Dismissed

Chilukuri Venkat Rao v. Sambalpur Dist.Coop

Orissa HC18 Jan 2023WP(C)/6648/2013

Case brief

AI extract

What is this about?

Petitioner sought quashing of a recovery demand notice issued under the SARFAESI Act by a cooperative bank following a default on a dairy loan and failure to complete an OTS scheme. The bank's counsel argued that the notice was simplicitor and the withdrawal of the writ petition was permitted.

What did the court decide?

Writ petition dismissed as withdrawn; liberty granted to seek other available remedies.

Chilukuri Venkat Rao Vs Sambalpur Dist.Coop — Banking and Recovery | Orissa HC (2023)

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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W. P.(C) No.6648 of 2013

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Chilukuri Venkat Rao

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…. Petitioner

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Mr. U. K. Samal, Advocate

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-versus-

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Sambalpur District Cooperative Central Bank Limited, Bargarh and Another

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…. Opp. Parties Mr. Baidhar Sahoo, Advocate for the Bank

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CORAM:
JUSTICE JASWANT SINGH
JUSTICE M.S. SAHOO
ORDER (Oral)
18.01.2023
Order No. (Hybrid Mode)

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09. 1. The petitioner had availed a Dairy Loan for a sum of Rs.3 Lakhs on 31^st August, 1996 from Sambalpur District Co-operative Central Bank, Sambalpur by mortgaging his immovable property. The loan was to be repaid in 60 equated monthly instalments with EMI of Rs.13,946/-. Due to failure to pay EMI, the Co-operative Bank invoked the arbitration proceedings under Section 68 of the Orissa Cooperative Societies Act leading to passing of an award in favour of the Bank for a sum of Rs.4,33,429/- with future interest at the rate of 19% per annum. It is not in dispute that no challenge was made to the award by the petitioner by filing any appeal and while the

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execution proceedings of the award are stated to be pending, the Bank initiated recovery process under the SARFAESI Act, 2002 (by virtue of the co-operative banks being included within the definition of financial institutions by way of an amendment) by issuance of a Demand Notice dated 16^th March, 2013 recalling the outstanding liabilities to the tune of Rs.11,44,740/due as on that date.

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2. The prayer in the present Writ Petition is for quashing of the aforesaid Demand Notice.

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3. Upon notice, the Bank has filed it’s reply including an additional affidavit dated 23^rd August, 2022 of Sri Debashish Kumar Tripathy, Asst. Manager, Legal Section, Sambalpur District Cooperative Central Bank Ltd., Sambalpur, wherein it is submitted that the benefit of an OTS scheme was sanctioned in favour of the petitioner vide letter dated 26^th June, 2007 in response to the application of the petitioner dated 14^th February, 2007, which was duly acknowledged by the petitioner on 8^th July, 2007, as is apparent from the sanction letter annexed as (Annexure-A) with the aforesaid affidavit. In terms of the sanctioned letter, the petitioner was required to deposit 25% of the settlement amount of Rs.4,44,335/- within 30 days and the remaining within one year of the date of the sanction order. No doubt, the petitioner deposited 25% of the amount but failed to deposit the remaining balance within the

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stipulated one year leading to automatic cancellation of the sanctioned OTS.

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4. At the time of hearing realizing that a challenge to the simplicitor Demand Notice is not maintainable, learned counsel for the petitioner prays for permission to withdraw the present Writ Petition to enable the petitioner to seek his available remedies in accordance with law.

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5. In view of the above, the present Writ Petition stands dismissed as withdrawn with the aforesaid

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liberty.

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(Jaswant Singh)
Judge
(M.S. Sahoo)
Judge

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Sipun 18^th January, 2023 Cuttack

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Page 3 of 3

Chilukuri Venkat Rao v. Sambalpur Dist.Coop

Case brief

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Chilukuri Venkat Rao v. Sambalpur Dist.Coop

Case brief

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