Dismissed

Sri.Poonam Chand Jain, v. Authorised Officer, The Cosmos Co-operative Bank Ltd.

Telangana HC19 Jul 2013WP/20438/2013

Case brief

AI extract

What is this about?

The Court dismisses a writ petition challenging a notice under Section 13(2) of the SARFAESI Act issued during pending One Time Settlement negotiations, holding the petition maintainable only after the petitioner replies to the notice. The dissenting view of an Allahabad High Court case is distinguished.

What did the court decide?

The writ petition is dismissed with liberty to take appropriate proceedings under the SARFAESI Act.

Sri.Poonam Chand Jain, Vs Authorised Officer, The… — Banking and Recovery | Telangana HC (2013)

¶1

HON’BLE SRI JUSTICE N.V. RAMANA AND HON’BLE SRI JUSTICE VILAS V. AFZULPURKAR

¶2

W.P.No.20438 of 2013

¶3

Date: 19-07-2013

¶4

Between:

¶5

Sri Poonam Chand Jain

¶6

… Petitioner

¶7

1. Authorised Officer, The Cosmos Co-operative bank Ltd, And others

¶8

… Respondents

¶9

HON’BLE SRI JUSTICE N.V. RAMANA AND

¶10

HON’BLE SRI JUSTICE VILAS V. AFZULPURKAR

¶11

W.P.No.20438 of 2013

¶12

ORDER: (Per Hon’ble Sri Justice Vilas V. Afzulpurkar)

¶13

This writ petition is filed questioning the notice issued by the respondent bank under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’).

¶14

2. Learned counsel for the petitioners submits that the first petitioner is the Managing Director of the second respondent firm, and contends that though the petitioners are indebted to the respondent bank, the first petitioner has already filed an application to consider One Time Settlement (OTS) proposal dated 26-12-2012 and further proposals dated 25-03-2013 and 03-06-2013. He, however, submits that the bank did not communicate acceptance or rejections thereof

¶15

and though under the Regulations and Guidelines of the Reserve Bank of India, the bank has to consider OTS proposal and pass appropriate orders. However, while keeping the said proposals of the petitioners pending, it is alleged that the respondent bank has issued the impugned notice dated 25-04-2013. Questioning the said notice, this writ petition is filed asserting that the petitioners have a statutory right to submit OTS proposal and the respondent bank is bound to consider the same on merits.

¶16

3. We are unable to accept the said contention.

¶17

The petitioners have voluntarily given their proposal for OTS and it is for the respondent bank to examine and consider the same. Merely on the ground that such proposal is pending, the petitioners have filed this writ petition questioning the notice issued by the bank under Section 13(2) of the SARFAESI Act. The jurisdiction of the bank invoking the provisions of SARFAESI Act is not in question in this writ petition. On the face of it, the writ petition is not maintainable at this stage as the petitioners were given opportunity to submit their reply to the said demand notice whereupon the bank would consider the reply and pass appropriate orders under Section 13(3A) of the SARFAESI Act. Further, the petitioners also have an effective alternative remedy under Section 17 of the SARFAESI Act if any security measures are taken by the bank. The issue is already fully covered against the petitioners by the judgment of the Supreme Court in UNITED BANK OF INDIA v. SATYAWATI TONDON^[1] .

¶18

4. Petitioner’s counsel, however, has placed reliance upon a decision of the Allahabad High Court in SHYAMA ICE & COLD [2] STORAGE (P) LTD. v. SYNDICATE BANK , which supports the petitioners’ contention that pending One Time Settlement proposal, the bank cannot initiate proceedings under SARFAESI Act by issuing notice under Section 13(2). However, we are unable to agree with the said view as, in our view, the decision of the Supreme Court in

¶19

SATYAWATI TONDON’s case (1 supra) referred to above was not noticed by the Division Bench and secondly as the said decision does not appear to be in accord with the law laid down by the Supreme Court. We, therefore, respectfully dissent from the said view.

¶20

5. Learned counsel for the petitioners also placed reliance upon another decision of this Court in SAMPOORNA BATTU v. ICICI BANK, NAVI MUMBAI^[3] , where a similar notice was quashed by this Court. We have examined the said decision and find that it is clearly distinguishable, as in that case the notice under Section 13(2) was found to have been issued by a person other than an authorized officer, which was found to be contrary to Rule 2(b) of the Rules. Hence, this Court quashed the said notice.

¶21

6. As stated above, in the present case, no issue as to the jurisdiction is raised nor it falls for consideration. Hence, the writ petition is clearly misconceived and liable to be dismissed.

¶22

7. Accordingly, the writ petition is dismissed. However, the petitioners will have liberty to take appropriate proceedings for redressal of their grievance under SARFAESI Act. As a sequel, miscellaneous petitions pending, if any, shall stand closed. No order as to costs.

¶23

N.V. RAMANA, J

¶24

____________________________ VILAS V. AFZULPURKAR, J

¶25

Date: 19-07-2013 YCR

¶26

[1] (2010) 8 SCC 110 [2] 2012 (3) Bankers’ Journal 201 [3] (2012 (3) ALD 245 (DB))

Sri.Poonam Chand Jain, v. Authorised Officer, The Cosmos Co-operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Sri.Poonam Chand Jain, v. Authorised Officer, The Cosmos Co-operative Bank Ltd.

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

The Andhra Pradesh Industrial Infrastructure Corporation Ltd. Vs M/s. Aruna Industries, Rep. by its Proprietrix Smt. M. Aruna

E. Rama Rao, S/o E. Venkappa Vs The Honble IX Metropolitan Magistrate, Miyapur

Singampally Ramana, Vs The Tahsildar, Chintapalli, Visakhapatnam Dist.

Dasari Suresh Chaithanya S/o. Late Sri Ravi Kumar, Vs The Election Commissioner

Koneru Padmavathi, Vs State of Andhra Pradesh

Andhra Pradesh Industrial Infrastructure Corporation Ltd. Vs Chemie Fine Laboratories Private Limited