dismissed. JUDGE JUDGE. chute 9