Partly allowed

Naresh Kumar Sahu v. Union of India and 2 Others

Allahabad HC7 Nov 2019WRIC/35804/2019

Case brief

AI extract

What is this about?

In a writ petition, the court addressed whether a lender can use the Securitization Act to take possession of secured assets when a DRT decree already exists. Relying on Ace Media Advertisers, the court held that the Securitization Act applies and directed the petitioner to deposit part of the decretal amount in installments with a bar on future relief upon default.

What did the court decide?

Part of the decretal amount to be deposited by the petitioner by 30.11.2019 in installments ending March 2020. Upon default in any installment, the benefit of the order shall cease.

Naresh Kumar Sahu Vs Union of India and 2… — Contract and Commercial Disputes | Allahabad HC (2019)

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Court No. - 29

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Case :- WRIT - C No. - 35804 of 2019

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Petitioner :- Naresh Kumar Sahu Respondent :- Union Of India And 2 Others Counsel for Petitioner :- Ashok Pandey,Srestha Pandey Counsel for Respondent :- A.S.G.I.,Ashish Agrawal,C.S.C.

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Hon'ble Pankaj Mithal,J. Hon'ble Vivek Agarwal,J.

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Heard Sri Ashok Pandey, learned counsel for the petitioner, Sri Pankaj Srivastava, learned counsel for Union of India and Sri Amir Khan, learned counsel for Union Bank of India.

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The petitioner is a borrower and is aggrieved by the order dated 30.09.2019 passed under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "the Securitization Act") for the physical possession of the secured assets.

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The argument of Sri Pandey is that in order to realize the amount under the judgment and order/decree of the Debt Recovery Tribunal, the respondents cannot take recourse to proceedings under the Securitization Act.

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The aforesaid question is no more res-integra in view of the decision of this Court Ace Media Advertisers Pvt. Ltd. vs. Bank of Baroda 2009 (4) ADJ 430 , wherein a similar question has come up for consideration before the Court as to whether a decree passed by D.R.T. can be subject to the remedy available under the Securitization Act.

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The Division Bench, inter alia, held that the process under the Securitization Act cannot be barred merely for the reason that proceedings are pending under the D.R.T. Act and that if a decree is passed by the D.R.T., the claim under the Securitization Act would be confined to the extent of the decree alone.

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Apart from this, the amount under the decree passed under the D.R.T. Act is recoverable as per the modes prescribed under Section 25 of the D.R.T. Act read with Sections 28, 29 and 31-A of the said Act. One of the modes prescribed under Section 25 for the recovery of the debt which includes the decretal amount is taking possession of the property over which security interest is created.

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The said Act nowhere provides for the mode of taking possession and therefore, as the Securitization Act is not derogation of the aforesaid D.R.T. Act, the procedure prescribed for the possession under Section 14 of Securitization Act thereof would get attracted.

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In view of the aforesaid facts and circumstances, in our opinion there is no jurisdictional error in taking possession of the secured asset under Section 14 of Securitization Act in respect whereof a decree has already been passed by the D.R.T. for realizing the decretal amount as per the judgment and order of the D.R.T.

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Under the judgment and order of the D.R.T., a sum of Rs. 13,87,470.80/- together with the pendente lite and future interest @ 12% simple interest from 25.04.2018 till its payment is payable.

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Learned counsel for the petitioner submits that the petitioner is ready and willing to pay the entire aforesaid amount provided some reasonable time is allowed.

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Thus in the facts and circumstances of the case, we direct the petitioner to deposit a sum of Rs. 3,87,470.80/- by 30th November 2019 and the balance amount of Rs. 10,00,000/- in four equal installments of Rs. 2,50,000/- each payable in the month of December 2019, January 2020, February 2020 and March 2020. The last installment shall include 12% simple interest on the aforesaid outstanding amount from 25.04.2018 till the discharge of the entire liability. In the event of default in payment of any of the installments, the benefit of this order will come to an end.

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The petition stands disposed off.

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Order Date :- 7.11.2019 Vikram/-

Naresh Kumar Sahu v. Union of India and 2 Others

Case brief

What is this about?

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Naresh Kumar Sahu v. Union of India and 2 Others

Case brief

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