Dismissed

M/s. J.C.M. Silk Traders, Rep. by its Proprietor v. State Bank of Hyderabad, Regional Office

Telangana HC20 Jul 2007WP/15319/2007

Case brief

AI extract

What is this about?

This single judge quickly dismissed a writ petition challenging a bank's possession notice under the Securitisation Act, 2002, during pending civil execution proceedings. Relying on the Act's overriding nature and Supreme Court precedent, the Court held that the doctrine of election of remedies does not apply, allowing the bank to proceed independently.

What did the court decide?

No costs.

M/s. J.C.M. Silk Traders, Rep. by its Proprietor Vs… — Banking and Recovery | Telangana HC (2007)

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THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION NO.15319 OF 2007

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Dated: 2 0 th JULY, 2007.

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Between : 1. M/s. J.C.M. Silk Traders, Rep. By its Proprietor Sri J.C.Muni Swamy, S/o. Kondappa, aged about 60 years, Occ: Business, R/o. Vasanthapeta, Proddatur, Kadapa District., And another … Petitioners And State Bank of Hyderabad, Regional Office, Tirupathi, Rep. By its Authorised Officer, SBH Regional Office, Tirupathi. … Respondent

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THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION NO.15319 OF 2007

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ORDER :

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This writ petition is filed seeking a Mandamus declaring the action of the respondent Bank in issuing the possession notice dated

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18-6-2007 under Section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the Act’) as arbitrary and illegal.

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The fact that the 1^st petitioner herein availed financial assistance from the respondent Bank by depositing title deeds of immovable property belonging to the 2^nd petitioner as security is not in dispute. Since the petitioners committed default, the respondent filed O.S.No.142 of 2001 on the file of the Court of the Senior Civil Judge, Proddatur, Kadapa District for recovery of money due and the same was decreed on 29-4-2003 for a sum of Rs.2,98,363-50 ps. Pursuant thereto, the respondent Bank filed E.P.No.65 of 2006 which is pending in the Court of the Senior Civil Judge, Proddatur as on today.

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While so, the respondent having invoked the provisions of the Act sought to recover the amounts due from the petitioners by enforcing the secured asset i.e., the schedule property of E.P.No.65 of 2006.

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The said action is challenged in this writ petition contending inter alia that the action of the respondent Bank in invoking the provisions of the Act ignoring the civil proceedings pending is arbitrary and illegal.

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At the outset, it is to be noted that the Securitisation Act is a special enactment which was promulgated to enable the Banks and Financial Institutions to realize the long time assets by enforcing the security interest without the intervention of the Courts and the Tribunals.

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Sections 35 and 37 of the Act made it clear that the provisions of the Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. As held by the Supreme Court in TRANSCORE (M/s) v. UNION OF INDIA AND ANOTHER^[1] the doctrine of election of remedies has no application so far as the enforcement of the secured assets under the

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provisions of the Act is concerned.

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Having regard to the object sought to be achieved by the Act and for the reasons stated above, it cannot be said that there is any prohibition to invoke the provisions of the Act pending the execution proceedings pursuant to the decree granted by a Civil Court.

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Hence, I do not find any substance in the contention raised by the petitioners and accordingly the Writ Petition is dismissed. No costs.

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______________ G. ROHINI, J.

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Dt. 20–07-2007 gbs

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[1] 2007 (1) ALD 109 (SC)

M/s. J.C.M. Silk Traders, Rep. by its Proprietor v. State Bank of Hyderabad, Regional Office

Case brief

What is this about?

What did the court decide?

M/s. J.C.M. Silk Traders, Rep. by its Proprietor v. State Bank of Hyderabad, Regional Office

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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Parties & counsel

Coram

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