AFR

Neutral Citation No. - 2025:AHC:9933-DB

Court No. - 39

Case :- WRIT - C No. - 2228 of 2025

Petitioner :- Anil Pathak And Another

Respondent :- State Of U.P. And 4 Others

Counsel for Petitioner :- Brijesh Kumar Kesharwani,Mamta Singh

Counsel for Respondent :- A.S.G.I.,Anoop Tiwari,C.S.C.,Krishna

Mohan Asthana

Hon'ble Siddhartha Varma, J.

Hon'ble Dr. Yogendra Kumar Srivastava, J.

(Per: Dr Yogendra Kumar Srivastava, J)

1.Instructions provided by Sri Prakhar Shukla, learned Advocate,

holding brief of Sri Ramesh Kumar Shukla, learned counsel for the

respondent-Bank, be kept on record.

2.Heard Sri Brijesh Kumar Kesharwani, learned counsel for the

petitioners, Sri Prakhar Shukla, holding brief of Sri Ramesh Kumar

Shukla, learned counsel for the respondent-Bank and learned Standing

Counsel for the State-respondents.

3.The facts as pleaded in the writ petition indicate that House No.24,

Awas Vikas Colony Betiyahata, Gorakhpur, owned by Ujjwal Banka and

Tushar Banka, was mortgaged against a loan amount of Rs.1 Crore plus

Rs.20 Lakhs over draft.

4.The above mentioned loan amount, having not been repaid,

respondent no.3-Bank issued a notice under Section 13 (2) of the

Securitization and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002

1

. Thereafter, a possession notice under Section

13 (4) of the SARFAESI Act, 2002 was issued, and a newspaper

1SARFAESI Act, 2002

publication for auction of the above mentioned property was also made.

The auction date was fixed on 23.10.2024 and the petitioners, being the

only bidders were declared successful.

5.The petitioners deposited 25% of the auction money, amounting to

Rs.55,93,750/-, within the prescribed time period of 15 days. For

depositing the balance 75% of the auction money, the petitioners applied

for a loan from the respondent-Bank. The said application was rejected by

the respondent-Bank on 3.1.2025. It is stated that although the petitioners

have made a request for grant of three months’ further time for depositing

the balance 75% of the auction money, but the respondent-Bank is going

to auction the property on 22.1.2025.

6.The petitioners have, accordingly, preferred the present writ

petition, seeking a direction to respondent no.3-Bank for granting three

months’ further time for depositing the balance 75% of the auction money,

or to refund 25% amount deposited earlier, within a stipulated time

period.

7.Learned counsel for the petitioners has referred to the afore-stated

facts, to contend that the delay in depositing 75% of the auction money is

mainly due to rejection of the loan application of the petitioners by the

respondent-Bank, and accordingly, they have sought further three months’

time for the purpose. It is submitted that the Bank is seeking to re-auction

the property which would gravely prejudice their interests.

8.Learned counsel for the petitioner has placed reliance upon a

decision of this Court in Writ-C No.2196 of 2019 (Gaurav Garg vs.

Syndicate Bank and others), which was disposed of, following the

judgment in the case of GM, Sri Siddeshwara Cooperative Bank Ltd.

and another vs. Sri Ikbal and others

2

.

9.Learned counsel appearing for the respondent-Bank has submitted

that as per his instructions, the petitioners, who were declared highest

2(2013) 10 SCC 83

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bidders in the online auction held on 23.10.2024, upon having deposited

25% of the bid amount, were advised to deposit the remaining 75% of the

bid amount by 7.11.2024. However, considering their request vide letter

dated 5.11.2024, the Bank granted extension of time till 6.12.2024.

Thereafter, by means of another representation dated 2.12.2024, the

petitioners sought further extension of time till 7.1.2025, stating their

difficulty in arranging the funds. Considering the said request, the Bank

further allowed extension of time for depositing of the remaining sale

amount till 27.12.2024. It is stated that instead of depositing the balance

sale amount within the extended time period, the petitioners submitted

another representation on 22.12.2024, seeking further extension of time

upto 7.2.2025.

10.It has been submitted that as per the request received from the

petitioners vide representation dated 22.12.2024, the competent authority

of the Bank had granted further extension of time till 23.1.2025, as final

opportunity for depositing the remaining balance. It has been pointed out

that the Bank has duly sent a communication dated 18.1.2025 to the

petitioners, with an advise to deposit the remaining sale amount of

Rs.1,67,81,250.00, not later than 23.1.2025 failing which, the initial

deposit of Rs.55,93,750.00 shall be forfeited to the Bank and the said

property shall be re-sold.

11.Learned counsel for the Bank has submitted that the auction sale

has been conducted as per the provisions of the SARFAESI Act, 2002 and

Rules made thereunder, and in terms thereof, it is to be a time bound

process and no extension can be granted to the auction purchaser beyond

the time period stipulated under the relevant statutory rules. Further, in

default of payment of entire sale amount within the stipulated time period,

the deposit made by the auction purchaser is to be forfeited to the secured

creditor-Bank.

12.In order to examine the rival contentions, the relevant statutory

provisions would be required to be referred.

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13.The SARFAESI Act, 2002 was enacted to regulate securitisation

and reconstruction of financial assets and enforcement of security interest

and to provide for a central database of security interests created on

property rights, and for matters connected therewith or incidental thereto.

14.The Statement of Objects and Reasons of the Act reads as under:

“STATEMENT OF OBJECTS AND REASONS

The financial sector has been one of the key drivers in India's efforts to

achieve success in rapidly developing its economy. While the banking

industry in India is progressively complying with the international

prudential norms and accounting practices there are certain areas in

which the banking and financial sector do not have a level playing field

as compared to other participants in the financial markets in the world.

There is no legal provision for facilitating securitisation of financial

assets of banks and financial institutions. Further, unlike international

banks, the banks and financial institutions in India do not have power to

take possession of securities and sell them. Our existing legal

framework relating to commercial transactions has not kept pace with

the changing commercial practices and financial sector reforms. This

has resulted in slow pace of recovery of defaulting loans and mounting

levels of non-performing assets of banks and financial institutions.

Narasimham Committee I and II and Andhyarujina Committee

constituted by the Central Government for the purpose of examining

banking sector reforms have considered the need for changes in the

legal system in respect of these areas. These Committees, inter alia,

have suggested enactment of a new legislation for securitisation and

empowering banks and financial institutions to take possession of the

securities and to sell them without the intervention of the court. Acting

on these suggestions, the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Ordinance, 2002 was

promulgated on the 21st June, 2002 to regulate securitisation and

reconstruction of financial assets and enforcement of security interest

and for matters connected therewith or incidental thereto. The

provisions of the Ordinance would enable banks and financial

institutions to realise long-term assets, manage problem of liquidity,

asset liability mismatches and improve recovery by exercising powers

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to take possession of securities, sell them and reduce non-performing

assets by adopting measures for recovery or reconstruction."

15.The history and the legislative backdrop that led to the enactment of

the SARFAESI Act was examined in the case of Mardia Chemical Ltd.

vs. Union of India

3

, and it was observed as follows:

“34.Some facts which need to be taken note of are that the banks and

the financial institutions have heavily financed the petitioners and other

industries. It is also a fact that a large sum of amount remains

unrecovered. Normal process of recovery of debts through courts is

lengthy and time taken is not suited for recovery of such dues. For

financial assistance rendered to the industries by the financial

institutions, financial liquidity is essential failing which there is a

blockade of large sums of amounts creating circumstances which retard

the economic progress followed by a large number of other

consequential ill effects. Considering all these circumstances, the

Recovery of Debts Due to Banks and Financial Institutions Act was

enacted in 1993 but as the figures show it also did not bring the desired

results. Though it is submitted on behalf of the petitioners that it so

happened due to inaction on the part of the Governments in creating

Debts Recovery Tribunals and appointing presiding officers, for a long

time. Even after leaving that margin, it is to be noted that things in the

spheres concerned are desired to move faster. In the present-day global

economy it may be difficult to stick to old and conventional methods of

financing and recovery of dues. Hence, in our view, it cannot be said

that a step taken towards securitisation of the debts and to evolve means

for faster recovery of NPAs was not called for or that it was

superimposition of undesired law since one legislation was already

operating in the field, namely, the Recovery of Debts Due to Banks and

Financial Institutions Act. It is also to be noted that the idea has not

erupted abruptly to resort to such a legislation. It appears that a thought

was given to the problems and the Narasimham Committee was

constituted which recommended for such a legislation keeping in view

the changing times and economic situation whereafter yet another

Expert Committee was constituted, then alone the impugned law was

enacted. Liquidity of finances and flow of money is essential for any

healthy and growth-oriented economy. But certainly, what must be kept

in mind is that the law should not be in derogation of the rights which

are guaranteed to the people under the Constitution. The procedure

should also be fair, reasonable and valid, though it may vary looking to

the different situations needed to be tackled and object sought to be

achieved.”

16.In this context, certain observations made in the decision in the case

of United Bank of India vs. Satyawati Tandon

4

, may also be referred to.

The said observations are as follows:

3(2004) 4 SCC 311

4(2010) 8 SCC 110

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“1. … With a view to give impetus to the industrial

development of the country, the Central and State Governments

encouraged the banks and other financial institutions to formulate

liberal policies for grant of loans and other financial facilities to those

who wanted to set up new industrial units or expand the existing units.

Many hundred thousand took advantage of easy financing by the banks

and other financial institutions but a large number of them did not repay

the amount of loan, etc. Not only this, they instituted frivolous cases

and succeeded in persuading the civil courts to pass orders of injunction

against the steps taken by banks and financial institutions to recover

their dues. Due to lack of adequate infrastructure and non-availability of

manpower, the regular courts could not accomplish the task of

expeditiously adjudicating the cases instituted by banks and other

financial institutions for recovery of their dues. As a result, several

hundred crores of public money got blocked in unproductive ventures.”

17.Section 13 of the SARFAESI Act contains the provisions relating to

the enforcement of the security interest and the manner in which the same

may be done by the secured creditor without the intervention of the court

or tribunal in accordance with its provisions.

18.The procedural formalities to be followed for the sale of immovable

secured assets as per Section 13 of the SARFAESI Act is provided under

Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002

5

.

19.The controversy involved in the present case would relate to sub-

rule (4) of Rule 9 which provides for a time period within which, the

balance amount of the purchase price payable by the auction purchaser is

to be paid. For ease of reference, Rule 9 of the Rules, 2002 is extracted

below:

“9.Time of sale, issue of Sale Certificate and delivery of

possession, etc. – (1) No sale of immovable property under these rules,

in first instance 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:

Provided further that if sale of immovable property by any one

of the methods specified by sub rule (5) of rule 8 fails and sale is

required to be conducted again, the authorised officer shall serve, affix

and publish notice of sale of not less than fifteen days to the borrower,

for any subsequent sale.

5Rules, 2002

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(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 8:

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, i.e. on the same day or not later than next working day, as

the case may be, pay a deposit of twenty five per cent. of the amount of

the sale price, which is inclusive of earnest money deposited, if any, to

the authorized officer conducting the sale and in default of such deposit,

the property shall 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 purchaser and the

secured creditor, in any case not exceeding three months.

(5)In default of payment within the period mentioned in sub-rule

(4), the deposit shall be forfeited to the secured creditor 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 power 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.

(7)Where the immovable property sold is subject to any

encumbrances, the authorized officer may, if he thinks fit, allow the

purchaser to deposit with him the money required to discharge the

encumbrances and any interest due thereon together with such

additional amount that may be sufficient to meet the contingencies or

further cost, expenses and interest as may be determined by him:

Provided that if after meeting the cost of removing

encumbrances and contingencies there is any surplus available out of

the money deposited by the purchaser such surplus shall be paid to the

purchaser within fifteen days from the date of finalisation of the sale.

(8)On such deposit of money for discharge of the encumbrances,

the authorised officer shall issue or cause the purchaser to issue notices

to the persons interested in or entitled to the money deposited with him

and take steps to make the payment accordingly.

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(9)The authorised officer shall deliver the property to the purchaser

free from encumbrances known to the secured creditor on deposit of

money as specified in sub-rule (7) above.

(10)The certificate of sale issued under sub-rule (6) shall specifically

mention that whether the purchaser has purchased the immovable

secured asset free from any encumbrances known to the secured

creditor or not.”

20.Rule 9 of the Rules, 2002 relates to the time of sale, issue of sale

certificate and delivery of possession etc. Public notice of sale is to be

published in the newspaper and only after thirty days thereafter, the sale

of immovable property can take place. Under Rule 9 (2) of the 2002

Rules, the sale is required to be confirmed in favour of the purchaser who

has offered the highest sale price to the authorised officer and shall be

subject to confirmation by the secured creditor. The proviso makes it clear

that sale under the said Rule would be confirmed if the amount offered

and the whole price is not less than the reserved price as specified in Rule

9 (5).

21.Rule 9 (3) makes it clear that on every sale of immovable property,

the purchaser on the same day or not later than next working day, has to

make a deposit of twenty-five per cent of the amount of the sale price,

which is inclusive of earnest money deposited if any. Rule 9 (4) makes it

clear that balance amount of the purchase price payable shall be paid by

the purchaser to the authorised 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 purchaser and the secured

creditor.

22.The liability of a successful auction purchaser to deposit the

requisite amount begins from the date when the sale is confirmed by the

secured creditor and communicated to the auction purchaser and as per

sub-rule (3) of Rule 9 of the Rules, 2002, twenty five per cent amount of

auction price has to be deposited, as earnest money, no later than next

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working day from the date of confirmation of sale and the balance amount

within 15 days from the said date.

23.As per terms of sub-rule (3) of Rule 9 of the Rules, 2002, as it

originally existed, 15 days time period for depositing of the balance 75%

of the purchase price was extendable for a period, as may be agreed upon

in writing between the parties. For ease of reference, sub-rule (4) of Rule

9 of the Rules, 2002, as it originally existed, is reproduced below:

“(4)The balance amount of purchase price payable shall be paid by

the purchaser to the authorised 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.”

24.Sub-rule (4) of Rule 9 of the Rules, 2002 was subsequently

amended vide GOI Notification No.GSR 1046 (E) dated 3.11.2026 and

clause (iv) of Rule 7 of the Security Interest (Enforcement) (Amendment)

Rules, 2002 reads as under:

“(iv) in sub-rule (4), for the words “as may be agreed upon in writing

between the parties”, the words, “as may be agreed upon in writing

between the purchaser and the secured creditor, in any case not

exceeding three months” shall be substituted.”

25.Subsequent to the aforesaid amendment, sub-rule (4) of Rule 9 of

the Rules, 2002, now reads as under:

“(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 purchaser

and the secured creditor, in any case not exceeding three months.”

(emphasis supplied)

26.The effect of the amendment to sub-rule (4) of Rule 9 of the Rules,

2002 is that the fifteen days time period for depositing of the balance

amount of the purchase price by the purchaser would be extendable upon

agreement in writing between the purchaser and the secured creditor, for a

period not exceeding three months in any case.

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27.Rule 9 (4) of the Rules, 2002 was examined in the decision in

Union Bank of India vs. Rajat Infrastructure (P) Ltd.

6

, wherein in was

clarified that the balance amount of the purchase price has to be paid by

the auction purchaser to the Authorized Officer on or before the fifteenth

day of confirmation of sale or such extended period as may be agreed

upon in writing between the purchaser and the secured creditor, in any

case not exceeding three months. It was observed that even the plenary

powers of the Supreme Court under Article 142 of the Constitution could

not be invoked to supplant the substantive law, ignoring the express

statutory provisions dealing with the subject and thereby to achieve

something indirectly, which could not be achieved directly. It was

observed as follows:

27.As discernible from the aforestated sub-rule (4) of Rule 9, the

balance amount of purchase price payable by the purchaser to the

authorised officer has to be paid 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 purchaser and the

secured creditor, in any case not exceeding three months. Sub-rule (5)

thereof states that in default of payment within the period mentioned in

sub-rule (4), the deposit shall be forfeited to the secured creditor and the

property shall be resold, and that defaulting purchaser shall forfeit all

claim to the property or to any part of the sum for which it may be

subsequently sold. As per sub-rule (6) thereof, on the confirmation of

sale by the secured creditor and if the terms of payment have been

complied with, the authorised officer exercising the power of sale

would issue a certificate of sale of the immovable property in favour of

the purchaser in the form prescribed under the Rules.

28.The provisions contained in sub-rules (4) and (5) of Rule 9 of the

Rules, 2002, came up for consideration in the decision in the case of

Authorized Officer, State Bank of India vs. C. Natarajan

7

, wherein it

was observed that a discretion is available to the Authorized Officer of the

secured creditor for extension of time for depositing the balance

consideration, but not exceeding the prescribed limit of ninety days. The

objective and necessity of enactment of the powers of forfeiture of

deposited amount of the secured creditor under sub-rule (5) was also

6(2023) 10 SCC 232

7(2024) 2 SCC 637

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explained by pointing out that the legislature had visualized that there was

a need to arrest cases of deceptive manipulation of prices at the instance

of unscrupulous borrowers by thwarting sale processes. It was observed

that the purpose of the provision was aimed at instilling a sense of

discipline in the intending purchasers while they proceed to participate in

the auction-sale process. Relevant observations made in the judgment in

this regard are as follows:

27.In the current era of globalisation, the entire philosophy of

society, mainly on the economic front is making rapid strides towards

changes. Unscrupulous people have been inventing newer modes and

mechanisms for defrauding and looting the nation. It is in such a

scenario that provisions of enactments, particularly those provisions

which have a direct bearing on the economy of the nation, must receive

such interpretation so that it not only fosters economic growth but is

also in tune with the intention of the law-makers in introducing a

provision such as sub-rule (5) of Rule 9, which though harsh in its

operation, is intended to suppress the mischief and advance the remedy.

If indeed Section 73 and Section 74, which are part of the general law

of contract, were sufficient to cater to the remedy, the need to make

sub-rule (5) of Rule 9 as part of the Rules might not have arisen.

Additionally, insertion of sub-rule (5) with such specificity regarding

forfeiture must not have been thought of only for reiterating what is

already there. It was visualised by the law-makers that there was a need

to arrest cases of deceptive manipulation of prices at the instance of

unscrupulous borrowers by thwarting sale processes and this was the

trigger for insertion of such a provision with wide words conferring

extensive powers of forfeiture. The purpose of such insertion must have

also been aimed at instilling a sense of discipline in the intending

purchasers while they proceed to participate in the auction-sale process.

28.At the cost of repetition, it must not be forgotten that the

SARFAESI Act was enacted because the general laws were not found to

be workable and efficient enough to ensure liquidity of finances and

flow of money essential for any healthy and growth-oriented economy.

The decision of this Court in Mardia Chemicals Ltd. v. Union of India

[Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311] , while

outlawing only a part of the SARFAESI Act and upholding the rest, has

traced the history of this legislation and the objects that Parliament had

in mind in sufficient detail. Apart from the law laid down in such

decision, these are the other relevant considerations which ought to be

borne in mind while examining a challenge to a forfeiture order.

29.There is one other aspect which is, more often than not, glossed

over. In terms of sub-rule (5) of Rule 9, generally, forfeiture would be

followed by an exercise to resell the immovable property. On the date

an order of forfeiture is in contemplation of the authorised officer of the

secured creditor for breach committed by the bidder, factually, the

position is quite uncertain for the former in that there is neither any

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guarantee of his receiving bids pursuant to a future sale, much to the

satisfaction of the secured creditor, nor is there any gauge to measure

the likely loss to be suffered by it (secured creditor) if no bidders were

interested to purchase the immovable property. Since the extent of loss

cannot be immediately foreseen or calculated, such officers may not

have any option but to order forfeiture of the amount deposited by the

defaulting bidder in an attempt to recover as much money as possible so

as to reduce the secured debt. That the immovable property is later sold

at the same price or at a price higher than the one which was offered by

the party suffering the forfeiture is not an eventuality that occurs in each

and every case. Sections 73 and 74 of the Contract Act would not,

therefore, be sufficient to take care of the interest of the secured creditor

in such a case and that also seems to be another reason for bringing in

the provision for forfeiture in Rule 9. Ordinarily, therefore, validity of

an order of forfeiture must be judged considering the circumstances that

were prevailing on the date it was made and not based on supervening

events.

33.The upshot of the aforesaid discussion is that whenever a

challenge is laid to an order of forfeiture made by an authorised officer

under sub-rule (5) of Rule 9 of the Rules by a bidder, who has failed to

deposit the entire sale price within ninety days, the tribunals/courts

ought to be extremely reluctant to interfere unless, of course, a very

exceptional case for interference is set up. What would constitute a very

exceptional case, however, must be determined by the tribunals/courts

on the facts of each case and by recording cogent reasons for the

conclusion reached.

34.Insofar as challenge to an order of forfeiture that is made upon

rejection of an application for extension of time prior to expiry of

ninety days and within the stipulated period is concerned, the scrutiny

could be a bit more intrusive for ascertaining whether any patent

arbitrariness or unreasonableness in the decision-making process has

had the effect of vitiating the order under challenge. However, in course

of such scrutiny, the tribunals/courts must be careful and cautious and

direct their attention to examine each case in some depth to locate

whether there is likelihood of any hidden interest of the bidder to stall

the sale to benefit the defaulting borrower and must, as of necessity,

weed out claims of bidders who instead of genuine interest to

participate in the auctions do so to rig prices with an agenda to

withdraw from the fray post conclusion of the bidding process. In

course of such determination, the tribunals/courts ought not to be

swayed only by supervening events like a subsequent sale at a higher

price or at the same price offered by the defaulting bidder or that the

secured creditor has not in the bargain suffered any loss or by

sentiments and should stay at a distance since extending sympathy,

grace or compassion are outside the scope of the relevant legislation.

35.In any event, the underlying principle of least intervention by

tribunals/courts and the overarching objective of the SARFAESI Act duly

complemented by the Rules, which are geared towards efficient and

speedy recovery of debts, together with the interpretation of the relevant

laws by this Court should not be lost sight of. Losing sight thereof may

not be in the larger interest of the nation and susceptible to interference.

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29.The objective and the background under which stringent

consequences for default have been provided were taken note of in the

decision in the case of Authorized Officer, State Bank of India (supra),

and it was observed as follows:

“24.…Drawing from our experience on the Bench, it can safely be

observed that in many a case the borrowers themselves, seeking to

frustrate auction sales, use their own henchmen as intending purchasers

to participate in the auction but thereafter they do not choose to carry

forward the transactions citing issues which are hardly tenable. This

leads to auctions being aborted and issuance of fresh notices. Repetition

of such a process of participation-withdrawal for a couple of times or

more has the undesirable effect of rigging of the valuation of the

immovable property. In such cases, the only perceivable loss suffered

by a secured creditor would seem to be the extent of expenses incurred

by it in putting up the immovable property for sale. However, what does

generally escape notice in the process is that it is the mischievous

borrower who steals a march over the secured creditor by managing to

have a highly valuable property purchased by one of its henchmen for a

song, thus getting such property freed from the clutches of mortgage

and by diluting the security cover which the secured creditor had for its

loan exposure. Bearing in mind such stark reality, sub-rule (5) of rule 9

cannot but be interpreted pragmatically to serve twin purposes - first, to

facilitate due enforcement of security interest by the secured creditor

(one of the objects of the SARFAESI Act); and second, to prohibit

wrong doers from being benefitted by a liberal construction thereof.”

30.In the case, at hand, the petitioners having participated in the

auction held on 23.10.2024, and having deposited 25% of the bid amount

on the said date, were required to deposit the remaining 75% of the

purchase price before the fifteenth day of the sale confirmation, i.e. by

7.11.2024. However, upon request being made by the petitioners on

5.11.2024, the Bank granted extension of time till 6.12.2024. Another

representation dated 2.12.2024 was submitted by the petitioners, seeking

extension of time till 7.1.2025, stating their difficulty in arrangement of

funds. The said request was also acceded to by the Bank and further

extension of time was allowed to deposit the balance sale price till

27.12.2024. The petitioner made yet another representation dated

22.12.2024, seeking further extension of time upto 7.2.2025, which was

turned down by the Bank on the ground that no extension could be

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granted to the auction purchaser beyond the time period stipulated under

the statutory rules.

31.There is no material on record, which may persuade this Court to

come to a conclusion that there has been any manifest arbitrariness or

unreasonableness on the part of the respondent-Bank in not acceding the

repeated requests of the petitioners for depositing of the balance 75%

amount of the bid amount beyond the time period stipulated under sub-

rule (4) of Rule 9 of the Rules, 2002. The maximum permissible limit of

three months, as provided under the relevant statutory rules, having

already been granted by the secured creditor, there is no plausible reason

which may warrant issuance of any direction for further extension of time

period, as sought by the petitioners.

32.It may be reiterated as a settled principle of law that when a statute

requires a particular thing to be done in a particular manner, it must be

done in that manner or not at all, and other methods of performance are

necessarily forbidden. (See: Taylor v. Taylor, (1875) LR 1 Ch D 426;

Nazir Ahmad vs. King Emperor, AIR 1936 PC 253 (2); Rao Shiv

Bahadur Singh v. State of Vindhya Pradesh, (1954) 1 SCC 296; State of

UP v. Singhara Singh, AIR 1964 SC 358; Babu Verghese v. Bar Council

of Kerala, (1990) 3 SCC 422; Municipal Corporation of Greater

Mumbai vs. Abhilash Lal (2020) 13 SCC 234 and Nareshbhai

Bhagubhai vs. Union of India, (2019) 15 SCC 1.

33.Rule 9 (4) of the Rules, 2002, as amended with effect from

4.11.2016, contains an ordainment that on mutual agreement, the time for

making deposit of the balance amount of sale price can be extended for a

period not exceeding ninety days; however, extension beyond ninety days

would not be permissible in any case.

34.The decision in the case of GM, Sri Siddeshwara Cooperative

Bank Ltd. (supra), followed in the subsequent decision of Gaurav Garg

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(supra), which are sought to be relied on behalf of the petitioners, were

rendered in the context of the unamended Rule 9 (4) of the Rules, 2002,

wherein there was no outer limit provided for extension of the time period

for depositing of the balance amount of 75% of the purchase price. The

said authorities cannot be relied upon by the petitioners to claim further

extension of time beyond the outer limit prescribed under sub-rule (4) of

Rule 9 of the Rules, 2002, as it now exists.

35.The secured creditor is entitled in law to enforce the security

interest and in the process, to initiate all such steps and take all such

measures for the protection of public interest by recovering public money

lent to a borrower, who has defaulted in its repayment. The petitioners

(auction purchasers), having participated in the auction, would be

presumed to be fully aware of the requirements under the law with regard

to deposit of the purchase price and also that in case of any default or

failure on their part to make the payment of the sale price within the

permissible time period under the relevant statutory rules, would entail

forfeiture of the deposit already made by them.

36.Looking to the objectives for which, the SARFAESI Act, 2002 has

been enacted, Courts have taken a consistent view that in such a situation,

where a bidder has failed to deposit the entire sale price within the

stipulated period of ninety days, the tribunal/court would be extremely

reluctant to interfere, unless of course, a very exceptional case for

interference is made out. The underlying principle of least intervention by

the tribunal/courts and the overriding objective of the SARFAESI Act and

the Rules made thereunder, which are for speedy recovery of debt, cannot

be lost sight of.

37.We do not see any patent arbitrariness or unreasonableness on the

part of the respondent-Bank, which may persuade us to entertain the writ

petition in respect of the reliefs sought.

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38.The writ petition lacks merit and is, accordingly, dismissed.

Order Date :- 21.1.2025

Arun K. Singh/RKK/-

(Dr Y K Srivastava, J) (Siddhartha Varma, J)

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