Admittedly, the facts noticed hereinabove were not
disclosed to the intending bidders in the E-auction notice
dated 01.03.2016. A bidder would not intend to buy litigation with the
property, which may ensue between the Bank and the Housing Board.
The petitioner has specifically pleaded that on 24.04.2016 he filed an
application for providing a copy of NOC/permission, if any, granted by
the Housing Board for sale of the property in question. The averments
in paragraph no. 18 of the writ petition has been reiterated in
paragraph no. 5(o) of the memorandum of the instant appeal, however,
this assertion has not been controverted by the respondent-Bank. The
Bank has taken a position that there was no pleading in the writ
petition to the effect that while preparing for deposit of the balance bid
amount the petitioner came to know about the aforesaid illegality,
however, in view of the pleadings in the writ petition, particularly in
paragraph no. 18, the defects in the sale notice cannot be ignored.
There is no warrant of the proposition that illegality which would go to
the root of the auction sale must have been discovered by an auction
purchaser during the auction sale and a fact which would vitiate the
auction sale, if discovered subsequently, cannot be taken note of.
Knowledge to the petitioner about nature of the property put on auction
sale, even after the concluded sale, can be looked into to examine the
legality of the sale notice and the auction sale. The fact that the sale
notice was issued on “as is where is basis”, “as it is where it is
basis” and “whatever there is basis”, would not attach legality to the
auction sale inasmuch as, knowledge of the defect in property cannot
be imputed to an intending purchaser. Such covenants cannot
overcome the fatal defect in auction notice and the auction conducted
by suppressing vital informations must be held illegal.
16. The Bank was under a duty to disclose all relevant
facts including, the fact that the property put on auction sale was a
lease-hold property and it belongs to the Housing Board. This is a
basic requirement of fair play in action and more so, in case of a Public
Sector Bank. The auction sale which proceeded on a
misrepresentation to the intending bidders is definitely illegal and is
liable to be quashed. The terms and conditions of an illegal auction
sale cannot be enforced by the respondent-Bank, and accordingly
Clause-13 of E-auction notice which provides forfeiture of the amount
deposited by successful bidder in the event of failure to deposit the bid
amount within the stipulated time cannot be resorted to by the
respondent-Bank to forfeit EMD and 25% of the bid amount deposited
by the appellant. Dismissal of the writ petition on the ground that the
appellant-writ petitioner himself invoked jurisdiction of this Court
seeking a direction upon the Bank to confirm the sale and issue Sale
Certificate, is not justified. The writ petition was decided without
affording an opportunity to the Housing Board to file its response, as is
apparent from the proceeding in W.P.(C) No.2181 of 2016, which was10.
disposed of on the very first day of hearing. In view of the objection
raised by the Housing Board to the auction sale of its property, the
direction issued by the Writ Court to the respondent Bank to take steps
for execution of lease in the name of the appellant is also rendered
erroneous. Considering the aforesaid facts, we are of the opinion that
the impugned order dated 26.04.2016 passed in W.P.(C) No.2181 of
2016 suffers from serious error in law.
IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No. 220 of 2016
Kumar Rohit,
V
Allahabad Bank,
CORAM: MR. JUSTICE VIRENDER SINGH, CHIEF JUSTICE
MR. JUSTICE SHREE CHANDRASHEKHAR
Dated:26th July, 2016.
Citation: AIR 2017 Jharkh 65
Print Page
disclosed to the intending bidders in the E-auction notice
dated 01.03.2016. A bidder would not intend to buy litigation with the
property, which may ensue between the Bank and the Housing Board.
The petitioner has specifically pleaded that on 24.04.2016 he filed an
application for providing a copy of NOC/permission, if any, granted by
the Housing Board for sale of the property in question. The averments
in paragraph no. 18 of the writ petition has been reiterated in
paragraph no. 5(o) of the memorandum of the instant appeal, however,
this assertion has not been controverted by the respondent-Bank. The
Bank has taken a position that there was no pleading in the writ
petition to the effect that while preparing for deposit of the balance bid
amount the petitioner came to know about the aforesaid illegality,
however, in view of the pleadings in the writ petition, particularly in
paragraph no. 18, the defects in the sale notice cannot be ignored.
There is no warrant of the proposition that illegality which would go to
the root of the auction sale must have been discovered by an auction
purchaser during the auction sale and a fact which would vitiate the
auction sale, if discovered subsequently, cannot be taken note of.
Knowledge to the petitioner about nature of the property put on auction
sale, even after the concluded sale, can be looked into to examine the
legality of the sale notice and the auction sale. The fact that the sale
notice was issued on “as is where is basis”, “as it is where it is
basis” and “whatever there is basis”, would not attach legality to the
auction sale inasmuch as, knowledge of the defect in property cannot
be imputed to an intending purchaser. Such covenants cannot
overcome the fatal defect in auction notice and the auction conducted
by suppressing vital informations must be held illegal.
16. The Bank was under a duty to disclose all relevant
facts including, the fact that the property put on auction sale was a
lease-hold property and it belongs to the Housing Board. This is a
basic requirement of fair play in action and more so, in case of a Public
Sector Bank. The auction sale which proceeded on a
misrepresentation to the intending bidders is definitely illegal and is
liable to be quashed. The terms and conditions of an illegal auction
sale cannot be enforced by the respondent-Bank, and accordingly
Clause-13 of E-auction notice which provides forfeiture of the amount
deposited by successful bidder in the event of failure to deposit the bid
amount within the stipulated time cannot be resorted to by the
respondent-Bank to forfeit EMD and 25% of the bid amount deposited
by the appellant. Dismissal of the writ petition on the ground that the
appellant-writ petitioner himself invoked jurisdiction of this Court
seeking a direction upon the Bank to confirm the sale and issue Sale
Certificate, is not justified. The writ petition was decided without
affording an opportunity to the Housing Board to file its response, as is
apparent from the proceeding in W.P.(C) No.2181 of 2016, which was10.
disposed of on the very first day of hearing. In view of the objection
raised by the Housing Board to the auction sale of its property, the
direction issued by the Writ Court to the respondent Bank to take steps
for execution of lease in the name of the appellant is also rendered
erroneous. Considering the aforesaid facts, we are of the opinion that
the impugned order dated 26.04.2016 passed in W.P.(C) No.2181 of
2016 suffers from serious error in law.
IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P.A. No. 220 of 2016
Kumar Rohit,
V
Allahabad Bank,
CORAM: MR. JUSTICE VIRENDER SINGH, CHIEF JUSTICE
MR. JUSTICE SHREE CHANDRASHEKHAR
Dated:26th July, 2016.
Citation: AIR 2017 Jharkh 65
