Rule 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002 make it evident that there is no bar on the mode of payment through which a payment has to be tendered by the auction purchaser – Pahwa Buildtech Pvt. Ltd. Vs. Mr. Jagmohan Singh Arora & Ors. – Delhi High Court
June 7, 2022
Hon’ble High Court set aside decision of the DRAT and held that while dealing with a challenge to the auction of the secured asset, the question that needs to be asked and answered is whether there is any real prejudice suffered by the borrower due to adoption of the method complained of, as not being in conformity with the Rules. If there is any confusion amongst the two documents regarding the modalities for sale of the secured asset, the terms of sale of the secured assets that are in consonance with the relevant Rules, and which further the objective of the SARFAESI Act (i.e., to recover the dues of the secured creditor), must be preferred. If the auction purchaser tenders the cheque on the same day, or even the following day, it is to be presumed that he has the financial capacity to ensure that the cheque would be honoured upon presentation. Rule 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002 make it evident that there is no bar on the mode of payment through which a payment has to be tendered by the auction purchaser. Hence, the acceptance of cheque dated 01.09.2018 of the 15% amount, and encashment thereof by the respondent no.4 is in compliance with Rule 9(3) and Rule 9(4) of the Security Interest (Enforcement) Rules, 2002. Even if it were to be accepted that the respondent Nos.4 & 5 delayed the encashment of the said cheque, that delay, if any, cannot be to the prejudice of the petitioner, who had tendered the same in time. There was no mandatory requirement for the Petitioner to make payment of the 15% amount by way of DD/RTGS/NEFT only.
