# Rakesh Birani (Since Deceased) & Anr v. Prem Narain Singahl & Anr

- **Citation:** (2016) 5 ILRA 1736
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-05-06
- **Bench:** V.K. Shukla, Vivek Kumar Birla
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/rakesh-birani-since-deceased-anr-v-prem-narain-singahl-anr-43813
- **Pages:** 11

## Headnote

Para 1: Appellants (heirs of auction purchaser Rakesh Birani) challenge a Single Judge's order affirming the
DRT and DRAT decisions, which invalidated a property sale for non-compliance with Rule 9(4).
Para 2: A firm defaulted on a PNB loan; the account was declared NPA in 2005. The bank initiated SARFAESI
proceedings, issued a Section 13(2) notice, took possession in 2006, and finally held an e-auction in 2013.
Para 3: Rakesh Birani won the bid on 14.02.2013. He paid 25% immediately. The bank accepted the bid via
letter on 27.02.2013, and he paid the remaining 75% on 13.03.2013. The borrower challenged the sale.
Para 4: DRT set aside the sale, and DRAT/Single Judge affirmed it. The appellants now seek a final disposal
through this special appeal.
Para 5: Appellants argue that the 15-day period for the balance 75% should start from the date of the
written confirmation letter (27.02.2013), making their 13.03.2013 payment timely.
5 All. Rakesh Birani (Since Deceased) & Anr. Vs Prem Narain Singahl & Anr.

1737
Para 6: Respondents argue the statutory provisions were correctly applied by lower courts and no
interference is needed.
Paras 7-10: The Court reviews Section 13 of the SARFAESI Act, detailing the bank's power to enforce
security interests, take possession, and transfer assets to recover debts.
Para 11: The Court quotes Rule 9, highlighting that 25% must be paid "immediately" and the balance 75%
"on or before the fifteenth day of confirmation of sale."
Paras 12-13: The core issue is identified: Does "confirmation" mean the acceptance of the highest bid by
the Authorized Officer (on auction day) or a subsequent formal letter?
Paras 14-15: The Court interprets Rule 9. It rules that "confirmation of sale" for the purpose of the 15-day
deadline refers to the moment the Authorized Officer accepts the highest bid. This prevents
manipulation or arbitrary delays by bank officers.
Para 16: Citing the Supreme Court in Shree Sidheshwar Cooperative Bank, the Court notes that while the 15day period is extendable, it requires a written tripartite agreement between the bank, borrower, and
purchaser.
Para 17: The Supreme Court precedent confirms Rule 9(1) and 9(3) are mandatory, while 9(4) allows
extension only through specific mutual assent in writing.
Paras 18-19: The Court clarifies there are two stages: (1) Confirmation by the Authorized Officer (starts the
15-day clock) and (2) Confirmation by the Secured Creditor (leads to the Sale Certificate).
Para 20: The Court finds the auction notice explicitly stated the 15-day rule. Since the bid was accepted on
14.02.2013, the payment on 13.03.2013 was past the legal deadline.
Para 21: The Court dismisses the appeal, ruling that strict adherence to the SARFAESI Rules is mandatory;
any deviation nullifies the sale.
Appeal dismissed.

Case Laws Cited:-
General Manager, Shree Sidheshwar Cooperative Bank Ltd. and another Vs. Iqbal and others,
2013 (10) SCC 83.
Mathew Verghese Vs. M. Amrita Kumar, 2014 (5) SCC 610.
Phoenix Arc. Pvt. Ltd. Vs. Ishan Systems Pvt. Ltd. and another (DRAT, 24.1.2012).
Sushen Medicamentos Pvt. Ltd. Vs. Ashok Enterprise, AIR 2012 Guj 26.
State of M.P. Vs. Sardarmal, AIR 1987 Madhya Pradesh 156.

## Text

1736 INDIAN LAW REPORTS ALLAHABAD SERIES
in possession of his two sons, namely, Ram Shanker and Ghasi Ram s/o late Shri Badri by way of
succession.

27. During the pendency of the present writ petition, opposite party no.2/Ram Shanker son
of late Badri died and by order dated 24.02.2012 writ petition stood as abated against him,
confirmed by Hon'ble the Apex Court in Special Leave to Appeal (Civil) No.17842/2012. So, order
dated 01.10.1993 passed by Deputy Director of Consolidation, District-Harodi in revision under
challenge in the present writ petition attained finality against opposite party no.2/Ram Shanker.
Once it is not in dispute, rather admitted position that the impugned order is no separable and on
the basis of which the chak has been altered and the writ petition stood abated against opposite
party no.3. So, the same is also liable to be dismissed as abated against the opposite party no.3.

28. For the foregoing reasons, the writ petition is dismissed as abated.
-----------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.05.2016

BEFORE

THE HON'BLE V.K. SHUKLA, J.
THE HON'BLE VIVEK KUMAR BIRLA, J.

Special Appeal No.- 955 Of 2014

Rakesh Birani (Since Deceased) & Anr. ...Appellants
Versus
Prem Narain Singahl & Anr. ...Respondents

Counsel for the Appellants:
Shri Rohan Gupta

Counsel for the Respondents:
Shri Vikram D. Chauhan, Shri Sanjay Singh

Held -

Para 1: Appellants (heirs of auction purchaser Rakesh Birani) challenge a Single Judge's order affirming the
DRT and DRAT decisions, which invalidated a property sale for non-compliance with Rule 9(4).
Para 2: A firm defaulted on a PNB loan; the account was declared NPA in 2005. The bank initiated SARFAESI
proceedings, issued a Section 13(2) notice, took possession in 2006, and finally held an e-auction in 2013.
Para 3: Rakesh Birani won the bid on 14.02.2013. He paid 25% immediately. The bank accepted the bid via
letter on 27.02.2013, and he paid the remaining 75% on 13.03.2013. The borrower challenged the sale.
Para 4: DRT set aside the sale, and DRAT/Single Judge affirmed it. The appellants now seek a final disposal
through this special appeal.
Para 5: Appellants argue that the 15-day period for the balance 75% should start from the date of the
written confirmation letter (27.02.2013), making their 13.03.2013 payment timely.
5 All. Rakesh Birani (Since Deceased) & Anr. Vs Prem Narain Singahl & Anr.

1737
Para 6: Respondents argue the statutory provisions were correctly applied by lower courts and no
interference is needed.
Paras 7-10: The Court reviews Section 13 of the SARFAESI Act, detailing the bank's power to enforce
security interests, take possession, and transfer assets to recover debts.
Para 11: The Court quotes Rule 9, highlighting that 25% must be paid "immediately" and the balance 75%
"on or before the fifteenth day of confirmation of sale."
Paras 12-13: The core issue is identified: Does "confirmation" mean the acceptance of the highest bid by
the Authorized Officer (on auction day) or a subsequent formal letter?
Paras 14-15: The Court interprets Rule 9. It rules that "confirmation of sale" for the purpose of the 15-day
deadline refers to the moment the Authorized Officer accepts the highest bid. This prevents
manipulation or arbitrary delays by bank officers.
Para 16: Citing the Supreme Court in Shree Sidheshwar Cooperative Bank, the Court notes that while the 15day period is extendable, it requires a written tripartite agreement between the bank, borrower, and
purchaser.
Para 17: The Supreme Court precedent confirms Rule 9(1) and 9(3) are mandatory, while 9(4) allows
extension only through specific mutual assent in writing.
Paras 18-19: The Court clarifies there are two stages: (1) Confirmation by the Authorized Officer (starts the
15-day clock) and (2) Confirmation by the Secured Creditor (leads to the Sale Certificate).
Para 20: The Court finds the auction notice explicitly stated the 15-day rule. Since the bid was accepted on
14.02.2013, the payment on 13.03.2013 was past the legal deadline.
Para 21: The Court dismisses the appeal, ruling that strict adherence to the SARFAESI Rules is mandatory;
any deviation nullifies the sale.
Appeal dismissed.

Case Laws Cited:-
General Manager, Shree Sidheshwar Cooperative Bank Ltd. and another Vs. Iqbal and others,
2013 (10) SCC 83.
Mathew Verghese Vs. M. Amrita Kumar, 2014 (5) SCC 610.
Phoenix Arc. Pvt. Ltd. Vs. Ishan Systems Pvt. Ltd. and another (DRAT, 24.1.2012).
Sushen Medicamentos Pvt. Ltd. Vs. Ashok Enterprise, AIR 2012 Guj 26.
State of M.P. Vs. Sardarmal, AIR 1987 Madhya Pradesh 156.

(Delivered by Hon'ble V.K. Shukla, J.)

1. Smt. Sadhana Birani w/o Late Rakesh Birani as well as Ridhee Sidhee Birani d/o Late
Rakesh Birani through her mother natural guardian and next friend Smt. Sadhana Birani
representing the interest of Rakesh Birani (since deceased) are before this Court assailing the
validity of the judgment and order passed by the learned Single Judge on 9.7.2014 in Writ Petition
No. 27483 of 2014, Rakesh Birani (since deceased) & two others Vs. Prem Narain Sehgal &
another, wherein learned Single Judge has dismissed the writ petition and affirmed the order passed
by the Debt Recovery Tribunal (hereinafter referred to as the 'DRT') dated 19.12.2013 and Debt
Recovery Appellate Tribunal (hereinafter referred to as the 'DRAT') dated 21.3.2014 by holding
that sale was vitiated on account of non-compliance of Rule 9 (4) of Security Interest
(Enforcement) Rules, 2002 (hereinafter referred to as the 'Rules 2002').

2. Brief background of the case is that a firm in the name and style of Mangall Prasad Lav
Kumar had taken loan from the Punjab National Bank and accepted position is that loan account of
1738 INDIAN LAW REPORTS ALLAHABAD SERIES
the said firm has been running irregular and unsatisfactory and the bank concerned in its turn has
been sending reminders after reminders for regularizing the loan account but all efforts taken by the
bank went in vein and then when the firm in question eventually failed to pay the debts and
instalments due and the account of the said firm in respect of such debts were classified by the bank
as Non Performing Asset (NPA) on 30.6.2005 in consonance with the directions/guidelines issued
by the Reserve Bank of India. The bank in question, thereafter, proceeded to enforce the security
interest created in favour of borrowers as well as guarantors in accordance with the provisions of
the Securtisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002 (hereinafter referred to as the '2002 Act'). The bank concerned issued notice dated 23.7.2005
under Section 13 (2) of the 2002 Act asking the borrowers in writing to discharge in full their
liabilities giving details of amount payable by them within sixty days from the date of said notice,
the said notice also gives detail of secured asset intended to be enforced by the secure creditor in
the event of the non-payment of secured debt, as stated in the said notice. The borrower concerned
failed to respond to the said notice within the time frame provided for and then Authorised Officer
of the bank in purported exercise of authority under Section 13 (4) of the 2002 Act took possession
of the secured assets by means of notice dated 3.5.2006 and, thereafter, the bank concerned
published possession notice on 10.6.2006 in two widely circulated newspapers and, thereafter, the
bank in question proceeded with the process of auction and in the said direction exercise was
undertaken by publishing the last auction notice on 6.1.2013 as on the earlier occasions the
property in question has not been sold several times due to the lack of purchaser.

3. The property in question was put up for auction by the bank by e-mode auction and in
the said auction Rakesh Birani, husband of petitioner appellant no. 1 and father of appellant no. 2
participated and in the said auction proceedings held on 14.2.2013 his bid was found highest and
the bank accepted his bid vide letter dated 27.2.2013 and also acknowledged 25% of the bid
amount to the tune of Rs. 9,60,500/- and simultaneously directed that balance bid amount of Rs.
28,69,500/- should be paid by him within 15 days from the date of e-auction. Husband of petitioner
appellant no. 1 was also informed that after receiving of full payment the bank will issue sale
certificate to the said incumbent and it was also made clear that said acceptance of sale is subject to
confirmation by the bank as secured creditor. The balance amount in question was paid on
13.3.2013. This much is also reflected from the record in question that at the point of time when
pursuant to the said sale transaction an attempt was made to take possession of the property in
question, then the borrowers preferred Writ Petition No. 20653 of 2013 before this Court
challenging the auction notice as well as auction, expressing their readiness to pay the amount in
instalments. The said writ petition in question was not entertained by this Court on the premises
that petitioners have equal efficacious remedy under the 2002 Act to approach DRT for their
grievances. Pursuant to the said dismissal, Prem Narain Sahgal, the borrower, has instituted
Securitisation Application No. 133 of 2013 before the DRT wherein the bank as well as auction
purchaser resisted the claim but DRT has proceeded to set-aside the auction sale vide its order
dated 19.12.2013. Against the same appeal in question has been preferred before the DRAT and the
appeal in question has also been dismissed on 21.3.2014. Both these orders passed by the DRT and
DRAT respectively impelled the petitioner appellant to be before the learned Single Judge of this
Court in Writ Petition No. 27483 of 2014 and the learned Single Judge of this Court has also
5 All. Rakesh Birani (Since Deceased) & Anr. Vs Prem Narain Singahl & Anr.

1739
ratified the two decisions, so taken by the DRT and DRAT, and against the said decision, as
already indicated above, present special appeal in question has been filed before this Court.

4. In the present case counter affidavit and rejoinder affidavit has been filed by the parties
to the dispute and, thereafter, with the consent of parties present special appeal has been taken up
for final hearing and disposal.

5. Sri Rohan Gupta, learned counsel for the petitioner appellants, submitted with
vehemence that in the present case DRT, DRAT as well as learned Single Judge have totally
misread and misconstrued the statutory provisions, that holds the field of auction, as well as
evidences available on record, inasmuch as, the sale in question has been confirmed vide letter
dated 27.2.2013 issued by the Authorised Officer of the secured creditor and in such a situation the
deposit made within 15 days period started running from the date of confirmation of sale by the
Authorised Officer and, in view of this, each and every term and condition, as is provided for, stood
fulfilled by the petitioner appellants then sale in question should not have been set-aside, as has
been done in the present case. Submission has also been made that 75% of the amount has been
deposited within 15 days from the date of confirmation of sale and once the statutory provisions
has not at all been read and understood in its correct perspective, the judgement and order passed
by the learned Single Judge is liable to be quashed and set-aside and present special appeal
deserves to be allowed by this Court.

6. Sri Vikram D. Chauhan, Advocate, on the other hand, contended that rightful view has
been taken in the matter and statutory provisions has been rightfully construed and, accordingly,
this Court should not at all interfere and intervene in the matter.

7. Before we deal with the issues, we may briefly refer to the relevant provisions of the
Securitization Act and the Rules made thereunder. Chapter III of the Act deals with Enforcement of
Security Interest. Sub-section (1) of Section 13 provides that any security interest created in favour
of any secured creditor may be enforced without the intervention of the Court or Tribunal by such
creditor in accordance with the provisions of the Act. Sub-section (2) of Section 13 provides that
where a borrower makes any default in repayment of secured debt and where the account in respect
of such debt is classified by the secured creditor as a non-performing asset, the secured creditor
may require the borrower by notice in writing to discharge in full his liabilities to the secured
creditor within sixty days from the date of notice failing which the secured creditor shall be entitled
to exercise all or any of the rights under sub-section (4). Sub-section (4) provides that where the
borrower has failed to discharge his liability in full within the period specified in sub-section (2),
the secured creditor may take recourse to one or more measures of the following to recover his
secured debt, namely,: (a) take possession of the secured assets of the borrower including the right
to transfer by way of lease, assignment or sale for realizing the secured asset; (b) take over the
management of the business of the borrower including the right to transfer by way of lease,
assignment or sale for realizing the secured asset; (c) appoint any person to manage the secured
assets where possession has been taken by secured creditor; (d) requires notice in writing, any
person who has acquired any of the secured assets from the borrower and from whom any money is
1740 INDIAN LAW REPORTS ALLAHABAD SERIES
due or may become due to the borrower, to pay secured creditor, so much of money as is sufficient
to pay the secured debt.

8. Sub-section (5) of Section 13 provides that any payment made by any person referred to
in clause (d) of Sub-section (4) to the secured creditor shall give such person a valid discharge as if
he has made payment to the borrower. Sub-section (6) of Section 13 provides that;

"(6) Any transfer of secured asset after taking possession thereof or take over of
management under sub-section (4), by the secured creditor or by the manager on behalf of the
secured creditor shall vest in the transferee all rights in, or in relation to, the secured asset
transferred as if the transfer had been made by the owner of such secured asset."

 Sub-section (7) of Section 13 provides that;

"(7) Where any action has been taken against a borrower under the provisions of
sub-section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have
been properly incurred by him or any expenses incidental thereto, shall be recoverable from the
borrower and the money which is received by the secured creditor shall, in the absence of any
contract to the contrary, be held by him in trust, to be applied, firstly, in payment of such costs,
charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue
of the money so received shall be paid to the person entitled thereto in accordance with his rights
and interests."

 Sub-section (8) of Section 13 provides for:

"(8) If the dues of the secured creditor together with all costs, charges and
expenses incurred by him are tendered to the secured creditor at any time before the date fixed for
sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no
further step shall be taken by him for transfer or sale of the secured asset."

9. In exercise of powers conferred by Sub-section (1) and clause (b) of Sub-section (2) of
Section 38 read with Sub-section (4), (10) and (12) of Section 13 of the SARFESI Act, 2002,
Central Government has framed the Rules known as the Security Interest (Enforcement) Rules,
2002. Rule 9 of the Rules deals with time of sale, issue of sale certificate and delivery of possession
etc. Rule 9 to the extent relevant reads as under:

"9. Time of sale, issues of sale certificate and delivery of possession, etc.- (1)
No sale of immovable property under the rules shall take place before the expiry of thirty days from
the date on which the public notice of sale is published in newspapers as referred to in the proviso
to sub-rule (6) of Rule 8 or notice of sale has been served to the borrower.
5 All. Rakesh Birani (Since Deceased) & Anr. Vs Prem Narain Singahl & Anr.

1741
(2) The sale shall be confirmed in favour of the purchaser who has offered the
highest sale price in his bid or tender or quotation or offer to the authorized officer and shall be
subject to confirmation by the secured creditor.

Provided that no sale under this rule shall be confirmed, if the amount offered by
sale price is less than the reserve price, specified under sub-rule (5)of Rule 9.

Provided further that if the authorized officer fails to obtain a price higher than the
reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at
such price.

(3) On every sale of immovable property, the purchaser shall immediately pay a
deposit of twenty-five per cent of the amount of the sale price, to the authorized officer conducting
the sale and in default of such deposit, the property shall forthwith be sold again.

(4) The balance amount of purchase price payable shall be paid by the purchaser to
the authorized officer on or before the fifteenth day of confirmation of sale of the immovable
property or such extended period as may be agreed upon in writing between the parties.

(5) In default of payment within the period mentioned in sub-rule (4), the deposit
shall be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim
to the property or to any part of the sum for which it may be subsequently sold.

(6) On confirmation of sale by the secured creditor and if the terms of payment
have been complied with, the authorized officer exercising the powers of sale shall issue a
certificate of sale of the immovable property in favour of the purchaser in the Form given in
Appendix V to these rules."

10. On the parameters of the statutory provisions, that have been quoted above and the
arguments advanced, the core issue is pertaining to as to what would be the starting point of time
for counting of period of 15 days for depositing of remaining 75%?

11. In pith and substance the issue involved in the present appeal is pertaining to
interpretation of Rule 9 (4) of the 2002 Rules. On one hand from the side of petitioner appellants it
is being sought to be contended that 15 days period for depositing of 75% amount has to be
counted from the date when the sale was confirmed in favour of petitioner appellants and contrarily
from the other side it is being submitted that the amount in question for depositing of 75% of
remaining amount has to be accepted from the date when sale has taken place and bid has been
accepted.

12. The rules in question have to be examined by us keeping in view the respective
perspective sought to be placed by both the parties. A bare perusal of the scheme in question, as is
contained under Rule 9 would go to show that Rule 9 (1) clearly proceeds to make a mention that
1742 INDIAN LAW REPORTS ALLAHABAD SERIES
no sale of immovable property under the rules shall take place before the expiry of thirty days from
the date on which the public notice of sale is published in newspapers as referred to in the proviso
to sub-rule (6) of Rule 8 or notice of sale has been served to the borrower. Sub Rule (2) of Rule 9
provides for the sale shall be confirmed in favour of the purchaser who has offered the highest sale
price in his bid or tender or quotation or offer to the authorized officer and shall be subject to
confirmation by the secured creditor.

13. Two provisos have been added to the same (1) no sale under this rule shall be
confirmed, if the amount offered by sale price is less than the reserve price, specified under subrule (5)of Rule 9 and (2) further that if the authorized officer fails to obtain a price higher than the
reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at
such price. Sub Rule (2) of Rule 9 thus clearly talks of confirmation of sale in favour of purchaser
who has offered the highest sale price in his bid or tender or quotation or offer to the Authorized
Officer and this confirmation has to be subject to confirmation by the secured creditor, in view of
this, Sub Rule (2) of Rule 9 clearly denotes the situation that confirmation made by the Authorised
Officer in favour of purchaser who has offered the highest sale price in his bid or tender or
quotation or offer is subject to the confirmation made by the secured creditor and this confirmation
is also subject to the caveat, that has been provided for in both the provisos, that have been referred
to above. Sub Rule (3) of Rule 9 clearly obligates the purchaser that after every sale of immovable
property, the purchaser shall immediately pay a deposit of 25% of the amount of the sale price to
the Authorized Officer conducting the sale and in default of such deposit, the said property has to
be sold again.

14. Such a situation clearly reflects that on the spot when the process of auction sale is
there and the bid in question is confirmed by the Authorised Officer, then 25% amount has to be
paid then and there. For payment of balance amount, Sub Rule (4) of Rule 9 comes into play that
provides for the balance amount of purchase price payable to be paid by the purchaser to the
Authorized Officer on or before the 15th day of confirmation of sale of the immovable property or
such extended period as may be agreed upon in writing between the parties. This is clearly
indicating the fact that once the bid, that has been so offered, has been accepted, immediately
thereafter 25% of the amount has to be deposited, said exercise is clearly in consonance with Rule
9 (2) that talks of confirmation of sale in favour of incumbent who has offered the highest sale
price and then the balance amount of purchase price has to be paid by the purchaser to the
Authorized Officer on or before the 15th day of confirmation of sale of the immovable property or
such extended period as may be agreed upon in writing between the parties. Balance amount of the
sale price is payable by the purchaser to the Authorised Officer on or before 15th day of
confirmation of sale of the immovable property or such extended period as may be agreed upon in
writing between the parties. Confirmation of sale contextually, in the present case, at the first
instance, would refer to purchaser whose bid has been finally accepted by the Authorised Officer
on account of offering highest sale price, and once he has deposited 25% of the sale amount then
rest has to be deposited within 15 days from the same. Said period of 15 days cannot be extended
by any means by the Authorised Officer. Confirmation of sale by the Authorised Officer has to be a
fixed point, otherwise the net result would be that after deposit of 25% of sale amount, the
5 All. Rakesh Birani (Since Deceased) & Anr. Vs Prem Narain Singahl & Anr.

1743
Authorised Officer will have the discretion and prerogative to keep the matter pending in the name
of confirmation of sale and then award 15 days time to make deposit. Such is not at all
purport/intent of the Rules to give Authorised Officer a free rope in the matter. Any other view of
the matter would make the provision or such extended period as may be agreed upon in writing
between the parties redundant and otios and will give room for manipulation and manoeuvring.
After expiry of period of 15 days, time can be extended if there is a tripartite arrangement made in
between the bank, the borrower and the auction purchaser. This particular provision has been
subject matter of interpretation by the Apex Court in the case of General Manager Shree
Sidheshwar Cooperative Bank Ltd. And another Vs. Iqbal and others, 2013 (10) SCC 83, and
in para 17 and 18 thereof, it has said as under:

"17. Rule 9 provides for the detailed procedure with regard to sale of immovable
property including issuance of sale certificate and delivery of possession. Sub-rule (1) of Rule 9
states that no sale of immovable property shall take place before the expiry of 30 days from the
date on which the public notice of sale is published in newspapers as referred to in the proviso to
Sub-rule (6) or notice of sale has been served to the borrower. Sub-rule (2) provides that sale shall
be confirmed in favour of the purchaser who has offered the highest sale price in his bid. This is
subject to confirmation by the secured creditor. There is a proviso appended to Sub-rule (2) which
provides that no sale under this rule shall be confirmed if the amount offered by sale price is less
than the reserve price but this is relaxable in view of the second proviso appended to Sub-rule (2).
Sub-rule (3) lays down that on every sale of immovable property, the purchaser shall immediately
make the deposit of 25% of the amount of the sale price. In default of such deposit, the property
shall forthwith be sold again. Sub-rule (4) provides that the balance amount of purchase price
payable shall be paid by the purchaser on or before the fifteenth day of confirmation of sale of the
immovable property or such extended period as may be agreed upon in writing between the parties.
Sub-rule (5) makes a provision that if the balance amount of purchase price is not paid as required
under Sub-rule (4), then the deposit shall be forfeited and the property shall be resold and the
defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may
be subsequently sold. According to Sub-rule (6), on confirmation of sale by the secured creditor
and if the terms of payment have been complied with, the authorised officer exercising power of
sale shall issue a certificate of sale of the immoveable property in favour of the purchaser in the
form given in Appendix V to the 2002 Rules.

18. A reading of Sub-rule (1) of Rule 9 makes it manifest that the provision is
mandatory. The plain language of Rule 9(1) suggests this. Similarly, Rule 9(3) which provides that
the purchaser shall pay a deposit of 25% of the amount of the sale price on the sale of immovable
property also indicates that the said provision is mandatory in nature. As regards balance amount of
purchase price, Sub-rule (4) provides that the said amount shall be paid by the purchaser on or
before the fifteenth day of confirmation of sale of immovable property or such extended period as
may be agreed upon in writing between the parties. The period of fifteen days in Rule 9(4) is not
that sacrosanct and it is extendable if there is a written agreement between the parties for such
extension. What is the meaning of the expression 'written agreement between the parties' in Rule
9(4)? 2002 Rules do not prescribe any particular form for such agreement except that it must be in
1744 INDIAN LAW REPORTS ALLAHABAD SERIES
writing. The use of term 'written agreement' means a mutual understanding or an arrangement
about relative rights and duties by the parties. For the purposes of Rule 9(4), the expression
"written agreement" means nothing more than a manifestation of mutual assent in writing. The
word 'parties' for the purposes of Rule 9(4) we think must mean the secured creditor, borrower and
auction purchaser."

15. A bare perusal of the aforementioned judgment would go to show that Rule 9 provides
for detailed procedure with regard to sale of immovable property including issuance of sale
certificate and delivery of possession and this judgment also proceeds to make a mention that Sub
Rule (1) of Rule 9 is mandatory in character but as far as Sub Rule (4) of Rule 9 is concerned the
period of fifteen days is not that sacrosanct and it is extendable if there is a written agreement
between the parties for such extension. What is the meaning of the expression 'written agreement
between the parties' has also bee interpreted that it must be in writing between the parties i.e.
secured creditor, borrower and auction purchaser. Sub Rule (5) of Rule 9 clearly proceeds to make
a mention that in default of payment within the period mentioned in Sub Rule (4), the deposit shall
be forfeited and the property shall be resold and the defaulting purchaser shall forfeit all claim to
the property or to any part of the sum for which it may be subsequently sold. Sub Rule (6) of Rule
9 proceeds to mention that confirmation of sale by the secured creditor and if the terms of payment
have been complied with, the Authorized Officer exercising the powers of sale shall issue a
certificate of sale of the immovable property in favour of the purchaser in the form given in
Appendix V to these rules. The issuance of sale certificate has to be accepted by an exercise
provided for under Sub Rule (6) that there has to be an order of secured creditor and verifications
have also been made of the terms and conditions as to whether the terms of payment has been
complied with and then after such verification the Authorised Officer exercising the power of sale
is entitled to issue a certificate of sale.

16. Under the scheme of things provided for this much is clear and explicit that
confirmation of sale as referred under Sub Rule (2) of Rule 9 is in reference of authorised
representative and confirmation of sale as referred to under Sub Rule 6 of Rule 9 is a confirmation
of sale by the secured creditor. Sale, at the first instance, has to be confirmed in favour of purchaser
who has offered the highest sale price in his bid or tender or quotation or offer to the authorized
officer and this confirmation is not final as, as per Sub Rule (2) of Rule 9 it has to be subject to the
confirmation of the secured creditor. Thus there are two stages of confirmation that has been
provided for under Rule 9, the first stage of the confirmation is by the Authorised Officer in favour
of purchaser who has offered the highest sale price in his bid or tender or quotation or offer to the
Authorised Officer as on every sale of immoveable property, the purchaser is obligated to deposit
25% of the amount of sale price. The moment highest offer is accepted followed by deposit of 25%
of the amount of sale price, it has to be accepted as confirmation of sale at the first stage by the
authorised representative. Fifteen days period would start running from the said point of time.
Deposit of balance amount has to be made within fifteen days from the said confirmation of sale.
Said fifteen days period is mandatorily required to be complied with and in given set of
circumstances with the consent of all the parties, said period can be extended. Second stage arises
for confirmation of sale by the secured creditor only when the terms of payment has been complied
5 All. Rakesh Birani (Since Deceased) & Anr. Vs Prem Narain Singahl & Anr.

1745
with. The Authorised Officer is obligated to issue sale certificate. Reading of Rule 9 in any other
manner would defeat the entire scheme of things provided for.

17. Thus, in the present case, entire action is in consonance with the aforementioned
statutory provisions. The record in question reflects that advertisement in question was issued in
newspaper Danik Jagran notifying e-auction to be carried out on on 14.2.2013. One of the
condition in the auction notice reads as under:

"सिल बोलीकताव को विक्रय मूजय का 25 प्रनतित EMD रालि के समायोजन के उपरान्त 48 घंटे के अंदर जमा
करना होगा, िेि 75 प्रनतित उसे 15 ददन या उसके अंदर या उसके पूिव या प्रागधकृत अगधकारी द्िारा ललखखत रूप से बढ़ाई गई समय
सीमा के अंदर जमा करना होगा। सिल बोलीकताव के द्िारा भ गतान में असिल रहने की जस्थनत में उसके द्िारा जमा रालि जब्त कर
ली जाएगी और समाजप्त को दोबारा नीलाम फकया जाएगा, सम्पवत्त को दोबारा नीलाम फकया जाएगा, संपवत्त/ रकम पर उसका कोई
क्लेम नहीं होगा।"

18. The e-auction was carried out and the bid submitted by the husband of appellant no. 1
was found to be highest and on the said date within the time frame provided for 25% of the bid
amount was deposited and vide letter dated 27.2.2013 petitioner was informed that balance bid
amount of Rs. 28,69,500/- shall be paid by him within 15 days. The communication dated
27.2.2013 is being unnecessarily read as confirmation of sale whereas the fact of the matter is that
once petitioner was given permission to make deposit of 25% balance bid amount, then it has to be
accepted as confirmation of sale and within 15 days from the said date husband of appellant no. 1
was obligated to make entire deposit. The auction notice has been in strict consonance of the
statutory provisions and as the amount in question admittedly has not been deposited within 15
days of the confirmation of auction sale by the authorised representative, rightly the DRT, DRAT
and learned Single Judge of this Court have proceeded to construe the statutory provisions and have
proceeded to non-suit the claim in question, in view of this, the fact of the matter is that payment
made on 13.3.2013 was not at all in accordance with the Rule 9 (4) of the Rules. Rule 9 (4) cannot
be read in the manner, as it has been so suggested, and said provision gives way for extension of
time but there has to be written document in between the secured creditor, the borrower and auction
purchaser failing which the amount in question has to be deposited within 15 days from the date of
auction sale, inasmuch as, under the scheme of things, in case, once claim of highest bidder is
accepted, the 25% amount has to be deposited forthwith and balance amount within 15 days from
the said date, as such, opinion formed, in the present case, does not suffer from any infirmity. Once
we have carefully scrutinized the statutory provisions and the record of present case, the judgment
relied on by the petitioner decided by DRAT on 24.1.2012 in the case of Phoenix Arc. Pvt. Ltd.
Vs. Ishan Systems Pvt. Ltd. and another in Misc. Appeal Nos. 456 & 457 of 2011, the judgment
of Gujarat High Court in Sushen Medicamentos Pvt. Ltd. Vs. Ashok Enterprise, Proprietorship
firm of Ashok P. Desai & 2 others, Special Civil Application No. 5622 of 2011, AIR 2012 Guj
26, decided on 3.8.2011, as well as the judgment of High Court of M.P. In the case of State of
M.P. Vs. Sardarmal, AIR 1987 Madhya Pradesh 156, are not at all contextually relevant and in
no way would improve the case of petitioner appellant. Apex Court in the case of Mathew
Verghese Vs. M. Amrita Kumar, 2014 (5) SCC 610, has made it clear that sale of secured asset
1746 INDIAN LAW REPORTS ALLAHABAD SERIES
by secured creditor has to be in consonance with SARFESI Act, 2002 and 2002 Rules and has to be
strictly complied with, failing which, the sale would be nullified.

19. Special appeal sans merit and same is dismissed, accordingly.
-----------
REVISIONAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 05.05.2016

BEFORE

THE HON'BLE SUNEET KUMAR, J.

Criminal Revision No.- 1167 Of 2016

Mahesh Kumar & Ors. ...Revisionists
Versus
State Of U.P. & Anr. ...Opposite Parties

Counsel for the Revisionists:
Shri Ved Prakash Shukla

Counsel for the Opposite Parties:
G.A., Shri Shwetashwa Agarwal

Held -
The revisionist challenged an order by the Chief Judicial Magistrate, Sant Kabir Nagar, which rejected a
discharge application filed under Section 245(1) Cr.P.C. in a warrant case instituted via complaint. The
revisionist argued that the Magistrate erroneously rejected the application by acting beyond the jurisdictional
scope of the provision. The Court, however, clarified the distinct procedural hierarchies between Section
245(1) and Section 245(2). It noted that under Section 245(1), a Magistrate considers discharge after the
prosecution leads evidence in the presence of the accused (under Section 244), allowing for crossexamination. Conversely, Section 245(2) allows for discharge at any "previous stage" if the accusations are
deemed "groundless" even before evidence is recorded.
Upon reviewing the record, the Court found that the revisionist had indeed appeared, and the prosecution had
produced evidence under Section 244, including the cross-examination of the informant. Therefore, the
Magistrate's decision to evaluate the evidence and refuse discharge was legally sound and within the proper
procedural stage. Finding no jurisdictional error or infirmity in the lower court's reasoning, the High Court
dismissed the revision petition.
Revision dismissed

Case Laws Cited:-

Sunil Mehta and another Vs. State of Gujarat and another, 2013 (9) SCC 209
Cricket Association of Bengal and others Vs. State of West Bengal and others, AIR 1971 SC 1925
S.K. Alagh Vs. State of U.P. and others, AIR 2008 SC 1731
Century Spg. And Mfg. Co. Ltd. Vs. State of Maharashtra, (1972) 3 SCC 282 : 1972 SCC (Cri) 495
Ajoy Kumar Ghose Vs. State of Jharkhand and another, (2009) 14 SCC 115