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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
R.NATARAJ
SLN Hollow Block And Earth Movers, Rep. By Its Proprietor Mr. Rajanna R. – Appellant
Versus
Canara Bank, Rep. By Its Chief Manager/ Authorised Officer Mr. I. Satyanarayana Rao S/o. Kanakayya I. – Respondent
ORDER :
R. NATARAJ, J.
1. Petitioners have challenged an order dated 13.03.2020 passed by the Chief Judicial Magistrate, Bengaluru Rural District, Bengaluru, in Crl.Misc. No. 115/2020 under Section 14 of the SARFAESI Act.
2. Petitioners contend that they had availed OCC loan of Rs.20,00,000/- and OD loan of a sum of Rs.55,00,000/- from the respondent – Bank and had executed required mortgage deed dated 16.03.2018 and deposited the title deeds of the property. They contend that due to various reasons, they could not carry out the business effectively and could not pay the installments in time. The respondent – Bank, therefore, initiated proceedings under the SARFAESI Act and later initiated proceedings under Section 14 of the SARFAESI Act in Crl.Misc. No. 115/2020 to take possession of the secured asset. The Magistrate passed order dated 13.03.2020 permitting the respondent – Bank to take out possession of the mortgage asset and the jurisdictional Police was directed to provide assistance. Petitioners thereafter approached the respondent – Bank for One Time Settlement (OTS) of the loan amount and after discussions, it was agreed that the petitioners shall pay a sum of Rs.58,00,000/
One Time Settlement proposals require explicit payment timelines; absence of such terms necessitates reasonable enforcement by courts.
The SARFAESI Act provides specific remedies for grievances, and borrowers do not have a vested right to One Time Settlement benefits, which are subject to the bank's discretion.
No borrower has a vested right to compel a bank to accept a One Time Settlement, as banks retain discretion in recovery matters.
Point of Law : IT IS THE SOLEMN DUTY OF THE COURT TO APPLY THE CORRECT LAW WITHOUT WAITING FOR AN OBJECTION TO BE RAISED BY A PARTY, ESPECIALLY WHEN THE LAW STANDS WELL SETTLED.
The duty of a litigant to disclose all material facts and the bank's right to protect its recovery were the central legal points established in the judgment.
Point of Law : It is clear that the learned Chief Judicial Magistrate will not become functous officio by issuing an order under section 14 of the SARFAESI Act and also that the jurisdiction under se....
Point of law: Loans by financial institutions are granted from public money generated at the taxpayer’s expense. Such loan does not become the property of the person taking the loan, but retains its ....
The court upheld the validity of actions under S.14 of the SARFAESI Act, reinforcing creditor rights in possession cases.
The court's decision emphasized the importance of fulfilling undertakings and directed the respondent Financial Institution to accept the One-Time Settlement proposal and take necessary actions upon ....
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