Dismissed

D. Nataraja Sharma v. The Federal Bank Limited

Telangana HC3 Apr 2012WP/9218/2012

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging a Debts Recovery Tribunal order that imposed a monetary deposit as a condition for staying bank recovery proceedings under the SARFAESI Act, holding the Tribunal's discretion was lawful.

What did the court decide?

The writ petition assailing the DRT order was dismissed. Miscellaneous petitions were also dismissed. No order as to costs.

D. Nataraja Sharma Vs The Federal Bank Limited — 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.9218 of 2012

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Dated:03.04.2012

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Between:

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D.Nataraja Sharma, And another.

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…Petitioners

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And The Federal Bank Limited, And another.

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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.9218 of 2012

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

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The first petitioner is the son of the second petitioner. They availed housing loan of Rs.20.00 lakhs in 2007. They statedly are paying instalments regularly. The first respondent bank treated the loan account as non performing asset and issued a notice of demand under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), followed by the possession

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notice under Section 13(4) of the SARFAESI Act. The first respondent bank also approached the District Collector and Magistrate under Section 14 of the SARFAESI Act for taking possession of the secured asset (mortgaged property). An order was passed by him on 26.06.2010. In addition, it appears, the bank also filed Crl.M.P.No.14 of 2012 under Section 14 of the SARFAESI Act, and an Advocate Commissioner was appointed to take possession. At that stage, the petitioners approached the Debts Recovery Tribunal (DRT), Hyderabad, by filing Securitisation Appeal No.71 of 2012, under Section 17 of the SARFAESI Act. They also sought for stay.

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The DRT passed an order on 03.02.2012 staying all further proceedings taken by the first respondent bank on condition of the petitioners depositing an amount of Rs.2.5 lakhs within a period of eight weeks. This order is assailed in this writ petition.

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The Counsel for the petitioners made the only submission that the condition imposed is onerous, and therefore, it is arbitrary. We are afraid, this submission is misconceived. It is well settled that when the Tribunal is vested with the power to stay any action initiated by the bank or financial institution for recovery of amounts, it cannot pass a blanket order. It that view of the matter, the DRT exercised sound discretion in passing the impugned order.

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The Writ Petition is misconceived, and the same is 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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03.04.2012 vs

D. Nataraja Sharma v. The Federal Bank Limited

Case brief

What is this about?

What did the court decide?

D. Nataraja Sharma v. The Federal Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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