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2008 DIGILAW 1069 (JHR)

Sumantri Devi v. Canara Bank

2008-09-03

D.G.R.PATNAIK

body2008
ORDER D.G.R. Patnaik, J. 1. In this application, the petitioner has prayed for issuance of a direction to the respondents for quashing the order dated 22.3.2006 issued by the respondents under Section 13(2) of the Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (SARFAESI Act) 2002 and also for quashing the order dated 2.9.2006 issued by the respondent Bank under Section 13(4) of the Act. Further prayer has also been made for issuance of mandamus commanding upon the respondents to accept the outstanding amount of the petitioner in instalments as may be fixed by this Court and also to restrain them from transfer of the petitioner's property measuring 1620 sq ft. situated at mouza Shyamganj, Thaha No. 413, JB No. 62/2988, Ward No. 10 and part of plot No. 21 bearing survey plot No. 3211/3034 in Taluka Deoghar, within the district of Deoghar, to any third party. 2. The case of the petitioner, in brief, is that she had applied for a housing loan from the respondent Bank at its Branch at Deoghar in the year 2002 for a sum of Rs. 4.50 lakhs for construction of her residential house. On 4.4.2003, a loan of Rs. 3.50 lakhs was granted to her which was re-payable in 180 instalments together with interest at the rate of 8.75% per annum. By way of collateral security, the land, details of which has been mentioned above was mortgaged with the Bank by way of deposit of the title deed. Subsequently, the petitioner requested for grant of further loan of Rs. 50,000/-. For sanction of the amount, the respondent Bank insisted on two conditions, namely furnishing of security for grant of loan and to provide a salaried person whose salary could be credited with the Bank as a guarantor. The petitioner had though commenced repayment of the loan amount earlier disbursed to her by depositing the monthly instalments, but she could not maintain regularity. However, on 15.3.2005 the respondent Bank served the petitioner with a notice for depositing the monthly instalments. Her request for extending time was not granted and on the contrary, the Bank proceeded to take action for possession of the mortgaged property and later, for auction sale of the property. 3. However, on 15.3.2005 the respondent Bank served the petitioner with a notice for depositing the monthly instalments. Her request for extending time was not granted and on the contrary, the Bank proceeded to take action for possession of the mortgaged property and later, for auction sale of the property. 3. The grievance of the petitioner is that without passing any order on the petitioner's representation, the respondent Bank had proceeded to take action under Section 13(3-A) of the Act and thereafter on 2.9.2006, the respondent Bank issued a possession notice to the petitioner under Section 13(4) of the Act read with Rule 9 of the Security Interest (Enforcement) Rule, 2002. 4. Mr. Indrajit Sinha, learned Counsel for the petitioner has assailed the action of the respondent Bank on the ground that the respondent Bank has committed a serious illegality by failing to comply with the mandatory provisions of law in as much as without meeting the grounds of objection raised by the petitioner in response to the notice issued under Section 13(2) and 13(4) of the Act, the respondents have illegally proceeded to take possession of the petitioner's property. It is also pointed out that since the petitioner had offered to repay the entire dues within three months from the date of auction notice, such offer having been made at a time when the auction sale was not confirmed, the Bank ought to have given an opportunity to the petitioner to liquidate her loan. Learned Counsel further submits that without obtaining an evaluation report from the Approved Valuer as per the procedure laid down under Rule 8(5) of the Security Interest (Enforcement), Rules, 2002, the respondent Bank has arbitrarily fixed the reserve price of the property at Rs. 4 lakh only, whereas, according the present market value, the petitioner's property is worth more than rupees 24 lakhs. By under valuation of the property, it has been sold at a virtually throw away price, thereby causing heavy monetary loss to the petitioner. 5. Counter affidavit has been filed by the respondent Bank raising a preliminary objection to the maintainability of the instant writ petition. By under valuation of the property, it has been sold at a virtually throw away price, thereby causing heavy monetary loss to the petitioner. 5. Counter affidavit has been filed by the respondent Bank raising a preliminary objection to the maintainability of the instant writ petition. It is explained by the learned Counsel for the Bank that if the petitioner was aggrieved by the action taken by the Bank under Section 13(4) of the Act, she ought to have preferred appeal under Section 17(3) of the Act before the Debt Recovery Tribunal and the forum of appeal being available to the petitioner, recourse to writ jurisdiction of this Court cannot be taken by the petitioner. It is further explained that on account of the failure of the petitioner in making regular deposits of the monthly instalments inspite of repeated notices issued to her. the account of the petitioner was declared as non-performing asset (NPA) and the petitioner was duly informed through notice served on her. 6. Ms. Anubha Rawat, learned Counsel for the respondent-Bank submits that no illegality at all has been committed by the respondent Bank in invoking the provisions of Section 13(4) of the Act, since prior to taking recourse to Section 13(4) of the Act. the Bank has complied with the essential condition of issuance of the demand notice under Section 13(2) of the Act and in absence of any reasonable ground by way of objection by the petitioner, the Bank had proceeded to take action under the provisions of Section 13(4) to take possession of the mortgaged property. Learned Counsel further submits that prior to auction sale of the property, the same was valued by a Government registered valuer of the respondent-Bank, who had visited the site and after a detailed inspection, the valuator had submitted a certificate declaring that the value of the property was Rs. 4,99,213/- as per the prevailing market rate. Since the sale value is estimated at 20% less than the present market value, the reserve price of the property was fixed by way of rounding off at Rs. 4 lakhs. Learned Counsel adds further that even after the publication of auction notice, and even before confirming the sale to the auction purchaser, the petitioner was given ample opportunity to pay the outstanding amount of loan, but she failed to do so within the stipulated period. 7. The petitioner Nos. 4 lakhs. Learned Counsel adds further that even after the publication of auction notice, and even before confirming the sale to the auction purchaser, the petitioner was given ample opportunity to pay the outstanding amount of loan, but she failed to do so within the stipulated period. 7. The petitioner Nos. 4 and 5 who are auction purchasers have also filed their counter affidavit stating therein that since they were successful bidders and the property in question having been sold to them in auction, they had deposited the entire sale amount with the respondent-Bank and later a sale certificate of the property was also' issued on 7.2.2008 by the competent officer of the respondent-Bank in their favour. It is contended that after confirmation of sale in favour of respondent Nos. 4 and 5, the petitioner has no power or authority to claim for release of the property. 8. From the facts aforesaid, and even as admitted by the petitioner, though she had obtained loan amount from the Bank, but she had failed to repay the loan in terms of the agreement of repayment in monthly instalment. Even after giving ample opportunity to the petitioner by repeated demand notice, directing her to regularize payment of monthly instalment, the petitioner did not respond to the demand of the Bank which ultimately issued notice taking recourse to the provision of the SARFAESI Act recovery of the loan amount and issued demand notice under Section 13(2) of the Act. On account of the petitioner's persistent failure to comply with the demand for repayment of loan, the Bank had proceeded to take action under Section 13(4) of the Act by taking possession of the mortgaged property. 9. The petitioner has expressed her grievance that the respondent-Bank has violated the provisions of law in the matter of proceeding under Section 13(4) of the Act. The learned Counsel for the respondent-Bank has rightly taken a preliminary objection regarding the maintainability of this Writ petition. 10. The provision of statutory appeal has been made under Section 17 of the SARFAESI Act under which the Debt Recovery Tribunal having jurisdiction and authority to decide upon the entire grounds raised by the petitioner and to record its findings as to whether the action of the respondent-Bank as taken under Section 13(4) of the Act was in accordance with law. In view of the fact that alternative remedy is available to the petitioner, this writ petition is not maintainable and is therefore dismissed accordingly. Petition dismissed.