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2016 DIGILAW 2122 (ALL)

FEROZE KHAN v. PUNJAB NATIONAL BANK

2016-05-31

KRISHNA MURARI, PRASHANT KUMAR

body2016
JUDGMENT By the Court.—Heard Shri Ramendra Asthana for the petitioner and Shri R.P. Pandey appearing for respondent Nos. 1 and 2. 2. Petitioner, who is a borrower having availed cash credit facility from the respondent-Bank after pledging the property in question as security for the same, has approached this Court seeking the following main relief. “(a) issue a writ, order or direction in the nature of mandamus commanding the respondent Nos. 1 and 2 and their subordinates etc. to permit the petitioner to deposit Bank Draft dated 13.4.2016 (Annexure 8 to the writ petition) for Rs. 4,65,931.00 drawn on Canara Bank in favour of Punjab National Bank Branch Kachcha Katra, Shahjahanpur and such other sums that may be found to be due from him.” 3. The aforesaid relief is being claimed in the background of the following facts. Admittedly, the loan amount of the petitioner when became irregular and unsatisfactory and despite various notices when was not regularsied, the same was classified as Non Performing Asset on 16.5.2015. Thereafter, the respondent-Bank recalled the loan and in order to enforce the security interest created in its favour by the petitioner-borrower, initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the ‘Act’). A notice under Section 13 (2) of the Act was issued requiring the petitioner to clear the entire outstanding liability alongwith further interest which may become due till payment in full within 60 days. 4. Aggrieved by the notice under Section 13 (2) of the Act, petitioner approached this Court by filing Writ Petition No. 40196 of 2015 making a prayer to permit repayment of entire outstanding dues in easy instalments. The said writ petition was dismissed on 22.7.2015 by making the following observations. “After hearing learned counsel for the parties, in our view, the Court cannot order rescheduling of instalments of the loan. The petitioner himself has breached the contract and not deposited regular instalments of loan in time. However, a sympathetic view can be taken by the bank by rescheduling the instalments of loan if the petitioner approaches the Bank and comply with any terms and conditions to show his bona fide as may be imposed by the bank. For the aforesaid reasons, we are not inclined to interfere with the matter in exercise of extra ordinary powers under Article 226 of the Constitution. For the aforesaid reasons, we are not inclined to interfere with the matter in exercise of extra ordinary powers under Article 226 of the Constitution. The writ petition is accordingly dismissed.” 5. Thereafter, respondent-Bank issued a notice dated 23.12.2015 under Section 13 (4) of the Act read with Rule 8 of the Rules for auction of the secured asset, namely, commercial plot standing in the name of the petitioner situate at Near Jali Kothi, Mohalla Khalil Garbi, District Shahjahanpur. The secured asset was auctioned by the respondent-Bank in favour of Smt. Urmila Dixit and Smt. Manju Dixit on 30.3.2016. A bid of Rs. 28.05 lacs offered by the auction purchaser was confirmed by the respondent-Bank. Thereafter, the Bank made an application under Section 14 of the Act seeking assistance of the District Magistrate for taking possession/control of the secured asset. The proceedings were transferred by the Collector to be decided by Additional District Magistrate, who vide order dated 12.4.2016 rejected the application on the ground that since auction of the property was made during the pendency of the proceedings under Section 14, as such, the same is illegal. 6. Order dated 12.4.2016 was challenged by the respondent-Bank by filing Writ Petition No. 26145 of 2016, which has been allowed vide order dated 30.5.2016 holding that the view taken by the authority that the auction of the property during the pendency of the proceedings under Section 14 of the Act without taking possession is illegal, was not sustainable and was set aside and the District Magistrate was directed to decide the application under Section 14 of the Act made by the respondent-Bank afresh in accordance with law. 7. Learned counsel for the petitioner contends that since an application dated 22.4.2016 was made before the respondent-Bank to accept a demand draft for a sum of Rs. 4,65,931/- towards outstanding dues and to intimate the petitioner in respect of any other outstanding so that the petitioner may clear the same, but neither any order has been passed on the application nor the bank draft tendered alongwith application has been accepted by the Bank. 4,65,931/- towards outstanding dues and to intimate the petitioner in respect of any other outstanding so that the petitioner may clear the same, but neither any order has been passed on the application nor the bank draft tendered alongwith application has been accepted by the Bank. It is further submitted that in view of Section 13 (8) of the Act, since the entire outstanding dues have been tendered to the respondent-Bank, the secured asset is not liable to be sold or transferred and no further step is liable to be taken by the Bank in respect of the secured asset. 8. The thrust of the argument of the learned counsel for the petitioner is that since the petitioner had already tendered the total outstanding dues by means of a bank draft, the creditor Bank cannot now proceed any further with the sale or transfer of the secured asset and the liability of the petitioner is to be written off in view of the Section 13 (8) of the Act. Section 13 (8) of the Act reads as under. “13. (8) If the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no further step shall be taken by him for transfer or sale of that secured asset.” 9. A bare reading of the aforesaid provision goes to show that requirement is, actual tender of the outstanding dues including all costs, charges and expenses by the debtor to the secured creditor at any time, before the date fixed for sale or transfer. It is only when the actual tender is made to the secured creditor before the date fixed for sale or transfer, the provision places a restriction on the right of the secured creditor to proceed with sale or transfer of the secured asset and further prohibits the secured creditor to take any step for transfer or sale of the secured asset. The language of the Section is very clear that tender to the secured creditor should be made at any time before the date fixed for sale or transfer. 10. In the case in hand, admittedly, the respondent-Bank proceeded to auction the secured asset on 30.3.2016 for a sum of Rs. The language of the Section is very clear that tender to the secured creditor should be made at any time before the date fixed for sale or transfer. 10. In the case in hand, admittedly, the respondent-Bank proceeded to auction the secured asset on 30.3.2016 for a sum of Rs. 28.05 lacs in favour of Smt. Urmila Dixit and Smt. Manju Dixit. The bid offered by the auction purchaser was confirmed by the respondent-Bank. From the pleadings in the writ petition itself, it is clear that the application made by the petitioner before the respondent-Bank tendering a sum of Rs. 4,65,931/- by means of a bank draft was dated 22.4.2016. 11. Admittedly, the application was made much after the auction took place on 30.3.2016. It is also pertinent to note that petitioner-borrower in his application dated 22.4.2016 has referred the bank draft to be dated 13.4.2016, but photocopy of the same filed as Annexure 8 to the writ petition goes to show that it is dated 30th April, 2016, which in itself sufficient to indicate that though the application is dated 22.4.2016, but it was submitted to the Bank on or after 30.4.2016 when the bank draft was got prepared. 12. Since the tender of the outstanding dues has been made by the petitioner on or after the auction sale of the secured asset held on 30.3.2016, the same does not confirm to the conditions prescribed by sub-section (8) of the Act that tender should be made at any time before the date fixed for sale or transfer. 13. In view of the fact that since the petitioner tendered the outstanding dues to the respondent-Bank subsequent to the holding of the auction on 30.3.2016, hence, he is disentitled to claim benefit of Section 13 (8) of the Act and, thus, the relief prayed for in the writ petition is not liable to be granted. 14. Writ petition, accordingly, fails and stands dismissed. However, in the facts and circumstances, we do not make any order as to costs.