ASSISTANT GENERAL MANAGER & AUTHORIZED OFFICER, UNION BANK OF INDIA CONSORTIUM Vs. DEWA INVESTORS ASSOCIATION

JUDGEMENT

(1.) These two writ appeals are directed against a common judgment dated 20.03.2018 passed by the learned Single Judge finally disposing of W.P.(C) Nos.34521/2017 and 41631/2017. W.A. No.999/2018 arises out of W.P.(C) No.34521/2017 while W.A. No.1041/2018 arises out of W.P. (C) No.41631/2017. Both the writ petitions were filed by persons, who had agreed to purchase apartments from M/s.Dewa Projects Private Limited. The agreements were for the purchase of apartments comprised in their project "DEWA PIER 20 " in Survey No.843 of Ernakulam Village, Kanayannoor Taluk. The petitioner in W.P.(C) No.34521/2017 is a registered association of persons, who had agreed to purchase the apartments as stated. They had filed the writ petitions challenging the action of the appellants herein proposing to auction plot No.C5 for the purpose of recovering the loan amount advanced by them in view of the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'SARFAESI Act'). It was contended that the writ petitioners were persons, who had advanced substantial amounts for the purchase of apartments. Therefore, proceedings for recovery of the amounts due to the banks should be continued only after protecting their interests also. In other words, it was contended that any auction of the property, on which the apartment complex has been constructed in part, would have to be proceeded with, only safeguarding the interests of the home buyers also. It was contended that 10 they had invested their hard earned money for the project in the hope of acquiring homes for themselves. The action of the bank in proceeding to auction the land ignoring the rights of the home buyers was challenged in the writ petition.

(2.) The learned Single Judge noticed that in the earlier round of litigation at the instance of some of the intending purchasers, i.e., W.P.(C) No.19773/2015, the proceedings initiated against plot No.C5 had been challenged. In the said writ petition, the bank had agreed as a concession to keep aside plot No.C5, to sell the other plots first and to proceed against the said plot only if the amounts due could not be recovered from the sale of the other plots. Thereafter, the bank filed R.P. No.939/2016 seeking a review of the condition with respect to sale of plot No.C5. The review petition was disposed of on 30.03.2017 permitting the bank to proceed with the sale of the plot, keeping in mind the interests of the members of the association. Thereafter, it was when the bank issued the 11 auction notice that the present writ petitions were filed alleging that the interests of the home buyers had not been safeguarded. The contentions were resisted by the bank pointing out that the auction notice had specified that plot No.C5 was being sold in the 'as is where is' condition. According to the bank, that sufficiently disclosed all details regarding the nature of the property as well as the liabilities on it. However, by the time the writ petitions were finally heard, the date of auction, 12.03.2018, was over and no buyer had come forward to take part in the auction. It was, therefore, submitted on behalf of the appellants that a fresh notice would have to be issued scheduling the auction.

(3.) The learned Single Judge has held that it was not possible for this Court to ignore the persons who have invested money. Therefore, in order to protect the interests of the home buyers, it was necessary for the auction notice to state about the protection that is envisaged to secure the interests of persons who had invested money to purchase apartments. The learned Single Judge has further observed that it was for the auction purchaser to either wipe off the liability by repaying the amount or offering apartments on mutually agreed terms. It is aggrieved by the said directions that these writ appeals are filed by the bank.