1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1924 OF 2007 1. Alpana Kaur Dhillon, Age adult, 2. Mandip Swamyya, Both Indian Inhabitants residing at Flat No.16, 3rd Floor, Deonar Parijat Co-op. Hsg. Society, Deonar, Mumbai - 400 088 .. Petitioners Versus 1. Bank of India, Constituted under the Banking Companies (Acquisition & transfer of Undertakings) Act, 1970, having its Head Office at Express Towers, Nariman Point, Mumbai - 400 021. and one of its branch offices inter alia at 96, Sion Matunga Estate, Gandhi Market Branch, Mumbai - 400 022 known as the Gandhi Market Branch. 2. Twincity Organics Pvt.Ltd., A company registered and existing under the provisions of the Companies Act, 1956, and having its registered office at (a) 218/220, Kapoowala Mansion, 5th floor, Samuel Street, Mumbai - 400 003 (b) G-13/6, MIDC Industrial Estate, Taloja, Navi Mumbai. 3. H.S.J. Dhillon, of Mumbai, Adult, Indian Inhabitant residing at (a) Flat No.E/16, Parijat Building Deonar Parijat Co-op. Hsg. Soc. Ltd., Deonar Mumbai - 400 088 (b) Sukh Niwas, Bhandarkar Road, Matunga, Mumbai - 400 019. 4. Satish D. Sanghvi of Mumbai, Indian Inhabitant residing at 83-B, Meher Apartments, Anstey Road, Mumbai - 400 026. 2 5. Prakash D. Sanghvi of Mumbai, Indian Inhabitant residing at 310, Samudra Mehal, Dr.Annie Besant Road, Worli, Mumbai. 6. Praful N. Vaghani of Mumbai, Indian Inhabitant residing at 12, Magan Baugh, C.P. Road, Kandivali (E), Mumbai 400 067 7. Mukesh D. Ramani of Mumbai Indian Inhabitant residing at 100, Moru Milap. Opp. Khar Gymkhana, Mumbai - 400 052. 8. Darshah Shah, an Adult, Indian Inhabitant, R/at. Dhayeshwar Arcade, 7th floor, Raunaq Estate, L.B.S. Marg, Ghatkopar (West), Mumbai. 9. Dhanraj M. Rajpal, An adult, Indian Inhabitant, R/at. 309, Pragati Industrial Estate, N.M. Joshi Marg, Parel (E), Mumbai - 400 011. .. Respondents. Mr.Surel Shah with Mr.Mahesh Thorat for the petitioners. Mr.Kiran Jain with Mr.Tushar Garodia i/by A.M. Sampat for respondent No.9. CORAM : SWATANTER KUMAR, C.J. & CORAM : SWATANTER KUMAR, C.J. & CORAM : SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. J.P. DEVADHAR, J. J.P. DEVADHAR, J. RESERVED ON: 8th February, 2008 RESERVED ON: 8th February, 2008 RESERVED ON: 8th February, 2008 PRONOUNCED ON: 13th March, 2008 PRONOUNCED ON: 13th March, 2008 PRONOUNCED ON: 13th March, 2008 ORAL JUDGMENT (Per J.P. Devadhar, J.) : 1. This petition challenges the order dated 8-6-2006 passed by the Recovery Officer, order of the Debt Recovery Tribunal (DRT for short) dated 17-8-2006 and the order passed by the Debt Recovery 3 Appellate Tribunal (DRAT for short) on 6-8-2007. By the aforesaid orders, the application filed by the petitioners for setting aside the auction sale of the flat bearing No.16, 3rd floor, Deonar Parijat Co-operative Housing Society, Deonar, Mumbai - 400 088 (‘the said flat’ for short) in favour of respondent No.9 have been rejected. 2. The relevant facts are that pursuant to the recovery certificate issued in favour of the respondent No.1 - Bank against respondents No.2 to 7, the said flat belonging to the respondent No.3 which was mortgaged to the Bank was put for auction. On 6-5-2005, respondent No.8 offered to purchase the said flat for Rs.14,10,000/-. On 17-5-2005, the petitioners who are sisters of respondent No.3 offered to purchase said flat for Rs.15,00,000/- and deposited Rs.7,00,000/- on the same day. The petitioners were given 15 days time to deposit the balance amount. On 30-6-2005, the petitioners deposited Rs.7,11,000/- out of said sum of Rs.15,00,000/-, thus the balance amount payable was Rs.89,000/-. On that day, respondent No.9 offered to purchase the said flat for Rs.18,00,000/-. As a result, the auction sale was postponed to 5-7-2005, so as to enable the petitioners to match the amount offered by the respondent No.9. However, on 5-7-2005, the petitioners deposited a sum of 4 Rs.89,000/- only and made no commitment to pay amount higher than Rs.15,00,000/-. 3. As the petitioners failed to match the amount of Rs.18,00,000/- offered by the respondent No.9, but only offered Rs.15,00,000/-, the Recovery Officer accepted the offer of respondent No.9 on 24-8-2005, but gave further time of one month to the petitioners to raise their offer upto Rs.18,00,000/- or furnish offers higher than the amount offered by the respondent No.9. As the petitioners failed to match the offer of respondent No.9 and there were no higher bidders, the Recovery Officer confirmed the sale of the said flat in favour of respondent No.9 on 26-9-2005 for Rs.18,00,000/-. It is not in dispute that after confirmation of sale in favour of respondent No.9, the petitioners have withdrawn the amount of Rs.15,00,000/- deposited by them. Thereafter, the sale certificate was issued in favour of respondent No.9 on 29-9-2005. Subsequently, the stamp duty in respect of the sale of the said flat was paid by the respondent No.9 on 13-4-2006 and the sale was registered on 15-4-2006. 4. When the respondent No.9 claimed possession of the said flat, the respondent No.3 sought time to hand over possession of the said flat. The Recovery Officer gave 30 days time to the respondent No.3 to 5 hand over possession of the flat. As the possession was not handed over within the stipulated time, the Recovery Officer by his order dated 31-5-2006 directed the respondent No.3 to hand over possession of the said flat within seven days of receiving the said letter. 5. In the meantime, on 29-5-2006, the petitioners applied to the Recovery Officer for setting aside the sale in favour of respondent No.9 and offered to pay Rs.18,10,000/-. It was contended that the petitioners are residing in the said flat with respondent No.3 and they would be put to difficulty in case they were unable to acquire another flat. 6. The Recovery Officer by his order dated 8-6-2006 rejected the application inter alia on the ground that the petitioners failed to avail the opportunity given to them to purchase the flat for Rs.18,00,000/- and once the sale is confirmed in favour of respondent No.9, it is not possible to accept the contention of the petitioners. 7. Thereupon, the petitioners filed an Appeal before DRT, but the same was dismissed on 17-8-2006. Further appeal filed by the petitioners before the DRAT was also dismissed on 6-8-2007. Challenging 6 the aforesaid orders, the present petition is filed. 8. Mr.Shah, learned counsel appearing on behalf of the petitioners submitted that the sale in favour of respondent No.9 was a fraudulent one because the petitioners had withdrawn from the auction on the representation made by the respondent No.9 who is the brother in law of respondent No.7, who happens to be a Director of respondent No.2 - company and that the respondent No.9 had agreed to sell the said flat to the petitioners. He submitted that the petitioners were always ready and willing to pay the expenses incurred by the respondent No.9 including the interest on the amount paid by the respondent No.9 for the purchase of the flat in question. Alternatively, Mr.Shah submitted that the petitioners are ready and willing to offer to the respondent No.9 similar flat in the same locality at the cost of the petitioners, however, respondent No.9 is adamant and not willing to accept that offer. 9. Mr.Jain, learned counsel appearing on behalf of respondent No.9, on the other hand, submitted that the proceedings initiated by the petitioners are in gross abuse of the process of law and the respondent No.9 who has lawfully purchased the said flat in the auction sale in the year 2005 is kept 7 out of possession till date by initiating proceedings one after the another which are wholly unsustainable in law. He submitted that the allegations of any understanding between the petitioners and the respondent No.9 as well as the allegation of fraud were totally devoid of any merit and the petition is liable to be dismissed with costs. 10. On careful consideration of the rival submissions, we find it difficult to accept the arguments advanced on behalf of the petitioners. Admittedly, the flat in question belonging to the respondent No.3 was mortgaged to the Bank (respondent No.1) and pursuant to the recovery certificate, the bank was entitled to sell the said flat for recovering its dues. When the flat was put to auction, the petitioners who are the sisters of the respondent No.3 have participated in the auction and had offered an amount of Rs.15,00,000/-. Even after the respondent No.9 offered to purchase the said flat for Rs.18,00,000/- the recovery officer did give several opportunities to the petitioners to purchase the flat in question for Rs.18,00,000/-. However, the petitioners failed and neglected to offer the amount of Rs.18,00,000/-. In these circumstances, the confirmation of sale of the said flat in favour of the respondent No.9 for 8 Rs.18,00,000/- on 26-9-2005 cannot be faulted. Moreover, the sale confirmed on 26/9/2005 was duly registered on 15/4/2006 and thereafter, when the possession of the flat was sought, the petitioners filed an application on 29/5/2006 which was clearly an afterthought. 11. It is pertinent to note that after the sale of the said flat in favour of respondent No.9, the petitioners have withdrawn the amount of Rs.15,00,000/- deposited by them for the purpose of purchasing the flat in question. This fact clearly establishes that the petitioners had no objection for confirmation of sale of the flat in question for Rs.18,00,000/- in favour of the respondent No.9. 12. The argument of the petitioners that there was some understanding between the petitioners and the respondent No.9 in relation to the sale of the flat in question has been rightly disbelieved by the authorities below because, if all the petitioners were willing to purchase the flat in question for Rs.18,00,000/-, they could have very well agreed to pay the said amount. In fact the petitioners had offered and in fact paid Rs.15,00,000/-. If at all the petitioners were willing to purchase the flat for Rs.18,00,000/- they could have offered to pay the balance amount of Rs.3,00,000/-, which they did 9 not do. Instead the petitioners have withdrawn the amount of Rs.15,00,000/- deposited by them, thereby facilitating the sale of the said flat in favour of the respondent No.9. After the sale was confirmed and the same was registered on 29-5-2006, the petitioners came out with a plea that there was an understanding that the respondent No.9 on confirmation of the sale would transfer the said flat in favour of the petitioners. There is no basis for this argument and no material was placed before the lower Court and no material has been placed before this Court to substantiate the above claim. The petitioners, admittedly, do not have any title over the flat in question. In these circumstances, the decision of the authorities below in rejecting the application of the petitioners cannot be faulted. 13. In the result, we see no merit in this petition and the same is hereby dismissed with no order as to costs. CHIEF JUSTICE J.P. DEVADHAR, J.