Zero Page Writ Petition High Court

 

DISTRICT: NORTH 24-PARGANAS

 

IN THE HIGH COURT AT CALCUTTA

CONSTITUTIONAL WRIT JURISDICTION

APPELLATE SIDE

 

W. P. No.                      (W) of 2015

 

Subject Matter relating to

Under Group IX, Head (a) of the Classification List.

 

CAUSE  TITLE

 

Santosh Kumar Tiwari

  ………… Petitioner

                    Versus

IDBI Bank Limited & Others

                …………….. Respondents

 

 

Advocate on Record:

 

Ashok Kumar Singh

Advocate

Bar Association, Room No. 15

High Court, Calcutta.

Mobile No. 98368 29666.

DISTRICT: SOUTH 24-PARGANAS

 

IN THE HIGH COURT AT CALCUTTA

CONSTITUTIONAL WRIT JURISDICTION

APPELLATE SIDE

 

W. P. No.                      (W) of 2015

 

In the Matter of:

Santosh Kumar Tiwari

            ………… Petitioner

                    Versus

IDBI Bank Limited & Others

                …………….. Respondents               

 

I N D E X

Sl. No.	Particulars of Papers	Annexure	Page
1.	List of Dates
2.	Points of Law
3.	Writ Application		1 to 55
4.	Photocopy of the Publication or Notice For Sale of Residential Flats at Kolkata, dated 31st day of October’ 2012, made by the respondents / opposite parties,	P1	56
5.	photocopy of form -1, and form – 2, and copy of demand draft of EMD of Rs. 5,25,000/-,	P2	57 To 60
6.	Photocopy of Letter being ref. no. IDBI. SCB. No. 7816 / Recovery ( GKTPL ), dated 3rd day of December’ 2012, issued by the respondent Bank,	P3	61, 62,
7.	Photocopy of the letter of your petitioner, dated 19th day of December’ 2012, and a Photocopy of the printout of the email dated 19th day of December’ 2012, and 20th day of December’ 2012,	P4	63 To 66
8.	Photocopy of the Letter dated 8th day of January’ 2013, copy of the Letter being Ref. no. IDBI.SCB. No. 8916 / Recovery ( GKTPL ),	P5	67
9.	photocopy of Letter being Ref. no. IDBI.SCB No. 8916 / Recovery ( GKTPL ), dated 21st day of January’ 2013,	P6	68, 69,
10.	photocopy of Letter dated 4th day of February’ 2013, being reply of the Letter dated 21st day of January’ 2013 of the Respondent Bank,	P7	70
11.	photocopy of printout of E-mail dated 13th day of February’ 2013,	P8	71
12.	photocopy of the Letter being Ref. no. IDBI.SCB. No. 9284 / Recovery ( GKTPL ), dated 13th February’ 2013, issued by the Respondent Bank,	P9	72
13.	photocopy of the representation of your petitioner dated 21st day of February’ 2013,	P10	73, 74,
14.	photocopy of Copy of Second Advertisement of Public Notice for Sale of Residential Flats at Kolkata, in respect of earlier subjected flat no. 1, dated 12th day of February’ 2013,	P11	75, 76,
15.	photo copy of the Letter dated 6th day of March’ 2013, made by your petitioner, and a copy of Letter being reference no. IDBI. SCB. No. 10286 / Recovery ( GKTPL ), dated 14th day of March’ 2013, issued by the Respondent Bank,	P12	77 To 85
16.	photocopy of e-mail during 2013-2015,	P13	86 To 121
17.	photocopy of Complaint to Ombudsman and reply thereof,	P14	122 To 133
18.	photocopy of the Complaint lodged with the Customer Service Department of RBI, and the Letter being reference no. 3735 / 13.23.15 / 2013-14, dated 02-01-2014,	P15	134 To 143
19.	Photocopy of RTI application made to IDBI Bank and reply thereof	P16	144 To 148
20.	photocopy of RTI application to CPIO, RBI, and reply thereof,	P17	149 To 175
21.	photocopy of the Order dated 10-09-2014, passed by the Hon’ble State Consumer Disputes Redressal Commission, West Bengal, in CC / 327 / 2014,	P18	176 To 178
22.	photo copy of Sale Deed, photocopy of Form 8 of the Companies Act’ 1956, and photocopy of valuation report of the respondent Bank,	P19	179 To 223

 

LIST OF DATES

 

31-10-2012	Publication or Notice for Sale of Residential Flats at Kolkata, made by the Respondent Bank, News Papers and on Web Site.
26-11-2012	Obtain Form – 1, and Form – 2, from the Respondent Bank
03-12-2012	Auction held by the Respondent Bank
03-12-2012	Demand Draft of Rs. 5,25,000/- ( Rupees Five Lakhs and Twenty Five Thousand ) only, given to the Respondent Bank
04-12-2012	Petitioner visited the respondent bank for documents on title of the subjected property
08-12-2012	Petitioner visited the respondent bank for documents on title of the subjected property
10-12-2012	Respondent Bank given the zerox copies of Sale Deed, valuation report of the Bank, Municipal tax receipt for the year 2009, only
11-12-2012	Petitioner requested to the respondent bank for a copy of sanctioned building plan
14-12-2012, 17-12-2012, 19-12-2012	Petitioner visited the respondent bank for relevant documents on title of the subjected property
20-12-2012	e-mail by the petitioner to the respondent bank
21-12-2012	The authorised officer of the respondent bank given last date for making full and final payments of bid amount
08-01-2013	Petitioner made representation to the respondent bank
21-01-2013	authorized officer served one Letter being Ref. no. IDBI.SCB No. 8916 / Recovery ( GKTPL ), dated 21st day of January’ 2013, upon your petitioner, and thereby asking for the payments of Rs. 59, 50,000/- ( Rupees Fifty Nine Lakhs and Fifty Thousand ) only, within a period of fifteen days, and also states that in the event of failure the EMD amount shall be forfeited without notice.
04-02-2013	Reply made by the petitioner
13-02-2013	e-mail by the petitioner for refund of EMD
13-02-2013	Respondent Bank through it’s letter denied to refund EMD to your petitioner
12-02-2013	Respondent Bank published second time sale notice on auction in respect of the subjected flat
21-02-2013	Petitioner made his representation to the respondent bank
06-03-2013	Petitioner made his representation to the respondent bank
09-02-2013 to 08-01-2014	Petitioner made several representation through email to the respondent bank
02-01-2014	Customer Service department of RBI acknowledge inability to resolve the issues of your petitioner
19-01-2014	RTI to CPIO of RBI by the petitioner
18-03-2014	Valuation report in respect of property given under reply
26-03-2014	RTI made by the petitioner to IDBI Bank Limited
29-04-2014	IDBI Bank admitted in reply that copy of sanctioned plan is not available with the Bank
2014	Application under Section 17 of the Consumer Protection Act’ 1986, filed before the Hon’ble State Consumer Disputes Redressal Commission, West Bengal, vide CC/ 327 / 2014
10-09-2014	Hon’ble State Commission dismissed CC/327/2014, being not admitted

 

POINTS OF LAW INVOLVED IN THIS INSTANT WRIT APPLICATION

 

I.             Whether the entire process is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they ought to shock the conscience of This Hon’ble Court.

 

II.           Whether the effect of Section 35 would be that the disposal of the secured assets would be in terms of the provisions of the SARFAESI Act.

 

 

III.          Whether the Bank have to exercise due diligence on the security before the same is put on sale for the reason to rule out fraud, if any perpetrated by borrower and to rule out that the property is free from any encumbrance. Multiple mortgages are created by single borrower with different Bankers/FI and the secured creditor may or may not be aware of the any encumbrance on the property despite conducting due diligence. In view of the uncertainty in secured creditor being unaware of any encumbrance on the date of inspection of the property by the purchaser, whether the auction of the secured creditor is immune from challenge while recourse to action under Section 13(4).

 

IV.         Whether Rule 8(5) of the Security Interest (Enforcement) Rule, 2002, the manner of sale of the immovable secured assets / property include : (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or (b) by inviting tenders from the public;(c) by holding public auction; or(d) by private treaty.

 

 

V.           Whether the relevant provision of Rule 8(6) of the Security Interest ( Enforcement ) Rules, 2002 which deals with the procedure for bringing the immovable secured assets for sale is extracted hereunder : "The authorised officer shall serve to the borrower a notice of thirty days for sale of the immovable assets under sub-rule (5) : Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or be holding pubic auction , the secured creditor shall cause a public notice in two leading newspapers one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include,-(a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor;(b) the secured debt for recovery of which the property is to be sold;(c) reserve price, below which the property may not be sold;(d) time and place of public action or the time after which sale by any other mode shall be completed;(e) depositing earnest money as may stipulated by the secured creditor;(f) any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property."

 

VI.         Whether Rule 8(6) makes it very clear as to what are the relevant particulars to be furnished in the sale notice, as per which the description of the property to be sold among other particulars including the details of the encumbrance and any other thing which authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property shall be known to the secured creditor by setting out the same in the public notice.  Any asset sold under the SARFAESI Act is sold on "as is where is" and "as is what is" basis unless specified otherwise. Sale under SARFAESI is governed by terms and conditions of sale forming part of the sale process.

 

 

VII.        Whether during the intervening period between the depositing of earnest money and till the balance sale consideration is paid, the auction bidder/purchaser after making part payment or full payment , may either demand to refund the amount from the authorised officer or request to cancel the sale if sale certificate is already issued on the ground that there exists encumbrance on the property or on the apprehension that title may not be proper and that the bank may not be competent to deliver possession of the auction property without encumbrance and free from any future litigation.

 

 

VIII.      Whether the provision of Section 55(1) of Transfer of Property Act, 1882, show that duty is cast upon the authorised officer to disclose to the auction purchaser any material defect in the title, failing which it could be construed that purchaser was misled.

 

IX.         Whether the SARFAESI Act/Rules would cast duty upon the Bank to furnish those encumbrances which are known to them on the property which are sold by them. However, Rule 8(6)(f) mandates additional duty on the authorised officer to make known to the bidders before auction any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property. Therefore, now the rule of caveat emptor is replaced by caveat venditor (seller beware) and when the Bank put the property on sale, they must show clear title to the said property.

 

 

X.           Whether the respondent Bank have misused the terms for “as is where is”. It was a deliberate concealment of legal position of the title and property. It is clear that at the inception only the intention of the respondent bank were to conceal the defective title and property. Therefore the advertisement “as is where is” created confusion in this present case. It is shows that the petitioner was interested in participating in the public auction and requested the respondent bank to provide the copies of the title deeds, sanction plan, and completion certificate for verification prior to the date of auction but the respondent bank did not provide it prior to the date of auction, and therefore the petitioner was unable to verify those such documents related to the property of subjection auction / bid.

 

XI.         Whether the action of the respondent bank in forfeiting the earnest money is an illegal act.

 

 

XII.       Whether the Respondent Bank performed the bid or auction in accordance with the prescribed Law i.e. The Securtitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002.

 

XIII.      Whether every executive or administrative action of the State or other statutory or public bodies is open to judicial scrutiny and the High Court or the Supreme Court can, in exercise of the power of judicial review under the Constitution, quash the executive action or decision which is contrary to law or is violative of fundamental rights guaranteed by the Constitution.

 

XIV.     Whether the expanding horizon of Article 14 read with other articles dealing with fundamental rights, every executive action of the Government or other public bodies, including instrumentalities of the Government, or those which can be legally treated as "Authority" within the meaning of Article 12, if arbitrary, unreasonable or contrary to law, is now amenable to the writ jurisdiction of this Court under Article 32 or the High Courts under Article 226 and can be validly scrutinized on the touchstone of the constitutional mandates.

 

XV.       Whether constitutional powers carry corresponding obligations with them, and this is the rule of law which regulates the operation of organs of the Governments functioning under the Constitution.

 

XVI.     Whether Government functions through its officials and so long they are acting bona fide in pursuance of Government policy the Government cannot be permitted to disown it as a citizen can have no means to know if what was being done was with tacit approval of the Government.

 

XVII.    Whether it is a settled principle of law that in contractual relations, the State does not stand on the same forting as a private person and the State, in exercise of its various functions, is governed by the mandate of Article 14, which excludes arbitrariness in State Actions and requires the State to act fairly and reasonably and the State has to satisfy this criterion.