Security Interest (Enforcement) Rules, 2002 – r.9(4), (5) – When not applicable:
Held: The period to deposit the balance sale consideration under r.9(4) is not absolute/sacrosanct and is extendable with the consent in writing of the parties – r.9(4) will only come into play when there is default on part of the party i.e. the auction purchaser to deposit the amount and will not apply where there is no default or that the default, if any, lies upon the auctioneer i.e. appellant-Bank in the present case – Respondents were always ready and willing to deposit the balance auction amount, no material on record to justify non-acceptance of the balance sale consideration from the respondents within 15 days of the confirmation of the sale – Silence on part of the appellant in either immediately revoking the sale confirmation or refusing to extend the time as sought by the respondents, impliedly amounted to extension of time in writing with consent – Reason for the non-issuance of the sale certificate was solely attributable to it – Since there were no latches, negligence or default on part of the respondents in offering to deposit the balance auction amount, non-deposit of the said amount within the stipulated period would not be fatal within the meaning of sub-Rules (4) and (5) of r.9 – Unilateral cancellation of the auction sale without any notice or opportunity of hearing to the respondents was per se in violation of the principles of natural justice and was illegal – In the peculiar facts and circumstances of the case, High Court did not commit any error in holding that the appellant-Bank erred in cancelling the auction sale and in directing to issue sale certificate/register the sale deed in favour of the respondents after getting the balance auction amount deposited within four weeks. [Paras 18-22]
Practice and Procedure – Appellant-Bank cancelled the auction sale vide communication dated 24.12.2019 without referring to the default, if any, by the respondents in depositing the balance auction amount as per r.9(4) – Said plea was taken by the appellant for the first time through the counter affidavit filed in the writ petition filed by the respondents-auction purchasers before the High Court – Impermissibility: Held: Validity of an order can only be adjudged on the basis of the reasoning contained in the order and the said reasoning cannot be supplemented in any manner much less by means of a counter affidavit or a supplementary affidavit when the parties have entered into a litigation – Parties cannot raise new pleas not contained in the order impugned while assailing the correctness or the validity of such an order – Thus, the appellant-Bank was not entitled to raise the plea of default u/r.9(4) through the counter affidavit. [Para 12]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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