Research › Search › Judgment

Orissa High Court · body

2020 DIGILAW 115 (ORI)

Dhira Sahoo v. Ao, H D F C Bank Ltd.

2020-05-21

C.R.DASH, MOHAMMAD RAFIQ

body2020
JUDGMENT Mohammad Rafiq, C.J. - This writ petition has been filed by Dhira Sahoo-petitioner, inter alia, with the prayer that a writ of mandamus may be issued to the respondents-Bank to hand over the possession of his house situated at Kaibaly Vihar, P.O.- Nayabazar, P.S. Chauliaganj, Dist-Cuttack, pursuant to the order of the Debts Recovery Tribunal, Cuttack (for short "the Tribunal") dated 04.01.2020 passed in SA. NDN.2548 of 2019 and O.A. No.618 of 2017. 2. The background facts giving rise to this writ petition are that the petitioner is the proprietor of M/s. Maa Tarini Enterprises, the principal borrower in the loan account with the respondents-Bank. The said firm was engaged in the work of cleaning the used liquor bottles relating to Mc.Dwell Liquor Company. It availed cash credit loan for its business to the tune of Rs.35.00 lakhs from the respondents-Bank and an amount of Rs.10.00 lakhs was given as fixed deposit. The petitioner stood guarantor for the said loan and mortgaged his house for that purpose. Since the Mc.Dwell Company was closed down, the business of the said firm had to be stopped. The firm defaulted in making payment of the loan amount, therefore its loan account was declared NPA. According to the petitioner, he approached the respondents-Bank for settlement of the loan account, but the Bank refused to entertain the request. The Bank then initiated recovery proceeding under the SARFAESI Act and took possession of the residential house of the petitioner on 03.12.2019 which was mortgaged against the loan account for which the petitioner stood the guarantor. The petitioner filed the aforesaid SA challenging the action of the Bank in taking over physical possession of his house. 3. According to the case set up by the petitioner before the Tribunal, loan was of Rs.35.00 lakhs as cash credit limit to the firm of the petitioner. An amount of Rs.10.00 lakhs was given as fixed deposit to avail such loan. The Bank charged interest @ 18% on Rs.35.00 lakhs but paid interest at a very low rate on the fixed deposit of Rs.10.00 lakhs. While the petitioner was paying dues regularly, but due to business loss, he could not pay few installments. He then approached the respondents-Bank to avail the benefit of one time settlement (for short, 'OTS') and therefore, submitted an application to close the account on settlement. But the Bank did not entertain such request. While the petitioner was paying dues regularly, but due to business loss, he could not pay few installments. He then approached the respondents-Bank to avail the benefit of one time settlement (for short, 'OTS') and therefore, submitted an application to close the account on settlement. But the Bank did not entertain such request. According to the petitioner, his family members including four daughters are facing grave hardship as all of them are residing in a small rented room. 4. The Bank in its counter before the Tribunal disputed the allegation that they are charging higher rate of interest. Since the account of the petitioner was declared NPA, they had to take steps under the SARFAESI Act for recovery of the loan and mortgaged property. 5. The Tribunal relying on the judgment of the Hon'ble Supreme Court in the case of Allahabad Bank, Calcutta vs. Radha Krishna Maity and Ors (disposed of on 10.09.1999) disposed of the securitization applications vide order dated 04.01.2020 with the following direction:- "Therefore, in view of the Art.300A of the Constitution of India, it is clear that no person shall be deprived of his own property hence this Tribunal found fit for order for re-possession of the property and also taking into consideration of all the aspects and also since the applicant is coming forward to clear the entire outstanding amount the applicant is directed to deposit Rs.20.00 within fifteen days from the date of this order and the balance amount of Rs.5,31,384.15ps with interest on or before 31.03.2020. The respondent-bank is directed to deliver back possession of the property to the applicant within 48 hours after the payment of Rs.20.00 lakh by the applicant. The respondent bank is entitled to interest as per orders of OA which is disposed on this day. With this observation, the SA. NDN.2548/2019 is disposed of. Each party shall bear their own costs." 6. The Tribunal vide another order passed on the same date i.e. 04.01.2020 disposed of O.A. No.618 of 2017 filed by the Bank for recovery of total loan amount of Rs.36,31,420.15ps. Considering the decision in the aforesaid SA and taking note of submission of the petitioner that he is willing to settle the matter and close the loan account, the Tribunal therein passed the following order: "2. However, the connected SA. Considering the decision in the aforesaid SA and taking note of submission of the petitioner that he is willing to settle the matter and close the loan account, the Tribunal therein passed the following order: "2. However, the connected SA. NDN 2548/2019 is disposed of with a direction and in view of disposal of connected SA, there is nothing to be decided in this matter and since the defendants are willing to settle the matter and close the loan accounts, it is just and necessary to dispose of this OA with the following observations:- 1. Since the defendants already deposited an amount of Rs.8,75,000/- into the applicant bank as per the directions of the Hon'ble High Court of Orissa, the said amount has to be adjusted to the OA claim amount, however the defendants are liable to pay the interest on Rs.34,06,384.15ps from the date of OA till payment of Rs.8,75,000/-, hence the defendants jointly and severally liable to pay the simple interest @10% per annum on Rs.34,06,384.15ps from date of OA till the date of payment of Rs.8,75.000/- 2. So far as the balance outstanding amount of Rs.25,31,384.15ps (after deduction of Rs.8,75,000/- stated above) as on payment of Rs.8,75,000/- is concerned, the defendants are jointly and severally liable to pay the balance amount of Rs.25,31,384.15ps together with 10% simple interest in the following manner:- (i) An amount of Rs.20,00,000/- to be paid within 15 days from the date of this order. (ii) The remaining balance amount of Rs.5,31,384.15ps to be paid by the defendants jointly and severally along with simple interest @ 10% per annum on Rs.25,31,384.15ps on or before 31.03.2020 interest on Rs.34,06,384.15ps from the date of OA till payment of Rs.8,75,000/- @10% simple and Rs.25,31,381.15ps from the date of payment of Rs.8,75,000/- till payment of Rs.20,00,000/- @10% simple and after payment of Rs.20,00,000/- on the balance amount of RS.5,31,384.15ps @10% simple till payment of amount. (iii) The respondent bank is entitled only simple interest not compound rate. (iv) The defendants are further liable to pay the costs of OA and the defendants are directed to clear the entire total outstanding amount including costs before 31.3.2020. (v) In case the defendants failed to clear the outstanding amount as observed above by this Tribunal the applicant bank is at liberty to take steps for issuance of Recovery Certificate. (iv) The defendants are further liable to pay the costs of OA and the defendants are directed to clear the entire total outstanding amount including costs before 31.3.2020. (v) In case the defendants failed to clear the outstanding amount as observed above by this Tribunal the applicant bank is at liberty to take steps for issuance of Recovery Certificate. (vi) The mortgage of the property will be cleared after total amount is paid by the defendants." 7. Mr. G. Kar, learned counsel for the petitioner has submitted that pursuant to order of the Tribunal, out of the balance outstanding amount of Rs.25,31,384.15ps quantified by the Tribunal with simple interest @ 10% per annum, the petitioner has already deposited Rs.20.00 lakhs in compliance of the direction of the Tribunal within 15 days from the date of the order of the Tribunal. 8. Learned counsel for the petitioner submits that the petitioner is ready to pay the remaining amount of Rs.5,31,384.15ps together with simple interest @10% per annum on Rs. 25,31,384.15ps. In the meantime, however, due to lockdown being imposed, the petitioner could not arrange the same by selling some other property, as the title documents thereof are lying locked in the house which is in possession of the respondents-Bank. It is contended that the respondents-Bank despite specific direction of the Tribunal to hand over the possession of the house within 15 days from the date of order dated 04.01.2020, has not handed over the possession of the house to him, which is why he could not arrange to sell other property. It is submitted that the petitioner along with his wife and four young daughters is forced to reside in a very small rented house and facing grave hardship. 9. Learned counsel for the petitioner submits that the petitioner is prepared to pay the remaining amount of Rs.6,19,996.15ps together with interest, as directed by the Tribunal, within two months. However, for that purpose possession of the petitioner's house ought to be restored back to him so that he can collect the title documents of the property which he intends to sell in the market. This will enable him to arrange the money to repay the loan amount. 10. Mr. However, for that purpose possession of the petitioner's house ought to be restored back to him so that he can collect the title documents of the property which he intends to sell in the market. This will enable him to arrange the money to repay the loan amount. 10. Mr. S.K. Padhi, learned Senior Counsel for the respondents-Bank submits that the Bank filed an application seeking review of the order dated 04.01.2020 passed by the Tribunal in O.A. No.618 of 2017, as according to the Bank, the Tribunal has not correctly quantified the total outstanding amount of loan. According to the Bank, the petitioner is required to pay total outstanding amount of Rs.18,74,798.86ps over and above the amount of Rs.20,0,000/- paid by the petitioner and not just the amount of Rs.5,31,384.15ps. The review application filed by the Bank has been only partly allowed marginally increasing the amount vide order dated 03.03.2020 to Rs.6,19,996.15ps with interest on the total amount of Rs. Rs.25,31,384.15ps from 18.01.2020 till actual payment is made. It is submitted that the respondents-Bank is in the process of filing appeal before the DRAT. However, due to the ongoing lockdown, they could not immediately file the appeal. 11. Taking into account the order of the Tribunal and considering the conduct of the petitioner in having already deposited Rs.20.00 lakhs and the submissions that he is willing to deposit remaining amount of Rs.6,19,996.15ps with interest as directed by the Tribunal, within two months and also considering that the petitioner and his family consisting of wife and four daughters are facing grave hardship but without prejudice to the right of the respondents-Bank, in getting the outstanding amount correctly quantified as per its stand in the appeal that it may file before the DRAT, we deem it appropriate to dispose of the writ petition by directing the respondents-Bank to hand over the possession of the house in question to the petitioner, positively by 23.05.2020, with a further direction that the petitioner shall file an undertaking before this Court in course of the day that the petitioner will pay the remaining amount of Rs.6,19,996.15ps together with simple interest @10% per annum from 18.01.2020 as per the direction in sub-clause-ii of para-2 of the order of the Tribunal till actual payment is made, within two months. It goes without saying that quantification of the amount by the Tribunal under the impugned orders would be subject to further order as may be passed by the Debt Recovery Appellate Tribunal in the appeal to be filed by the respondents-Bank. 12. With the above direction, the writ petition stands disposed of. As Lock-down period is continuing for COVID-19, learned counsel for the petitioner may utilize the soft copy of this judgment available in the High Court's official website or print out thereof at par with certified copies in the manner prescribed, vide Court's Notice No.4587 dated 25.03.2020.