LexIDBI BANK LTD. versus RAMSWAROOP DALIYA AND ORS.
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[2024] 10 S.C.R. 1371 : 2024 INSC 780 IDBI Bank Ltd. v. Ramswaroop Daliya and Ors. (Civil Appeal Nos. 11115-11116 of 2024) 16 October 2024 [Pankaj Mithal* and R. Mahadevan, JJ.] Issue for Consideration Whether there was any default on part of the respondents-auction purchasers in depositing the balance auction amount within the time prescribed pursuant to the auction sale so as to attract Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 and allow the appellant-Bank to cancel the auction which had already been confirmed. Headnotes† 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 * Author 1372 [2024] 10 S.C.R. Digital Supreme Court Reports 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] Case Law Cited Union Bank of India v. Rajat Infrastructure Private Limited and 14 Others [2023] 14 SCR 666 : (2023) 10 SCC 232 – held inapplicable. Mohinder Singh Gill & Anr. v. Chief Election Commissioner and Ors. [1978] 2 SCR 272 : (1978) 1 SCC 405; Varimadugu Obi Reddy v. Sreenivasulu and Ors. [2022] 16 SCR 1108 :(2023) 2 SCC 168; General Manager, Sri Siddeshwara Cooperative Bank Ltd. and Anr. v. Ikbal and Ors. [2013] 8 SCR 532 : (2013) 10 SCC 83 – relied on. List of Acts Security Interest (Enforcement) Rules, 2002. List of Keywords E-auction; Auction sale; Auction purchasers; Default; Depositing the balance auction amount; Balance sale consideration; Auctioneer; [2024] 10 S.C.R. 1373 IDBI Bank Ltd. v. Ramswaroop Daliya and Ors. Sale confirmation revoked; Extension of time in writing with consent; Latches; Negligence; Correspondence between the parties; Unilateral cancellation of the auction sale; Sale certificate; Non-issuance of the sale certificate; Principles of natural justice; Auction sale cancelled; Counter affidavit
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