Disposed

Smt. D. Lalitha Prasad, v. Union of India, rep. by its Secretary

Telangana HC8 Aug 2014WP/22667/2014

Case brief

AI extract

What is this about?

The High Court held that if petitioners are honest debtors ready to clear the dues, no need to auction secured properties. The Court directed payment of 50% within six weeks and the balance within two weeks thereafter, dismissing the writ petition if conditions are not met.

What did the court decide?

Direction to pay 50% of loan within six weeks and the remaining balance within two weeks thereafter.

Smt. D. Lalitha Prasad, Vs Union of India, rep. by… — Banking and Recovery | Telangana HC (2014)

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THE HON'BLE SRI JUSTICE K.C.BHANU AND

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THE HON’BLE MRS JUSTICE ANIS

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WRIT PETITION No.22667 OF 2014

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ORDER:- (per Hon’ble Sri Justice K.C.Bhanu)

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This writ petition is filed seeking to issue a Writ of Mandamus declaring the action of the respondent/Bank authorities in proceeding to take possession of the properties of the petitioners kept as security for availment of loan vide A/c.No.31490368916 and sell them in public auction under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “the SARFAESI Act”) without taking into consideration the payments of loan amount paid by the petitioner and also not granting time to repay the loan amount after final loan account being furnished as illegal and arbitrary, and consequently, to direct the respondents to consider the case of the petitioners for waiver of interest and one time settlement of loan account.

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2. It is stated in the affidavit filed in support of the writ petition that petitioner No.1 availed a loan of Rs.60,00,000/- from respondent No.3/Bank in the month of October, 2010 for construction of a Function Hall in the name and style of “Bangaru Thalli Kalyana Mandapam” at Dwaraka Tirumala, West Godavari District by mortgaging certain properties. Petitioner No.2, who is her husband, stood as guarantor for the said loan. The amount sanctioned by the Bank was insufficient to complete the said project. While so, the respondent/Bank declared the account of petitioner No.1 as a Non-performing Account in the year 2012. Petitioner No.1 made several payments and has been asking the Bank to reschedule her loan, as the total project could not be completed, but of no use. The respondent Bank authorities issued a

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notice, dated 16.7.2013, under Section 13(2) of the SARFAESI Act and also issued another notice, dated 24.9.2013, under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002. Petitioner No.1 paid Rs.7,00,000/- on different dates to the respondent Bank and has been repeatedly asking the respondent Bank to consider her case for one time settlement and also for waiver of interest for all these years and see that the construction of the project is completed by rescheduling the loan account, but in vain. Now, the respondent Bank obtained proceedings, dated 25.7.2014, from the District Collector, West Godavari District for taking physical possession of the properties put as security for availment of the loan. Hence, the present writ petition.

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3. Learned counsel for the petitioners stated that the petitioners are ready to pay the entire due amount to the respondent/Bank if a reasonable time is granted to them.

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4. On the other hand, learned counsel appearing for respondent Nos.2 to 4/Bank opposed the same and prays to dismiss the writ petition.

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5. The respondent/Bank is interested only to recover the entire due amount. Petitioners appear to be honest debtors and they have not acted in bad faith. When the petitioners are ready to clear the entire due amount to the Bank, there is no point in bringing the mortgaged properties to sale. In these circumstances, we feel that reasonable time can be granted to enable the petitioners to pay the entire amount due to the Bank. Therefore, we direct the petitioners to pay 50% of the loan amount to the Bank within a period of six (6) weeks from the date of receipt of a copy of this order and the remaining amount within a period of two (2) weeks thereafter. If anyone of the above conditions is not fulfilled by the petitioners, this Writ Petition shall stand dismissed without further reference to the Court. Registry is directed not to

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entertain any application seeking “Extension of Time” or “For being mentioned” in this regard.

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6. With the above direction, the Writ Petition is disposed of. There shall be no order as to costs. Miscellaneous Petitions, if any, pending in this Writ Petition shall stand closed.

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______________________ JUSTICE K.C.BHANU

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_______________ JUSTICE ANIS Date: 8.8.2014 AMD

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THE HON'BLE SRI JUSTICE K.C.BHANU AND

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THE HON’BLE MRS JUSTICE ANIS

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WRIT PETITION No.22667 OF 2014

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DATE: 8.8.2014