Jammu:In a landmark Judgement, Justice Sindhu Sharma of the High Court of Jammu and Kashmir and Ladakh, held that the bonafide purchaser of a property auctioned by a bank under the SARFAESI Act and Rules was entitled not only to the Sale Certificate but also to the physical possession of the property which was to be provided to him by the authorized officer.
While deciding a Writ Petition titled ‘S.K. Bakshi V/s PNB and others’, Justice Sharma, observed that the petitioner, despite paying a huge amount in the auction, has not been delivered the property.
As per the judgment, though the physical possession of the property need not be taken before being put to auction, the respondents cannot shirk from their duty to hand over the physical possession of the property to the auction purchaser.
Ordinarily, the sale would be complete on the receipt of the entire sale consideration and handing over the possession but in the present case it has been specifically mentioned in the sale certificate that the there is no encumbrance in the property, the petitioner could not be expected to know that the property is already in use by some persons.
“It was the responsibility of the respondent (Bank) to specify the encumbrance attached to the property which was there in their knowledge and having failed to do so, the respondent is duty bound to provide the physical possession of the property to the petitioner,” read an order.
The Court further observed that the third party who comes forward to purchase the secured asset must have a confidence that he would get the title to the property at the earliest.
If the transferring of the property by way of title is going to be delayed endlessly, then the object of the Act which is meant for speedy recovery would be defeated as a whole.
The Court while rejecting the stand of the private respondents that the Writ petition is not maintainable as the only remedy available to the petitioner is under section 17 of the SARFAESI Act, the Judge held that the petitioner is the auction purchaser of the property and cannot proceed under section 17 as it does not envisages any of the grounds enumerated in Section 13(4)
The Court also observed that the respondents ( no. 6 & 7) by breaking the locks of the bank and by forcefully entering have in fact committed trespass in the property.
After hearing Advocate Mandeep Reen for the petitioner, Advocate Parveen Kapahi for the respondent (Bank) and Advocate Sumir Pandita for the private respondents (trespassers), the Court directed, in view of the aforesaid discussion, the petition is allowed and respondent (bank) is directed to deliver the clear physical possession of the double story commercial building constructed on plot measuring 20’x 60’ on shop site no. 115 Phase-I Fruit Market Complex Na