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High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE R. BANUMATHI & THE HONOURABLE MR. JUSTICE B. RAJENDRAN
Mrs. Saraspathy Sundararaj Proprietrix
Versus
The Authorised Officer and Assistant General Manager, State Bank of India, Chennai
W.P. No. 15146 of 2010 & M.P. No. 1 of 2010
Decided On :Decided On : 16-09-2010
SARFAESI Act - Writ of Certiorarified Mandamus - Section 13 (2) - SBI OTS-SME 2010 Scheme - [13 (2)]
Fact of the Case:
The petitioner availed credit facilities from the respondent bank for her business. After defaulting on the loan, the bank issued a possession notice under Section 13 (2) of the SARFAESI Act. The petitioner constructed six rooms in her property, part of which was mortgaged to the bank. The bank took physical possession of the rooms, and the petitioner made several settlement offers, which were rejected. The petitioner then sought to quash the possession notice and for a directive to effect the settlement.
Finding of the Court:
The court found that the writ petition was not maintainable as the petitioner had not challenged the possession notice within the stipulated time and had not exhausted the alternative remedy available before the Debts Recovery Tribunal. The court also noted that the petitioner's actions, including transferring the secured asset to her son, violated the terms of the mortgage and rendered her ineligible for the one time settlement scheme.
Issues: Maintainability of the writ petition, eligibility for one time settlement, violation of mortgage terms
Ratio Decidendi: The court held that the petitioner's failure to challenge the possession notice in a timely manner and her violation of the mortgage terms precluded her from seeking relief through the writ petition. The court emphasized the importance of exhausting alternative remedies and adhering to the terms of the mortgage.
Final Decision: The writ petition was dismissed, and the petitioner was not granted liberty to move the Debts Recovery Tribunal for condoning the delay.
B.RAJENDRAN, J
1. The petitioner has filed this writ petition praying for a Writ of Certiorarified Mandamus calling for the records relating to the possession notice dated 16.09.2004 issued by the respondent under the SARFAESI Act and consequently direct the respondent to effect the settlement in accordance with the SBI OTS-SME 2010 Scheme as contained in its letter dated 18.03.2010 and unconditionally restore physical possession of the six rooms taken physical possession by it at No.29, Sarojini Street, T. Nagar, Chennai – 17 with such damages.
2. The brief facts are that the petitioner availed credit facilities from the respondent bank for improving her watch sales business. Since the petitioner committed default in repayment of the loan, the respondent issued the notice under Section 13 (2) of the SARFAESI Act to the petitioner on 05.07.2004. According to the petitioner, since she sustained loss in her business and that she could not repay the loan to the respondent bank, she constructed six rooms in her residential property, part of which has been mortgaged to the respondent/bank. According to the petitioner, she has been letting the rooms to third parties by charging Rs.500/- per room per day and earning income out of it. While so, on 16.09.2004, the respondent bank locked the six rooms and took physical possession of the six rooms constructed by the petitioner, which was used by her as guest house. On the same day, possession notice was published in the newspaper. The petitioner sent a letter dated 28.09.2004 to the respondent offering to pay Rs.30 lakhs towards full and final settlement, but that was negatived by the bank on 09.10.2004. Thereafter, by letter dated 22.02.2005, she increased the offer to Rs.35 lakhs, which was also declined by the bank on 01.03.2005. Thereafter, the petitioner further increased the offer to Rs.36 lakhs and informed the same to the respondent bank by letter dated 01.03.2005 which was also not accepted by the bank. The offer was further increased by the petitioner to Rs.40 lakhs and thereafter she also deposited Rs.20 lakhs over a period of time from 12.03.2005 to 23.09.2005 for a period of six months in a no lien account to show her bonafide. Thereafter, by letter dated 26.06.2006, the petitioner increased the offer to pay Rs.43 lakhs in full quit but it was not accepted by the bank. Thereafter, on 04.07.2006, the bank directed the petitioner to increase the offer and immediately she increased it to Rs.45 lakhs and also offered to close the debt with C.I.T. Nagar Branch and close the personal loan accounts on 09.10.2006. Finally, after a period of one year, on 20.03.2007, she agreed to pay Rs.44 lakhs towards all the accounts. This was also ultimately rejected by the bank on 27.09.2007 and directed to make arrangement to liquidate the dues without any further loss of time. The bank also sent a telegram on 22.11.2007 directing the petitioner to close all the accounts, thereafter, nothing transpired. But the petitioner would contend that she received a letter dated 18.03.2010 informing about the recent one time settlement programme offered by the respondent bank under which the dues of the petitioner will also be entitled to be received by the bank. Immediately, the petitioner sent a letter dated 30.03.2010 agreeing for the said proposal for settling the dues by paying one lumpsum. Again on 15.04.2010, the petitioner sent a letter seeking for confirmation for closing of the account and to get back the document. The petitioner also made a representation dated 10.06.2010 to immediately settle the accounts and expressed her willingness to pay the amount in one lumpsum, but this was rejected by the respondent by a communication dated 02.06.2010 stating that the petitioner is not eligible for the benefits of the one time scheme introduced by the bank, which according to the petitioner is contradictory to the earlier letter dated 18.03.2010 of the respondent bank, hence, she filed the pre
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