The respondent bank, as a secured creditor, put a property for e-auction. The property located at Maker Tower, Cuffe Parade, Colaba, Mumbai to be sold on “AS IS WHERE IS, AS IS WHAT IS AND WHATEVER THERE IS BASIS”. Encumbrance on the property as per notice is “Property is free from encumbrances”.
After paying 25% auction money petitioner comes to know that, collector NOC not obtained as property is situated on collector land. Petitioner contended that, auction notice was misleading as auction was proposed to be held without obtaining Collector NOC. Respondent ignoring the petitioner’s demand for NOC forfeited the 25% amount paid. Hence present writ petition is filed.
Advocate for respondent bank alleged that, present Writ is not maintainable as petitioner has to approach DRT under SARFAESI Act. Further the transfer charges required to be paid for collector NOC by purchaser as the property is auctioned on “as is where is” basis. Since the transfer charges not paid the bank has rightly forfeited the 25% auction money paid.
Court observed that, petitioner did not pleaded alleging infringement of specific fundaments rights of the petitioner. However nature of the pleaded case and arguments advanced making out a case of illegal, arbitrary and high handed action on the part of bank offending Art. 14 of the Constitution. About forfeiture of auction money, court held that, auction could not be initiated without prior permission of Collector. The process of sale having commenced without NOC of collector is breach of law. Action of the bank in forfeiture of auction money is absolutely illegal, arbitrary, highhanded and ultra vires to Art. 14. Hence court order respondent to refund the forfeited amount.
Pravin Patil vs. State Bank of India, W.P.no.867/2020, Mumbai