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IN THE HIGH COURT OF GAUHATI, ITANAGAR BENCH
Manojit Bhuyan, Michael Zothankhuma, JJ.
Habung Lailang and anr. - Appellants
Versus
Union of India and ors. - Respondents
WP(C) No. 446 (AP) of 2015
Decided On : 28-01-2016
For the Appellants : Mr. S. Tapin, Mr. H. Chada, Mr. H. Nikang, Mr. R. Buda, Mr. H. Tari, Mr. H. Obin, Mr. M. Jonnam
For the Respondents: Mr. N. Ratan, Mr. R.C. Pant, Ms. G. Ete, Mr. A.K. Singh
Headnote:
Constitution of India,1950 - Articles 300A, 226 and 141 - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Sections 13(2) , (4), 13(4), 13, (12) and 17 - Immovable property so secured - Possession Notice - Debts Recovery - Liberty is granted - Petitioners assail Possession Notice and E-Auction Notice issued under hand of Authorized Officer, Central Bank of India, in exercise of powers under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Facts briefly are that petitioners had availed a housing loan of an amount of from Central Bank of India, way back in year 2005 - For availing said loan, petitioner No.2 stood as Guarantor - In course of time and due to failure on part of petitioners to repay amounts as per schedule of payment, a Demand Notice under section 13(2) of SARFAESI Act was issued - was duly received by petitioners - Pursuant thereto, petitioner No.1 had also addressed a letter to Branch Manager, Central Bank of India indicating that it was not possible on his part to make timely repayment - Request was made that he may be allowed to repay outstanding amount on monthly basis with effect - In view of default in repayment of amount, a Possession Notice was issued under section 13(4) of Act, confirming taking over all immovable property so secured – Followed was issuance of E-Auction Notice under Act and in said E-Auction Notice details of issuance of Demand Notice, amount outstanding and date of issuance of Possession Notice was indicated - Intention to sell mortgaged properties by E-Auction in exercise of power under sub-section (4), (12) of section 13 of SARFAESI Act read with rules 8 and 9 of Security Interest Rules, 2002 was clearly indicated - Aforesaid two Notices - Possession Notice and E-Auction Notice are assailed in present writ petition – Held, Court concluded with hope and trust that in future High Court will exercise their discretion in such matters with greater caution, care and circumspection - Reference may also be made to case of Authorised Officer, Indian Overseas Bank Saw Mill SCC where Apex Court held that action taken by a secured creditor in terms of section 13(4) is open to scrutiny before Debts Recovery Tribunal and said Tribunal can not only set aside action but even status quo ante can be restored by Debts Recovery Tribunal - Law with regard to availability of an efficacious and alternative remedy under section 17 of Act having been clearly pronounced - Court and provisions under article 141 of Constitution of India - Court has no option but to hold this writ petition in present form is not maintainable - It may be added that cases relied upon by petitioner do not come to their aid, inasmuch as, available materials of case do not disclose that there was any infirmity in proceedings adopted by Bank while exercising power under section 13 of Act - Court and in event of an appeal being preferred by petitioner - Observation made in order shall not influence mind of Tribunal - Liberty is granted to petitioner to approach Tribunal within 2 weeks from today - Clear prescription of law and pronouncement of Court - Writ petition does not merit consideration as being not maintainable and same is dismissed at threshold – Writ petition is dismissed
Manojit Bhuyan, J.
Heard Mr. Subu Tapin, learned counsel representing the petitioners as well as Mr. N. Ratan, learned CGC, representing respondent No.1, i.e., the Union of India. Also heard Mr. A.K. Singh, learned counsel representing respondent Nos.2 and 3 as well as Ms. G. Deka, learned Senior Government Advocate, representing the State respondent No.4.
2. The petitioners assail the Possession Notice dated 29.7.2015 and the E-Auction Notice dated 29.7.2015 issued under the hand of the Authorized Officer, Central Bank of India, in 'exercise of powers under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
3. The facts briefly are that the petitioners had availed a housing loan of an amount of Rs.7,50,000 under the "Cent Home Loan" Scheme from the Central Bank of India, Itanagar Branch, Naharlagun, way back in the year 2005. For availing the said loan, the petitioner No.2 stood as the Guarantor. In course of time and due to the failure on the part of the petitioners to repay the amounts as per the schedule of payment, a Demand Notice under section 13(2) of the SARFAESI Act was issued on 12.1.2015. The said Demand Notice dated 12.1.2015 was duly received by the petitioners. Pursuant thereto, the petitioner No.1 had also addressed a letter to the Branch Manager, Central Bank of India on 5.3.2015 indicating that it was not possible on his part to make timely repayment. A request was made that he may be allowed to repay the outstanding amount on monthly basis with effect from March 2015.
4. In view of the default in repayment of the amount, a Possession Notice was issued under section 13(4) of the Act, confirming taking over all the immovable property so secured. What followed thereafter was the issuance of the E-Auction Notice under the Act and in the said E-Auction Notice the details of the issuance of the Demand Notice, the amount outstanding and the date of issuance of the Possession Notice was indicated. The intention to sell the mortgaged properties by E-Auction in exercise of power under sub-section (4), (12) of section 13 of the SARFAESI Act read with rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002 was clearly indicated. The aforesaid two Notices i.e. the Possession Notice dated 23.7.2015 and the E-Auction Notice dated 8.9.2015 are assailed in the present writ petition.
5. The case laid out by the petitioners is that the said two Notices cannot stand the scrutiny of law, in as much as, the same were not preceded by any opportunity of hearing. Further, the details of the amount outstanding etc. were not intimated to the petitioners prior to issuance of the said Notices.
6. The petitioners rely upon the case of Jaideep Singh and Ors. Vs. Union of India and Anr., 2008 (2) GLT 91 as well as in the case of J. Rajiv Subramaniyan and Anr. Vs. Pandiyas and Ors., (2014) 5 SCC 651, to say that while a secured creditor is entitled to enforce the secured asset created in its favour of its own without the intervention of the court, however, such intervention should be in conformity with the other provisions of the SARFAESI Act. It is contended that ownership of property being a constitutional right protected under article 300A of the Constitution of India, a secured creditor cannot deal with the secured asset in any manner it likes. The said asset can only be disposed of in the manner prescribed under the SARFAESI Act. The submission is that the Bank ought to have ensured that the petitioners were early brought to notice of the proceedings in order to provide opportunity the petitioners for retrieving their property. On a pointed query as to the maintainability of the writ petition in view of section 17 of the SARFAESI Act the learned counsel for the petitioners refers to the judgment in Jaideep Singh (supra).
7. Mr. A.K. Singh, learned counsel representing the Bank submits that the Demand Notice had been duly served upon the petitione
