SHAKUNTALA JAISWAL Vs. ALLAHABAD BANK

JUDGEMENT

(1.) Measures taken by a secured creditor under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) is under challenge at the instance of the writ petitioner. The writ petitioner is the owner of an immovable put up for sale by the secured creditor under the provisions of the SARFAESI Act, 2002. The writ petitioner claims that, the secured creditor did not obtain her consent when the secured creditor extended the time to put in the balance purchase price by the purchaser, in terms of Rule 9 of the Security Interest (Enforcement) Rules, 2002 and, therefore, the sale by the secured creditor of the immovable property concerned is null and void.

(2.) In support of the proposition that, Rule 9 of the Security Interest (Enforcement) Rules, 2002 is mandatory, reliance is placed on (J. Rajiv Subramaniyan & Anr. v. Pandiyas & Ors., 2014 5 SCC 651) as well as (Mathew Varghese v. Amritha Kumari, 2014 5 SCC 610) in this regard. Relying on (G.M., Sri Siddeshwara Co-operative Bank Ltd. & Anr. v. Ikbal & Ors., 2013 10 SCC 83) it is submitted on behalf of the writ petitioner that since the secured creditor did not obtain consent of the writ petitioner to extend the time under Rule 9 of the Security Interest (Enforcement) Rules, 2002, the sale is vitiated. It is pointed on behalf of the writ petitioner that, the auction of the immovable property concerned was held on May 17, 2014 pursuant to the sale notice dated April 11, 2014. In terms of Rule 9 of the Security Interest (Enforcement) Rules, 2002 the purchaser ought to have deposited 25 per cent of the sale price immediately, that is, on the date of the sale and that the purchaser was required to deposit the balance 75 per cent within 15 days from the date of the sale or within the period extended by consent of the parties. In the instant case, the purchaser did not deposit the balance 75 per cent within the time allowed under Rule 9(3) of the Security Interest (Enforcement) Rules, 2002. The purchaser sought to deposit the balance 75 per cent of the purchase price after expiry of the period. The writ petitioner did not give any consent for such extension of time to deposit the purchase price. The writ petitioner is the owner of the property put up for sale. In view of the provisions of Rule 9 of the Security Interest (Enforcement) Rules, 2002 her consent for extension of time is mandatory. The writ petitioner not having given such consent, the sale is null and void.

(3.) The respondents contested the writ petition. It is submitted on behalf of the respondents that, the petition can be disposed of without inviting affidavits by treating the averments made in the petition not to be admitted by the respondents.