Dismissed

Bhagyanagar Switches, v. State Bank of Hyderabad

Telangana HC16 Mar 2012WP/7392/2012

Case brief

AI extract

What is this about?

The court dismissed a writ petition challenging the reserve price fixed for an asset auction initiated under the SARFAESI Act, holding the petition misconceived and directing parties to approach the Debts Recovery Tribunal.

What did the court decide?

The Writ Petition stands dismissed with liberty to approach the Debts Recovery Tribunal; WPMP.No.9356 of 2012 also dismissed.

Bhagyanagar Switches, Vs State Bank of Hyderabad — 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.7392 OF 2012

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

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M/s. Bhagyanagar Switches, a firm, availed credit facilities in a sum of Rs.42.00 lakhs from the State Bank of Hyderabad, S.R.Nagar Branch. The loan became non-performing asset. The authorised officer, the first respondent herein, initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter, the SARFAESI Act or the Act). After following the procedure, the auction/sale notice dated 16.02.2012 was published and proposed to conduct auction at 11.30 am on 17.03.2012 to sell the secured asset admeasuring 300 square yards situated at Erragadda. The reserve price was fixed at Rs.54.19 lakhs. Aggrieved by the same, the two partners of the firm filed the instant Writ Petition.

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The counsel for the petitioners vehemently contends that the market value of the secured asset is more than Rs.90.00 lakhs and therefore, fixing the reserve price at Rs.54.19 lakhs is arbitrary. He also submits that the petitioners do not have any objection if the reserve price is fixed at Rs.70.00 lakhs.

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It is now well settled that when the bank initiates any measures under Section 13(4) of the SARFAESI Act, any person aggrieved thereby including sale auction notice have to move the Debts Recovery Tribunal (DRT) under Section 17(1) of the Act and seek redressal. The question whether the reserve price is properly fixed by the authorised officer or not can also be agitated before the DRT and under Section 17(3) of the Act, if the DRT comes to conclusion that the bank has not properly exercised powers under Section 13(4) of the Act, they can always nullify the

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action of the bank and restore possession to the borrower.

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The Writ Petition is, therefore, misconceived and not maintainable. The petitioners are given liberty to approach the DRT. It is also open to them to approach the authorised officer/the

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lending bank under Section 13(8) of the SARFAESI Act.

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The Writ Petition, with the above observations, stands dismissed without any order as to costs. WPMP.No.9356 of 2012 shall stand dismissed.

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

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_________________________________ (G.KRISHNA MOHAN REDDY, J)

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16^th March 2012 RRB

Bhagyanagar Switches, v. State Bank of Hyderabad

Case brief

What is this about?

What did the court decide?

Bhagyanagar Switches, v. State Bank of Hyderabad

Case brief

What is this about?

What did the court decide?

What the court decided

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