SHIBU M. Vs. TAMILNAD MERCANTILE BANK LTD

JUDGEMENT

(1.) The petitioner had participated in an auction conducted by the respondent bank, of residential property belonging to his family, in proceedings under the SARFAESI Act . It is not in dispute that, in the auction that was held on 15.2.2020, the petitioner emerged as the highest bidder. Immediately thereafter, the petitioner deposited 25% of the amount as stipulated under the Security Interest Enforcement Rules 2002, and he was given time till 30.03.2020 to pay the balance amount. It is the case of the petitioner that while so, there was a lock down declared throughout India on 24.3.2020 and hence, he immediately submitted a request before the 3rd respondent for extension of time for depositing the balance amount. It is stated that the respondent considered the request of the petitioner and granted him time up to 13.5.2020 for payment of the balance 75% of the bid amount. Vide the communication issued to the petitioner, the respondent bank also made it clear that in the event of the petitioner not paying the balance amount by 13.5.2020, the already deposited 25% of the bid amount would stand forfeited by the respondent bank. It is the case of the petitioner that even after 13.5.2020, he could not effect the payment of the balance amount and hence he approached the first respondent bank, yet again, through Ext.P7 letter seeking a further extension of time to comply with the requirement of payment of the balance 75% of the auction amount. When no reply was forthcoming from the respondent bank, he approached this court through the present writ petition.

(2.) I have heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents.

(3.) Learned Standing Counsel for the respondent would submit that the petitioner was given ample time to make payment of the balance purchase price, and notwithstanding the time granted to him, the petitioner did not effect payment of the balance purchase price. It is therefore submitted that in view of the default committed by the petitioner/auction purchaser, the amount initially paid in respect of the auction property would be forfeited in accordance with the Rule 9(5) of the Security Interest Enforcement Rules 2002.