Allowed

Upendra Patahk v. the Allahabad Bank and Ors.

Patna HC27 Aug 2012CWJC/14945/2012

Case brief

AI extract

What is this about?

Petitioner challenged bank action under Section 13(4) of SARFAESI Act, arguing non-consideration of his Section 13(3) objection. Court held mandatory Section 13(3-A) compliance was not met, declaring subsequent Section 13(4) action illegal and without jurisdiction.

What did the court decide?

Notices under Section 13(4) quashed; Bank directed to consider pending objection and communicate decision.

Upendra Patahk Vs the Allahabad Bank and Ors. — Banking and Recovery | Patna HC (2012)

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Patna High Court CWJC No.14945 of 2012 (2) dt.27-08-2012

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.14945 of 2012

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====================================================== Upendra Patahk, Son of Late Ram Prasad Pathak, Resident of Village Marar, P.O. Jitwarpur, District Madhubani .... .... Petitioner Versus 1. The Allahabad Bank through its Chairman-cum-Managing Director, Head Office, 2-Netaji Subhas Road, kolkata-700 001. 2. The Authorised Officer, Zonal Manager’s Office, Allahabad Bank, Om Shanti Complex, Zila School, Main Road, Muzaffarpur. 3. The BranchManager, Allahabad Bank, Madhubani Branch, Bata Chowk, Madhubani. .... .... Respondents ====================================================== Appearance : For the Petitioner : Mr. Bajarangi Lal, Mr. Gagan Deo Yadav, Advocates For the Respondents : Mr. Ajay Kumar Sinha, Mr. Rajan Ghoshrave, Advocates ====================================================== CORAM: HONOURABLE MR. JUSTICE JAYANANDAN SINGH ORAL ORDER

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2 27-08-2012 Petitioner has filed this writ application challenging the action of the respondent-Bank under Section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, ‘the SARFAESI Act’) on the ground that his objection filed in response to the notice under Section 13 (2) has not yet been considered and decided by the Bank and its decision has not been communicated to him.

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Learned counsel for the Bank does not deny this.

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In the case of Mardia Chemicals Ltd. Vs. Union of India and others [(2004) 4 Supreme Court Cases 311], the Apex Court in very clear terms has held that compliance of Section 13 (3-A)

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Patna High Court CWJC No.14945 of 2012 (2) dt.27-08-2012

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of the SARFAESI Act is mandatory and a secured creditor has no powers to proceed in terms of Section 13(4) unless that mandatory requirement is complied with.

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In this case admittedly the said mandatory requirement of section 13 (3-A) of the SARFAESI Act has not been complied. In the circumstances, subsequent action of the Bank under Section 13 (4) of the SARFAESI Act becomes illegal and without jurisdiction.

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As a result, notices under Sections under Section 13 (4) of the SARFAESI Act as contained in Annexures 3 and 4 are quashed. Bank is given opportunity to consider the pending objection of petitioner under Section 13 (3) of the SARFAESI Act and take a decision in accordance with law and communicate to him. Thereafter Bank will be at liberty to proceed in the matter in accordance with law.

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This application is allowed in the manner as indicated above.

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(Jayanandan Singh, J)

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B.T/-

Upendra Patahk v. the Allahabad Bank and Ors.

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Upendra Patahk v. the Allahabad Bank and Ors.

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