Back
2017 Supreme(Mad) 1653
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.MANIKUMAR, V.BHAVANI SUBBAROYAN, JJ.
V.Sunil Prasad - Petitioner
Vs.
Authorised Officer, Central Bank of India - Respondent
W.P.No.23289 of 2017 and WMP No.24388 of 2017
Decided On : 30-08-2017
For the Petitioner: Mr. M.Bharath
The main legal point established in the judgment is that the court's writ jurisdiction should not be used to interfere in contractual matters related to loan recovery, and the court cannot compel the bank for rephasement or One Time Settlement.
Headnote:
Housing Loan - SARFAESI Act - Section 13(2), Section 13(4), Rule 8 of the Security Interest (Enforcement) Rules, 2002 - The court discussed the provisions of the SARFAESI Act, including Section 13(2) and Section 13(4), as well as Rule 8 of the Security Interest (Enforcement) Rules, 2002, in the context of the petitioner's housing loan and the actions taken by the bank for recovery.
Fact of the Case:
The petitioner and his wife availed a housing loan, defaulted on payments, and the bank initiated proceedings under the SARFAESI Act to recover the outstanding amount. The petitioner sought relief through a writ petition under Article 226 of the Constitution of India.
Finding of the Court:
The court found that the petitioner's default on the housing loan led to the classification of the loan account as a Non-Performing Asset. The court also noted the actions taken by the bank under Section 13(2) and Section 13(4) of the SARFAESI Act, including the issuance of possession and sale notices.
Issues: The key issues included the petitioner's default on the housing loan, the bank's actions under the SARFAESI Act, and the petitioner's request for relief through a writ petition.
Ratio Decidendi: The court emphasized that the writ jurisdiction should not be used to interfere in contractual matters related to loan recovery. It cited previous decisions to support the principle that the court cannot compel the bank for rephasement or One Time Settlement.
Final Decision: The court dismissed the writ petition, stating that the representation made by the petitioner had already been considered and replied to by the bank. The court held that the writ petition was not maintainable and closed the case.
S.MANIKUMAR, J.
Petitioner and his wife have availed Housing Loan facility for a sum of Rs.30 Lakhs, from Central Bank of India, Guindy Branch, in October 2013. Thereafter, wife has availed an additional sum of Rs.10 Lakhs from the same bank. For securing the said loans, immovable property comprised in Plot No.119 Part and 120 full, Radha Avenue, Valasaravakkam, Chennai-7, owned by the petitioner and his wife, has been offered as security.
2. Petitioner has further contended that so far, they have paid Rs.23 Lakhs. Earlier, he was employed in "Shree Plan Your Journey Pvt. Ltd.," as Assistant Regional Manager and was relieved from the Company with effect from 02.11.2016. However, he managed to pay the monthly instalments. But, on 19.04.2017, loan account of the petitioner, has been declared as Non-Performing Asset. Authorised Officer / Chief Manager, Central Bank of India, Chennai, issued a notice dated 20.04.2017 under Section 13(2), of SARFAESI Act, 2002 demanding a sum of Rs.39,18,843/- as outstanding amount, as on 20.04.2017. Petitioner approached, the 2nd respondent explaining his difficulty. He also prayed to regularise the loan account. After the issuance of notice under Section 13(2) to show his bonafide, petitioner has paid Rs.1,10,000/-. Again the petitioner wrote a letter dated 19.06.2017, explaining the difficulties. On 29.06.2017, 2nd respondent issued the possession notice under Section 13(4) of the SARFAESI Act, 2002. Again he approached the bank stating that now, he has secured employment in 'Allhind Tours and Travels', with effect from 05.06.2017.
3. Declining to accept the request of the petitioner, sale notice dated 31.07.2017 has been issued under Rule 8 of the Security Interest (Enforcement) Rules, 2002, bringing the property for auction on 11.09.2017. Petitioner sent a letter dated 04.08.2017 to the 2nd respondent explaining the factual background and requested to reschedule the loan, so as to enable him to repay without any default. Request of the petitioner has been rejected vide letter dated 05.08.2017. However, the bank has offered a One Time Settlement.
4. Contending inter alia that he has no other alternate remedy, instant writ petition has been filed under Article 226 of the Constitution of India, for a certiorarified mandamus, to quash the auction notice dated 31.07.2017 and consequentially, prayed for a direction to the respondents to consider his representation dated 04.08.2017.
5. On the basis of the averments and supporting the prayer sought for, Mr. M.Bharath, learned counsel for the petitioner reiterated that only due to the loss of employment, the petitioner could not repay the loan amount in installments as scheduled and that, taking note of his plight direction be issued to the respondents to reconsider his representation dated 04.08.2017.
6. Though averments have been made, assailing the sale notice dated 31.07.2017, during the course of hearing, Mr. M.Bharath, learned counsel for the petitioner did not urge the same, but insisted that the petitioner be given an opportunity to repay the loan in installments.
7. Heard the learned counsel for the petitioner and perused the materials available on record.
8. Loan availed has been admitted. As loan amount has not been paid, consequent to default, loan account has been classified as Non Performing Asset as on 19.04.2017.
9. Thereafter, bank has issued notice under Section 13(2) dated 20.04.2017, demanding a sum of Rs.39,18,843/-, to be paid within 60 days from the date of receipt of the notice, failing which, bank would be exercising the powers under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 against the secured assets. Material on record does not disclose as to whether the petitioner has sent any reply/representation under Section 13(3-A) of the SARFAESI Act, 2002.
10. According to the petitioner, he was regular in making the payment, when he was employed and both the pet
