No Proper Enquiry about Property Before Participating in Auction: Calcutta HC quashes Demand for Interest and Refund of Stamp Duty and Registration Fee [Read Order]

The Calcutta High Court quashed demand for interest and refund of stamp duty and registration fee on no proper enquiry about property before participating in the auction.

The appellant’s, Anita Tosniwal, case is that the respondent published a notice in the newspapers for e-auction of different immovable properties. The appellant participated in the auction held on 1st November, 2012 conducted by the Central Bank of India (CB) in respect of a flat. The appellant submitted a bid of Rs.35,00,000/- and emerged to be the highest bidder.

The sale deed pertaining to the said flat was thereafter executed and the original title deed was also handed over to the appellant. Suddenly, a possession notice was affixed in the said flat. Stating such fact, the appellant lodged a complaint before the Banking Ombudsman but in vain.

Abhrotosh Majumdar, advocate appearing for the appellant submitted that the impugned order has been passed without appreciating the admitted facts and the writ petition has been disposed of on the basis of an erroneous observation that ‘apparently, there are title disputes in respect of an immovable property’. The counsel for the appellant contended that the appellant who had invested her money and had been a bona fide purchaser cannot be asked to wait till a final decision is taken in the proceedings initiated by CBI, to get back possession of the flat or the money expended.

Gautam Chakraborty, advocate appearing for the CB submitted that there had been no mistake on the part of the authorities of the said bank and they have acted in strict consonance with the SARFAESI Act and the Rules framed thereunder. A loan was advanced against mortgage of the flat. As the loanee failed to pay the dues the account was declared NPA.

Soumya Roy, advocate appearing for SBI submits that on the basis of a forged deed, loan was granted by CB. The said deed did not create any security interest over the flat in question. At the time of sale of such property by CB, the said flat was mortgaged to SBI. The issue as regards genuineness of the deed retained by CB, is to be adjudicated in the pending criminal proceeding.

A Division Bench comprising Justice Tapabrata Chakraborty and Justice Partha Sarathi Chatterjee observed that “The appellant also had not made a proper enquiry about the property before participating in the auction and she ought to have been more diligent. For such laches we are not inclined to allow the appellant’s prayer for interest and refund of the stamp duty and registration fee.”

However, the Court directed the respondent to refund the consideration money of Rs. 35,00,000/- to the appellant within a period of two weeks from the date of communication of the order.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates