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2018 Supreme(AP) 13
IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
SANJAY KUMAR, KONGARA VIJAYA LAKSHMI, JJ.
Mr. Daddu Jeetaiah and others – Petitioners
Versus
State Bank of India and others – Respondents
Writ Petition No.37991 of 2017
Decided On : 05-01-2018
For the Petitioner: Sri. Sarosh Bastawala
For the Respondent: Sri. M. Srikanth Reddy
Headnote:
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2),14 - Seek a direction - Loan - Non-performing asset - Recovery of its dues - Forbear and desist from taking coercive measures attaching and taking over possession of the plot - Debts Recovery - No coercive measures should be taken - Demand notice - Required examination - Held, On the above analysis, it is clear that the contentions urged by the petitioners do not hold water. There is no ambiguity or lack of clarity on the part of the bank in quantifying the dues payable by the petitioners towards their loan account. Further, this factual dispute, even if established, cannot be redressed by this Court in a writ petition. Admittedly, the petitioners suffered an adverse order in the securitization application filed by them and are yet to succeed in getting it set aside. However, mere pendency of their set aside would not bar the bank from proceeding against them under the SARFAESI Act - As regards the second contention, we find that there was no delay whatsoever on the part of the bank in pursuing recovery proceedings, be it under the SARFAESI Act or under the Act of 1993. In any event, we find that Article 137 in Part-II of the Third Division in the Schedule to the Act of 1963 would not apply to an application filed by a secured creditor under Section 14 of the SARFAESI Act - Writ petition dismissed.
Sanjay Kumar, J.
1. The petitioners seek a direction to the State Bank of India and the Advocate Commissioner, appointed pursuant to the order dated 13.10.2017 passed by the learned Chief Metropolitan Magistrate, Cyberabad, Ranga Reddy District, in Crl.M.P.No.853 of 2017, to forbear and desist from taking coercive measures attaching and taking over possession of the plot admeasuring 592 square yards in H.No.2-37, Bahadurpalli Village, Quthbullapur Mandal, Ranga Reddy District, till disposal of M.A.No.26 of 2016 in O.A.No.993 of 2013 by the Debts Recovery Tribunal, Hyderabad.
2. By order dated 27.11.2017, this Court directed that no coercive measures should be taken by the respondents, opining that the question as to whether the State Bank of India could act upon a demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity, the SARFAESI Act), issued as long back as in the year 2011, required examination.
3. Counter having been filed by the State Bank of India addressing the merits of the matter, the case is amenable to final disposal at the stage of admission.
4. Heard Sri Sarosh Bastawala, learned counsel for the petitioners, and Sri M.Srikanth Reddy, learned counsel for the State Bank of India.
5. The petitioners case, in brief, is as follows: They obtained a loan of Rs.26,64,000/- from the State Bank of India in the year 2009, which was thereafter declared a non-performing asset in 2010. O.A.No.993 of 2013 was instituted by the bank before the Debts Recovery Tribunal at Hyderabad for recovery of its dues. Recovery certificate dated 05.10.2016 was issued, pursuant to the final order dated 08.10.2015 in the said O.A., quantifying the amount due and payable by the petitioners at Rs.46,62,511/-. Demand dated 26.10.2016 was issued by the Recovery Officer, Debts Recovery Tribunal, Hyderabad, in R.C.No.294 of 2016 in O.A.No.993 of 2013 calling upon the petitioners to pay this amount within a time frame. The petitioners filed M.A.No.26 of 2016 in O.A.No.993 of 2013 under Section 22(2)(g) of the Recovery of Debts Due to the Banks and Financial Institutions Act, 1993 (for brevity, the Act of 1993), to set aside the final order dated 08.10.2015 passed in O.A.No.993 of 2013 and it is pending consideration.
6. Long prior thereto, the bank had issued demand notice dated 28.03.2011 under Section 13(2) of the SARFAESI Act after the loan account of the petitioners was declared a non-performing asset on 30.10.2010. The amount mentioned in this demand notice as the outstanding dues was Rs.29,62,408/- as on 28.03.2011. Thereafter, possession notice dated 22.10.2011 was issued under Section 13(4) of the SARFAESI Act read with Rule 8(1) and (2) of the Security Interest (Enforcement) Rules, 2002 (for brevity, the Rules of 2002), which was published in newspapers on 24.10.2011. The bank filed a petition under Section 14 of the SARFAESI Act before the learned Chief Metropolitan Magistrate, Cyberabad, Ranga Reddy District, in Crl.M.P.No.853 of 2017 to secure physical possession of the properties offered by the petitioners as security interest. Pursuant to the order dated 13.10.2017 passed therein, the third respondent herein was appointed as the Advocate Commissioner to take possession of the petitioners properties and deliver the same to the bank. According to the petitioners, appointment of the Advocate Commissioner under Section 14 of the SARFAESI Act is irregular and void, being barred by Section 36 thereof and as their set aside petition in M.A.No.26 of 2016 in O.A.No.993 of 2013 is still pending. They also allege that there is no clarity as to the dues payable by them, going by the various proceedings issued by the bank.
7. The Chief Manager/Authorized Officer of the State Bank of India, Stressed Assets Recovery Branch, Hyderabad, filed a counter. Therein, he confirmed that the petitioners had taken a housing loan to the tune of Rs.26,64,000/- and th
