The present writ petition has been filed for declaration declaring the possession notice dated 22.08.2007 and the sale notice published on 111. 2007 in the daily Indian Express on the file of the first respondent is ultra vires, unconstitutional and illegal.

2. The case of the petitioner in nutshell is set out here under:-

.(a) The petitioner stood as a guarantor for the facilities availed by one M/s.Hotel Sri Navayuga and she has also mortgaged her property as a collateral security towards the loan availed by the said borrower. However, as the account had turned to NPA, the first respondent had issued a demand notice dated 09.07.2003 under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after referred to as SARFAESI Act). Subsequent to the said notice, the respondent Bank had filed a suit in O.S.No.108 of 2004 on the file of the learned District Judge, Nilgiris. A preliminary decree was passed in the said suit on 111. 2005 directing the petitioner to pay the decretal amount with interest.

.(b) Much later to the issuance of the demand notice, under Section 13 (2) of the SARFAESI Act, the first respondent suddenly proceeded to take possession of the property on 22.08.2007 and further chose to bring the property for sale, by sale notice published in India Express daily dated 111. 2007 giving a go by to the preliminary decree obtained by the Bank. The action of the respondent bank in proceeding under the SARFAESI Act after obtaining the preliminary decree is per se illegal. There cannot be two parallel action after the suit is disposed of. Hence, the writ petition had been filed challenging the possession notice and the sale notice.

3. Counter affidavit had been filed on behalf of the respondents, wherein the following facts have been set out:-

.(a) The petitioner created equitable mortgage for the payment of the loan availed by one M/s. Hotel Sri Navayuga. Since default had been committed by the borrower, after issuance of notice, a suit has been filed before the learned District Judge of Nilgiris, in O.S.No.108 of 2004 praying for sale of the mortgaged property and for recovery of the amount due. The suit was decreed after contest on 111. 2005 by passing a preliminary decree. The petitioner failed to repay the decretal amount within the time granted by the learned District Judge, Nilgiris.

.(b) In view of the inordinate delay in recovering the outstanding amount and having regard to the public interest, the Bank issued a notice on 09.07.2003 under Section 13

.(2) of the SARFAESI Act, calling upon the petitioner, the guarantor and the borrower to repay the amount due. The petitioner did not make any objection even though she has acknowledged the notice and hence, the Bank took steps under Section 13 (4) of the SARFAESI Act. Now the Bank issued sale cum tender notice by effecting publication. The contention of the petitioner that since the Bank had obtained preliminary decree, it is precluded from taking action under the SARFAESI Act, is without any merit. Section 37 of the SARFAESI Act would point out that the provisions of the SARFAESI Act are not in derogation of any other law for the time being in force.

.(c) The power of the Bank to take charge of the secured assets and sell the same for realising the dues is not in any way affected by the preliminary decree obtained by the Bank. The outstanding arrears still remain in the books of the Bank as NPA and hence, the proceedings initiated under the SARFAESI Act cannot be said to be violative of any Act or Rules. Further, the SARFAESI Act provides an alternative remedy by filing an appeal under Section 17 of the said Act. Without exhausting the same, the petitioner cannot approach this Court by filing the present writ petition.

4. I have heard Mr.T.R.Rajagopalan, learned Senior Counsel appearing for the petitioner and Mr.K.Sankaran, learned counsel appearing for the respondents.

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