Disposed

Kakula Aruna Jyothi v. State Bank of India, rep. by its Chief Manager/ Authorized

Telangana HC24 Oct 2014WP/31833/2014

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition challenging a possession notice under the SARFAESI Act. Finding the petitioners willing to repay, the Court directed payment of 50% of the loan within six weeks and the remaining balance within the next six weeks, permitting the bank to proceed if conditions fail.

What did the court decide?

Petitioners directed to pay 50% of the loan within six weeks and the balance within next six weeks; Bank allowed to proceed on default.

Kakula Aruna Jyothi Vs State Bank of… — Contract and Commercial Disputes | 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.31833 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 to declare the possession notice, dated 15.10.2014, issued by the respondent/Bank under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “the SARFAESI Act”) read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 in spite of regular repayment of loan to the respondent Bank as illegal and arbitrary, and consequently, to set aside the same by directing the respondent to grant six months time to the petitioners for repayment of the total loan amount.

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2. Petitioner No.1 obtained an agricultural term loan of Rs.150.00 lakhs from the respondent Bank and petitioner No.2 stood as guarantor. Petitioner No.1 paid some instalments and later, committed default in repayment of the entire loan amount. So, the loan was declared as Non-performing Asset (N.P.A.) and a notice under Section 13(2) of the SARFAESI Act was issued on 24.7.2014. In spite of reply and representation, it was of no use. Later, on 15.10.2014, the respondent Bank issued possession notice under Rule 8(1) of Security Interest (Enforcement) Rules, 2002.

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

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4. On the other hand, learned counsel appearing for the respondent/Bank opposed the same on the ground that earlier, the petitioners committed default in payment of the instalments and prays to dismiss the writ petition.

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5. The respondent/Bank is interested only to recover the entire due amount. As the petitioners came forward to discharge the entire outstanding amount to the bank, 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 six (6) weeks thereafter. If

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anyone of the above conditions is not fulfilled by the petitioners, the respondent Bank is at liberty to proceed further for realisation of the amount due to the Bank in accordance with the provisions of the SARFAESI Act. Registry is directed not to 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

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Date: 24.10.2014 AMD

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THE HON'BLE SRI JUSTICE K.C.BHANU AND THE HON’BLE MRS JUSTICE ANIS

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WRIT PETITION No.31833 OF 2014

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DATE: 24.10.2014