The High Court dismissed a writ petition filed by borrowers challenging the bank's issuance of a sale proclamation for auction. The Court observed that statutory appeals and applications against orders and under the SARFAESI Act were pending with appropriate tribunals.
Petition dismissed; miscellaneous petitions also dismissed; no order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
THE HON’BLE SRI JUSTICE V.V.S.RAO AND
THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY
WRIT PETITION No.7499 of 2012
Dated:20.03.2012
Between:
M/s.Vijetha Prints, And another.
Petitioners
And Union Bank of India, And others.
... Respondents
THE HON’BLE SRI JUSTICE V.V.S.RAO AND
THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY
WRIT PETITION No.7499 of 2012
ORDER: (Per Hon’ble Sri Justice V.V.S.Rao)
The first petitioner is a proprietary concern. The second petitioner is the Proprietor of the first petitioner. She availed an amount of Rs.80,00,000/- for her business. When the loan repayments became irregular, the second respondent bank filed O.A.No.26 of 2009. It was allowed ex parte on 03.08.2010, and the bank filed R.P.No.107 of 2010 initiating recovery proceedings. Having come to know about the ex parte order, the petitioners
statedly filed three applications – one for condonation of delay, the second to set aside the ex parte order, and the third to stay further proceedings. In the meanwhile, the first respondent issued the sale proclamation in furtherance of the order dated 12.04.2011. The petitioners filed W.P.No.22731 of 2011. A Division Bench of this Court disposed of the said writ petition on 11.08.2011 directing the Debts Recovery Tribunal, Visakhapatnam, to dispose of the applications.
Even while the proceedings are pending, the Authorised Officer of the first respondent bank initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act), and aggrieved, the petitioners filed an application under Section 17(1) of the Act. The Debts Recovery Tribunal dismissed the same, being S.A.No.114 of 2008, on 12.02.2010. Aggrieved, the petitioners filed an appeal under Section 18 of the Act before the Debts Recovery Appellate Tribunal, Chennai. The same, being ATR (SA) Appeal No.256 of 2010, is pending. Be that as it is, the bank again issued another proclamation on 13.02.2012 (published in Eenadu and Hindu News Papers) proposing to conduct auction on 28.03.2012. Aggrieved by the same, this writ petition is filed.
Counsel for the petitioners submits that the Debts Recovery Tribunal having failed to dispose of the three applications filed by the petitioners in O.A.No.26 of 2009, ought not to have allowed the issuance of proclamation of sale. According to the Counsel, it would amount to arbitrary exercise of power.
Even according to the petitioners, after this Court disposed of W.P.No.22731 of 2011, the matter was listed before the Debts Recovery Tribunal, but the bank took time for filing counters, and therefore, the matter was adjourned to 04.05.2012. Further,
against the proceedings initiated under the Act, the petitioners have already approached the Debts Recovery Appellate Tribunal and nothing prevents them to move the said appellate authority and obtain stay of further proceedings. If there is an order passed by this Court directing to dispose of the Interlocutory Applications, it is for the petitioners to pursue the matter with the Debts Recovery Tribunal and repeatedly filing the writ petitions is not proper. If so advised, the petitioners may either move the Debts Recovery Tribunal for expeditious disposal of their application to set aside the ex parte order or to move the Debts Recovery Appellate Tribunal for stay of further proceedings. As the petitioners have already approached the appropriate forum provided under law, it is not proper to maintain the writ petition.
The Writ Petition, with the above observations, is accordingly dismissed. The miscellaneous petitions, if any, shall also stand dismissed. There shall be no order as to costs.
________________ (V.V.S.RAO, J)
________________________________ (G.KRISHNA MOHAN REDDY, J)
20.03.2012 vs
2 issues framed by the court
Whether a writ petition maintaining challenge to issuance of sale proclamation for auction of secured property should be allowed when appropriate statutory remedies remain pending.
Whether the Debts Recovery Tribunal's delay in disposing interlocutory applications justifies collateral challenge in writ jurisdiction.
M/s. Vijetha Prints
Union Bank of India
V.V. Rao
G. Krishna Mohan Reddy
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
