Dismissed

K. Raj Kumar, v. Union Bank of India

Telangana HC17 Feb 2012WP/23803/2011

Case brief

AI extract

What is this about?

A writ petition challenging an auction notice under the SARFAESI Act was dismissed. The Court held that since serious factual disputes existed and adequate remedies were available under Sections 17 and 18 of the Act, no interference was warranted, granting liberty to the petitioners to pursue alternative remedies.

What did the court decide?

The writ petition was dismissed with liberty to the petitioner to avail the alternative remedy.

K. Raj Kumar, Vs Union Bank of India — Banking and Recovery | Telangana HC (2012)

¶1

THE HON’BLE SRI JUSTICE V.V.S.RAO AND

¶2

THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY

¶3

WRIT PETITION No.23803 OF 2011

¶4

February 17, 2012

¶5

Between:

¶6

K.Raj Kumar, S/o.Mankaiah Lingam And others

¶7

... Petitioners

¶8

And

¶9

Union Bank of India, Asset Recovery Branch, Saifabad, Hyderabad represented by its Authorised Officer And others

¶10

... Respondent

¶11

THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY

¶12

WRIT PETITION No.23803 OF 2011

¶13

ORDER: (Per Hon’ble Sri Justice V.V.S.Rao)

¶14

The third respondent herein availed credit facilities from the second respondent Bank. He mortgaged five items of immovable property in Warangal as security. He committed default in repayment of loan. Treating the loan as non-performing asset, the second respondent issued notice of demand dated 23.5.2008 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act) calling upon him to pay Rs.2,76,41,000/-. It appears, the third respondent made representation for release of item No.3 of the mortgaged property to enable him to dispose of the same and repay the loan amount to the Bank. The Bank vide letter dated 28.1.2009 allegedly agreed to release item No.3 on condition of payment of Rs.20,00,000/immediately and Rs.75,00,000/- within a month after conveying the approval.

¶15

After receiving the letter dated 28.1.2009 from the Bank, the third respondent sold item No.3 property to the first petitioner. The petitioners 2 to 4 are tenants in some of the shops in item No.2 of the properties. When there was a threat of dispossession, they filed W.P.No.24113 of 2009. The writ petition was allowed setting aside the sealing of the premises. The third respondent again

¶16

approached the Bank on 17.12.2009 seeking permission to dispose of the shops in possession of petitioners 2 to 4. Even before the proposal was accepted, the petitioners 2 to 4 purchased the shops bearing door Nos.6-8-192 to 197 (item No.2) for a consideration of Rs.1,20,00,000/-. The said amount was allegedly deposited with the second respondent Bank. After the purchase, the petitioners approached the Bank requesting for release of the title deeds in their favour contending that sale consideration was deposited with the Bank. In spite of the same, the second respondent published auction notice in the Newspapers on 09.3.2011. Aggrieved by the same, the petitioners filed instant writ petition contending that when the third respondent sold the mortgaged properties with the permission of the Bank, not releasing the title deeds, is illegal and proceeding with the auction is unsustainable.

¶17

At the stage of admission itself, the second respondent filed counter affidavit as well as additional counter affidavit. It is stated that after issuing notice of demand when the guarantors declined to handover possession, the Bank approached the District Magistrate and Collector, Warangal under Section 14 of the Act; the property was taken over possession pursuant to the order thereon but in obedience to the orders of this Court, the Bank opened the seals; the third respondent requested for permission to sell shops agreeing to credit Rs.40,00,000/- by December, 2009 and Rs.1,05,00,000/- by March, 2010 and the balance by April, 2010; even thereafter he did not pay any amount but the officials went to take possession of the property, the third respondent handed over the cheque for Rs.20,00,000/- given by the first petitioner; the Bank therefore addressed letter on 28.1.2009 to deposit an amount of Rs.25,00,000/immediately and

¶18

Rs.75,00,000/- within a month thereafter as a condition for releasing item No.3 of the property. Even after expiry of eight months the conditions were not complied with and, therefore, the auction notice was issued fixing the date for auction on 12.4.2011. Aggrieved by the same, the third respondent filed an application before the Debts Recovery Tribunal, Hyderabad (DRT). The same being S.A.No.88 of 2011 is posted for orders on 11.4.2011.

¶19

This Court heard the Counsel for the petitioner and the Counsel for the Bank who would also submit that the third respondent having approached the DRT the writ petition is not maintainable. The petitioner’s specific case is that they purchased the secured assets from the third respondent who allegedly obtained prior permission of the Bank. It is further alleged that the Bank released the mortgage. There is a serious dispute in this regard. Therefore, being a question of fact, we are not inclined to interfere at this stage. The third respondent approached the DRT by filing S.A.No.88 of 2011 and nothing prevents the petitioner to agitate the matter by impleading the third respondent in the security appeal or by filing a separate appeal. Further, as held by [1] the Supreme Court in Indian Overseas Bank v Ashok Saw Mil l , [2] United Bank of India v Satyawati Tondo n and Kanaiyalal Lalchand Sachdev v State of Maharashtr a^[3] the remedies available under Sections 17 and 18 of the SARFAESI Act are adequate and efficacious and, therefore, the writ petition is barred.

¶20

In the result, for the above reasons, giving liberty to the petitioner to avail alternative remedy, the writ petition is dismissed.

¶21

_______________ (V.V.S.RAO, J)

¶22

________________________________ (G.KRISHNA MOHAN REDDY, J)

¶23

February , 2012 YS

¶24

[1] (2009) 8 SCC 366 : 2009 (8) SCJ 979 [2] (2010) 8 SCC 110 : AIR 2010 SC 311

¶25

[3] (2011) 2 SCC 782 : 2011 (8) SCJ 484

K. Raj Kumar, v. Union Bank of India

Case brief

What is this about?

What did the court decide?

K. Raj Kumar, v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bank of India, a Body Corporate constitued Under the Vs Development Credit Bank Ltd. with its Registered Office at

Ch. Siva Rama Krishna Prasad Vs Govt. of India

P. Venkata Raju Vs Government of Andhra Pradesh Rep by its Chief Secretary

Sudhakar Rao a Vs The Ap Pollution Control Board., Pariyavaran Bhavan

S. Nageswar, Vs Icici Lombard General Insurance Company Ltd.

Bolla Nancharamma (Died), W/o.Late Ramulu, Vs V.V. Subba Raju