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2020 Supreme(Kar) 1809
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
R DEVDAS, J.
MRS GOWRAMMA K V W/O MR. VENKATARAMANAIAH SHETTY -PETITIONER
Versus
KARNATAKA BANK LIMITED - RESPONDENTS
WRIT PETITION NO.5353of 2020 (GMRES)
Decided On : 06-03-2020
For the Appellant :SRI SOMASHEKHARAIAH R P, ADVOCATE
For the Respondent:SRI K V SHYAM PRASAD, ADVOCATE FOR C/R1
The court emphasized the importance of giving the petitioner an opportunity to make arrangements to dispose of the property, obtain the market value, and repay the entire loan amount under the OTS scheme.
Headnote:
SARFAESI Act - Borrower's Representation for Settlement - The court directed the bank to consider the borrower's representation for settlement under the OTS scheme and stayed the proceedings before the DRT for a month to enable the bank to pass orders on the representation.
Fact of the Case:
The petitioner, a borrower from the bank, failed to repay the outstanding amount, leading the bank to initiate action under the SARFAESI Act. The petitioner approached the Debts Recovery Tribunal (DRT) and fulfilled the conditions set by the DRT to stay the confirmation of sale. The petitioner requested the bank to consider settlement under the OTS scheme.
Finding of the Court:
The court found that the petitioner should be given an opportunity to dispose of the property at market rate and repay the entire loan amount under the OTS scheme. It directed the bank to consider the petitioner's representation and stayed the proceedings before the DRT for a month.
Issues: The main issue was whether the bank should consider the petitioner's representation for settlement under the OTS scheme.
Ratio Decidendi: The court decided that the petitioner should be given a reasonable time to try for a settlement under the OTS scheme and directed the bank to consider the petitioner's representation.
Final Decision: The court directed the bank to consider the petitioner's representation for settlement under the OTS scheme and stayed the proceedings before the DRT for a month to enable the bank to pass orders on the representation.
ORDER :
R.DEVDAS, J.
1. Learned Counsel Sri K.V.Shyam Prasad, has entered appearance for respondent No.1Bank on caveat.
2. With the consent of the learned Counsel for the petitioner as well as the learned Counsel for respondent No.1Bank, the matter is taken up for final disposal.
3. The petitioner is the borrower from the first respondent Bank. On failure of the petitioner to repay the outstanding amount due, the Bank proceeded to initiate action under The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act’ for short). Notice of sale of the immovable property was issued on 08.11.2019 for conducting auction on 30.11.2019. Even as per the first respondent Bank, the amount outstanding is Rs.35,83,216/.
4. The petitioner approached the Debts Recovery TribunalI, at Bangalore in S.A.No.563/2019. The DRT, by order dated 28.11.2019 stayed the confirmation of sale, subject to condition that the petitioner should deposit Rs.5,00,000/on or before 29.11.2019 and another sum of Rs.3,00,000/on or before 20.12.2019. It is an admitted fact that the conditions have been fulfilled by the petitioner.
5. Learned Counsel for the petitioner submits that the petitioner requested the first respondent Bank to enable the petitioner to settle the dues under the OTS scheme. The communication is dated 17.01.2020 at Annexure ‘E’. Further another representation was made to the Bank ombudsman on 31.01.2020.
6. The prayer in this writ petition is to direct respondent No.1Bank to consider the representation dated 17.01.2020 for settlement under OTS scheme.
7. Learned Counsel for the respondent Bank submits that symbolic possession was taken on 16.07.2018. Thereafter, physical possession was taken and the premises was locked on 19.09.2019. Thereafter the Bank issued sale notice on 08.11.2019. The learned Counsel submits that the petitioner was well aware of the proceedings that were initiated by the respondent Bank and the petitioner never came forward to settle the outstanding dues.
8. It is further submitted that for the first time, the petitioner has stated that she has made a representation dated 17.01.2020 while the respondent Bank was not aware of such a representation. It is further submitted that the auction has been conducted and it is only by virtue of the interim order passed by the DRT that the sale confirmation has not been made.
9. Having heard the learned Counsels for the petitioner as well as the first respondent Bank, this Court finds that if a representation is given by the petitioner, as stated by the learned Counsel for the petitioner and if the petitioner has made arrangements to dispose of the property at the market rate, the petitioner should be given an opportunity to make arrangements to dispose of the property, obtain the market value and repay the entire loan amount under OTS scheme.
10. The learned Counsel for the petitioner, during the course of the arguments, has produced a copy of the order sheet in S.A.No.563/2019. It is seen from the order sheet that by order dated 25.02.2020, the DRT has granted only ten days time to the petitioner to settle the matter with the first respondent Bank. The matter is directed to be listed on 10.03.2020.
11. This Court is of the considered opinion that a reasonable time is required to be granted to the petitioner to try for a settlement under OTS scheme. In that view of the matter, this petition stands disposed of while directing the first respondent Bank to consider the representation dated 17.01.2020 given by the petitioner for settlement under the OTS scheme. In order to enable the respondent Bank to consider the representation and pass orders, the proceedings before the DRT shall be stayed for a period of one month i.e., till 06.04.2020.
It is ordered accordingly.
