'Article 142 Can't Be Invoked Against Statute' : Supreme Court Refuses To Extend Time Under SARFAESI Rules For Purchaser's Deposit

The Supreme Court on Wednesday (04.10.2023) held that the inherent powers of the Supreme Court under Article 142 of the Constitution of India though wide in its amplitude, cannot be exercised to supplant the substantive law applicable to the case or to the cause under consideration of the court.

“It cannot be gainsaid that the court in exercise of powers under Article 142 cannot ignore any substantive statutory provision dealing with the subject. The plenary powers of the Supreme Court under Article 142 are inherent in nature and are complementary to those powers which are specifically conferred on the court by various statutes. These powers though are of a very wide amplitude to do complete justice between the parties, cannot be used to supplant the substantive law applicable to the case or to the cause under consideration of the court,” a bench of Justice Aniruddha Bose and Justice Bela M Trivedi observed.

In the case at hand, Sunview Assets Pvt. Ltd, an auction purchaser filed a Miscellaneous Application in a disposed of Civil Appeal, seeking issuance of sale certificate from the Apellant Bank (Union of India) on the ground that it had made made the full and final payment of the auction amount alongwith interest in terms of the order dated 12.05.2020 passed by the Supreme Court.

The Apex Court noted that the Applicant had not complied with Rule 9 of the Security Interest (Enforcement) Rules, 2002 which deals with the time of sale, issue of sale certificate and delivery of possession etc., with regard to the sale of immovable secured assets through e-auction mode. The Applicant had failed to comply with the orders of the Supreme Court passed from time to time to deposit the requisite amount with interest.

Sr. Adv. Dushyant Dave appearing for the Applicant submitted that the Apex Court should treat the deposits made by the Applicant subsequently on 22.07.2022 and on 26.08.2022 as due compliance of the order of the Court dated 12.05.2020. The Applicant argued that Court ought to use its inherent powers under Article 142 to extend the time limit. However, in view of the statutory position under Rule 9 of the Rules which prescribes a time limit of 15 days, the Apex Court refused to do so .

“As per the sub-Rule (4) of Rule 9, the balance amount of purchase price payable has to be paid by the purchaser to the authorized officer on or before the fifteenth day of the 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 extending three months. Even if by liberal construction of the said sub rule, and in view of the orders passed by this Court from time to time in the successive applications filed by the Applicant, it is presumed that the time to deposit the balance amount with interest had stood extended two months after February, 2022, i.e., upto 30.04.2022, no further extension of time as such was granted by the Court nor was it permissible to extend under the said statutory provision contained in Rule 9 of the said rules. “

The Court in this regard reiterated the well settled proposition 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. The Apex Court relied on the judgment in Supreme Court Bar Association vs. Union of India and Another (1998) 4 SCC 409 to observe that:

“Article 142 even with the width of its amplitude cannot be used to build a new edifice where none existed earlier, by ignoring the express statutory provisions dealing with a subject and thereby to achieve something indirectly which cannot be achieved directly”.

The Court dismissed the Miscellaneous Application as not maintainable as it attempted to seek substantive prayers in a disposed of Civil Appeal. In this context, the Court also deprecated the practice of filing repeated applications, styled as Miscellaneous Applications, without any legal foundation. The Court noted that the Applicant had not complied with its orders and was attempting to avoid judicial adjudication in the substantive proceedings by filing a Miscellaneous Application in a disposed of Civil Appeal.

Advocate Sanath Parashar appeared for Respondent no. 5 -Zoom developers( borrower).

Case Title: Union Bank of India V. Rajat Infrastructure Pvt. Ltd. & Ors

Citation: 2023 LiveLaw (SC) 846

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