Dismissed

Smt. Gorantla Subbamma, v. The Authorized Officer

Telangana HC13 Mar 2012WP/36/2012

Case brief

AI extract

What is this about?

The High Court dismissed the writ petition challenging an auction notice under the SARFAESI Act. The Court held that disputed questions of fact regarding the petitioner's share and mortgage mandate adjudication by the Debts Recovery Tribunal under S. 17, making the writ petition maintainable. The petition was accordingly dismissed.

What did the court decide?

Writ petition dismissed; liberty reserved to file application under S. 17(1) of the Act before DRT.

Smt. Gorantla Subbamma, Vs The Authorized Officer — Banking and Recovery | Telangana HC (2012)

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THE HON’BLE SRI JUSTICE V.V.S.RAO AND

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THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY

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WRIT PETITION No.36 of 2012

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Dated:13.03.2012

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Between:

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Smt.Gorantla Subbamma, And others.

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Petitioners

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And The Authorised Officer, Indian Overseas Bank, And others.

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... Respondents

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THE HON’BLE SRI JUSTICE V.V.S.RAO AND

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THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY

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WRIT PETITION No.36 of 2012

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

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The petitioners, who are five in number, filed this writ petition assailing the tender-cum-public auction notice dated 02.12.2011 published in the Telugu Newspaper as illegal and contrary to the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act), and the Security Interest (Enforcement) Rules, 2002.

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The second respondent availed credit facilities from the Indian Overseas Bank (IOB) to a tune of about Rs.20.00 crores. The loan is secured by mortgage of immovable properties (land) situated at Thattiannaram, Gunthapally, Kammeta Villages of Hayathnagar and Chevella Mandals in Ranga Reddy District. The petitioners claim that they have a share in the property mortgaged by the second respondent. When the borrower committed default in repayment of the loan, the IOB issued possession notice under Section 13(4) of the Act, which was preceded by a demand notice under Section 13(2) of the Act, and later issued the impugned auction notice. The petitioners mainly contend that the ancestral property in which they have a share do not form part of the schedule and therefore any action by the first respondent, namely, the Authorised Officer of the IOB, to bring their properties to sale is illegal.

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It is now very well settled that any measures initiated by a secured creditor, be it a bank/financial institution under Section 13(4) of the Act can be challenged before the Debts Recovery Tribunal (DRT) having jurisdiction over the matter. It is also now settled that under Section 17(3) of the Act the DRT can always declare the measures initiated under Section 13(4) of the Act by the secured creditor as illegal and restore the property/possession to the borrower or the guarantor or to any third party. There are disputed questions of fact as to the share of the petitioners in the property and also as to whether the petitioners’ property was mortgaged to secure the loan availed by the second respondent. Therefore, the writ petition would not lie. Liberty is reserved to the petitioners to file an application under Section 17(1) of the Act before the DRT, Hyderabad, and seek redressal.

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The Writ Petition, with the above observations, is

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accordingly dismissed. The miscellaneous petitions, if any, shall also stand dismissed. There shall be no order as to costs.

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

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________________________________ (G.KRISHNA MOHAN REDDY, J)

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13.03.2012 vs

Smt. Gorantla Subbamma, v. The Authorized Officer

Case brief

What is this about?

What did the court decide?

Smt. Gorantla Subbamma, v. The Authorized Officer

Case brief

What is this about?

What did the court decide?

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