Kodandaram Alloys Pvt. Limited vs State Bank of India

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2009 Supreme(AP) 409

High Court of Andhra Pradesh
THE HONOURABLE MR. JUSTICE GHULAM MOHAMMED & THE HONOURABLE MR. JUSTICE VILAS V. AFZULPURKAR
Kodandaram Alloys Pvt. Limited, rep. by its Managing Director & Another
Versus
State Bank of India, Veeraghattam Branch, Srikakulam District rep. by its Authorized Officer& Another
Writ Petition No. 25895 Of 2008
DECIDED ON : 01-07-2009

ADVOCATES APPEARED:
For the Petitioner:P. Veera Reddy, Advocate.
For the Respondents:Deepak Bhattacharjee, Advocate.

Headnote:Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Sections 17 and 13 (4)—Limitation Act, 1963—Section 14—Constitution of India—Article 226—Challenge to public notice for sale of mortgaged properties by filing writ petition bypassing efficacious and effective alternative remedy of approaching Debts Recovery Tribunal under Section 17—Writ petition not maintainable—However, petitioner will get benefit of Section 14 for determination of period of limitation. (Para 5)

ORDER:

(Per GHULAM MOHAMMED, J.)

1. This writ petition is filed seeking a Writ of Mandamus declaring the action of the first respondent in accepting the tender of the second respondent and finalizing the same with regard to the properties belonging to the petitioners in pursuance of the public notice dated 22.7.2008 as illegal, arbitrary and consequently, to set aside the same.

2. The petitioner borrowed a term loan of Rs.44.00 lakhs on 26.04.1999 from the first respondent-bank and mortgaged his properties. As the petitioners could not pay the installment due, the first respondent-Bank issued demand notices dated 19.01.2008 and 22.07.2008 under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (for short “the SARFAESI Act”) proposing to conduct sale of the mortgaged properties.

3. The learned counsel appearing for the petitioners submits that the first respondent-Bank without issuing notice under Section 13(2) of the Act straight away initiated steps under Section 13(4) of the Act by publishing public notices dated 19.1.2008 and 22.7.2008 for sale of the property, which is illegal and arbitrary.

4. In the counter affidavit filed by the first respondent-bank, it is stated that the notice issued under Section 13(2) of the Act is served on the borrowers and guarantors and that they failed to pay the amount in question within sixty days and, there after provisions under Section 13(4) of the Act are initiated.

5. Be that as it may, this Writ Petition is not maintainable inasmuch as the petitioners are questioning the legality or otherwise of the notices dated 19.1.2008 and 22.7.2008 issued under Section 13(4) of the Act against which they are having an efficacious and effective alternative remedy of approaching the Debts Recovery Tribunal under Section 17 of the Act. Without availing the said remedy, they have straight away approached this Court by filing this Writ Petition. Hence, we do not see any merit in the Writ Petition and the same is dismissed.

6. However, liberty is given to the petitioners to approach the Debts Recovery Tribunal within two weeks from today. It is made clear that since the matter is pending before this Court, the said period shall be excluded for the purpose of calculating limitation under Section 14 of the Limitation Act. There shall be no order as to costs.

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