IN THE HIGH COURT OF KARNATAKA AT BENGALURU Dated this the 30th day of March, 2017 PRESENT:
THE HON’BLE MR SUBHRO KAMAL MUKHERJEE, CHIEF JUSTICE AND THE HON’BLE MR JUSTICE P S DINESH KUMAR Writ Appeal Nos.179-180 of 2016 (GM – DRT) BETWEEN:
M/s.SREE JAYALAKSHMI TEXTILES A REGISTERED PARTNERSHIP FIRM HAVING ITS REGISTERED OFFICE AT P.B.NO.50, GAREHATTI CHITRADURGA - 577 501 REPRESENTED BY ITS PARTNER SRI.K.V.PRABHAKAR AGED ABOUT 56 YEARS AND REP. BY ITS PARTNER V. RAKESH KUMAR AGED 39 YEARS ... APPELLANT (By Shri. PARAS JAIN, Adv.,) AND:
1. M/s. INTERNATIONAL ASSET RECONSTRUCTION COMPANY PVT. LTD., HAVING ITS OFFICE AT # A /508, 5TH FLOOR, 215, ATRIUM KANAKIA SPACES, ANDHERI KURLA ROAD ANDHERI (E), MUMBAI-400 093, INDIA REP. BY AUTHORISED OFFICER 2. M/s. AMMA BHAGWAN TRADERS NO.5, APMC COMPLEX, APMC YARD BICAMPADI, NEW MANGALORE - 575 001 REP. BY ITS MANAGING PARTNER SMT.SULOCHANAMMA ...RESPONDENTS (By Shri G. KRISHNAMURTHY, SENIOR COUNSEL FOR Shri.
ASHOK KUMAR, ADV., FOR R1 Shri. CHANDRAKANTH PATIL, Adv., FOR C/R2) THESE WRIT APPEALS ARE FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN WRIT PETITION NO.22348/2015 C/W WRIT PETITION NO.29362/2015 DATED 15/12/2015.
THESE WRIT APPEALS COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE CHIEF JUSTICE DELIVERED THE FOLLOWING:-
J U D G M E N T The Axis Bank Limited granted a loan in favour of the second respondent and, the second respondent, to secure the loan, mortgaged the disputed property.
2. As the second respondent failed to pay the dues of the Bank, notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, was issued. The Bank assigned the debt in favour of respondent No.1- International Asset Reconstruction Company Private Limited. The property was put to sale.
3. The Debts Recovery Tribunal in SA No.87 of 2014, although, granted leave to proceed with the sale, restrained the Bank from confirming the sale, and directed the parties to maintain status quo.
4. This appellant submitted its bid and it is the highest offeror. Though the reserve price was fixed at `7,50,00,000/- (Rupees seven crore and fifty lakhs) only, this appellant offered `8,01,00,000/- (Rupees eight crore and one lakh) only, for the property. Under the terms of the sale notice, the appellant deposited 25% of the total bid amount with the Bank.
5. Before the sale could be confirmed, the borrower approached the Bank for ‘one time settlement’ on payment of `9,00,00,000/- (Rupees nine crore) only. The settlement was struck. The mortgage was released.
6. The appellant, strenuously, argued that the Bank could not have released the mortgage, as, its bid was accepted.
7. Acceptance of bid is not confirmation of sale. Till the confirmation of sale is made, the borrower is entitled to come forward for releasing the mortgage.
8. In this case, there was an order of injunction by the Debts Recovery Tribunal restraining the authorities to confirm the sale. Therefore, no right was accrued in favour of the bidder, except for the refund of the money.
9. We are informed that, already, `2,00,25,000/- (Rupees two crore and twenty five thousand) only, has been refunded to the bidder.
10. The learned Single Judge, rightly, held that as the borrowers came forward to settle the dues with the Bank before confirmation of the sale, they are entitled to redeem the mortgaged property.
11. We do not find any merit in these appeals. The appeals are dismissed accordingly.
12. We make no order as to costs.
Sd/- CHIEF JUSTICE cp* Sd/- JUDGE