BASUDEO PRASAD Vs. ALLAHABAD BANK

JUDGEMENT

(1.) In W.P.(C) No. 545 of 2007 the writ Petitioner, who was guarantor for the loan sanctioned in favour of the Firm M/s Shree Durga Oil Mill, has prayed for setting aside the auction sale dated 6.1.2007 by the Respondents-bank with respect to the property given as security and for other related prayers.

(2.) According to the Petitioner the Respondents-Bank had sanctioned loan in favour of M/s Shree Durga Oil Mill with cash credit limit of Rs. 4 lakhs by letter dated 22.5.1996. the Petitioner and his wife stood as Guarantor for the loan sanctioned in favour of the said firm. In the year 1999 due to reasons beyond control of the firm loan amount of the bank could not be paid. The unit was declared as Non Performing Asset (hereinafter referred to as 'NPA'). the Bank, thereafter, initiated action against the firm under the provision of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred, to as 'SRFAESI Act'). Demand notice was issued on 3.9.2002 for recovery of Rs. 12.74, 120/-The Respondents-Bank agreed for one time settlement in the year 2001. According to the terms of agreement the due amount was to be paid by May, 2002. Out of that, about 25% of the amount was paid to the bank. The Petitioner also deposited post-dated cheques to be liquidated by May, 2007, but in spite of the same the Bank took possession of the assets and subsequently put the same on auction on 6.1.2007. Possession thereof, however, has not been given to the auction purchaser. It has been further stated that the Petitioner is the guarantor of the loanee and he is always ready and willing to liquidate all the dues as per the one time settlement. He also said auction purchaser then paid the entire sale proceeds to the bank. Sale certificate was, accordingly, issued on 1.3.2007 to the said highest bidder. The auction sale held in accordance with law. The allegation made in the writ petition is wholly unfounded and the Petitioner is not entitled to the reliefs prayed for.

(3.) Mr. Rajesh Kumar, learned Counsel appeared for the auction purchaser who intervened in this case with the permission of the Court. Learned Counsel submitted that in the auction held under the provisions of the SRFAESI Act, the auction purchaser took part and being the highest bidder, he purchased the property in question legally for the valuable consideration. He has also deposited the bid amount long back on 5th February, 2007 and the sale certificate dated 1.3.2007 has also been issued in his favour. The entire process was in accordance with the legal provisions and there is no illegality. The writ, Petitioner has even failed to avail the alternative statutory remedy of referring appeal within the prescribed period and has approached this Court after an inordinate delay. The writ petition also, for the said laches, is not maintainable and also for the laches on the part of the writ Petitioner.