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2006 DIGILAW 2088 (MAD)

K. S. Rajendran v. The Recovery Officer & Another

2006-08-19

M.JAICHANDREN

body2006
Judgment :- (The Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari as stated therein.) The Writ Petition has been filed praying for the issuance of a Writ of Certiorari to call for the records and quash the proceedings of the auction sale of the first respondent in DRC No.126/2002, dated 29.12.2004, and quash the same. 2. Heard the learned counsel for the petitioner as well as the respondents. By consent of the counsels appearing for the petitioner as well as the respondents, the writ petition itself has been taken up for hearing and disposal. 3. The brief facts of the case, as stated by the petitioner, are as follows: - M/s.Earth Square Exports a partnership firm consisting of A.Srinivasan, D.Krishnama Naidu and T.K.Ravichandran had availed a packing credit facility from the second respondent bank on 23.03.1996. At the time of execution of the loan, the partners of the firm had executed a hypothecation deed in their personal capacity and the petitioner's property situated at No.64, Gajapathy Street, Shenoy Nagar, Chennai, had been given as security. Since there had been some default in the payment of loans by the above mentioned partnership firm, the second respondent bank had filed O.A.No.932 of 1998, before the Debts Recovery Tribunal-II, Chennai. Thereafter, all the properties of the petitioner including those which had not been given as security had been brought for auction by the first respondent in DRC.No.126/2002 and the auction had been fixed by the first respondent on 11.05.2005. Even though the above mentioned partners of the said firm had possession of immovable properties, no action had been brought against such properties. 4. It has been stated by the petitioner that even as per the provisions of the Contract Act, it is the duty of the creditor bank to proceed against the properties of the principal debtors at the first instance and only thereafter, if found necessary, the properties given a security by third parties had to be proceeded against. It is also stated by the petitioner that he had filed a writ petition before this Court in W.P.No.6534 of 2003 and by an order, dated 4.3.2005, he was directed to pay a sum of Rs.2/- lakhs and the said amount was paid by the petitioner with the sole intention of safe guarding his properties. It is also stated by the petitioner that he had filed a writ petition before this Court in W.P.No.6534 of 2003 and by an order, dated 4.3.2005, he was directed to pay a sum of Rs.2/- lakhs and the said amount was paid by the petitioner with the sole intention of safe guarding his properties. It has been further stated that the second respondent has proceeded with the auction of bringing the petitioner's properties for sale by public auction. In such circumstances, the present writ petition has been filed. 5. In the counter affidavit filed by the second respondent it is stated that the petitioner had filed a Writ Petition No.6534 of 2003 wherein an order was passed on 26.08.2003 and it has not been complied with by the petitioner. It is further stated that the original application had been filed in O.A.No.2322 of 2001, before the Debts Recovery-II, Tribunal, Chennai, and an order had been passed and consequently the Recovery Certificate in DRC.No.126/02 had also been issued for a sum of Rs.91,60,156/- 6. It has been further stated that the liabilities of the principal borrower and the guarantor are joint and several and co-extensive and that they are also personally liable to the creditor bank. In view of the adequacy of available security, and based on the claim of the deponent bank, the Recovery Officer had sought to attach the non-mortgaged properties belonging to the guarantor. It has been stated that the petitioner has filed the present writ petition only for the purpose of prolonging the proceedings and to cause undue delay in implementing the orders passed by the Debts Recovery Tribunal-II, Chennai. Further, the petitioner has the statutory legal remedy of filing an appeal against the impugned order before the Debts Recovery Appellate Tribunal, Chennai, under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions. On a perusal of the records placed before this Court and on hearing the contentions raised by the learned counsels appearing for the parties, this Court is of the considered view that the petitioner has an alternative remedy against the order, dated 29.12.2004, passed in DRC No.126 of 2002, by way of filing an appeal before the Debts Recovery Appellate Tribunal, Chennai, under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Therefore, the present writ petition is dismissed. Therefore, the present writ petition is dismissed. While dismissing the writ petition, it is made clear that it is open to the petitioner to file an appeal as provided under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, before the Debts Recovery Appellate Tribunal, Chennai, within a period of 30 days from the date of receipt of a copy of this order. Consequently, the connected W.P.M.P. is closed. No costs.