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2017 Supreme(Mad) 2128
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, V. BHAVANI SUBBAROYAN, JJ.
N. Sivakumar – Petitioner
Versus
The Chief Manager, Central Bank of India, Chennai – Respondent
W.P. No. 21346 of 2017 and W.M.P. No. 22279 of 2017
Decided On : 10-08-2017
For the Petitioner: Mr. S. Senthil Nathan.
The main legal point established in the judgment is the finality and enforceability of settlements reached before the Lok Adalat, emphasizing the binding effect of such settlements as decrees.
Headnote:
certiorarified mandamus - SARFAESI Act - Section 13(2), Section 13(4), Section 13(8) - The court discussed the provisions of the SARFAESI Act, particularly Section 13(2), Section 13(4), and Section 13(8), and their implications on the recovery measures taken by the bank. The court emphasized the finality of the award passed by the Lok Adalat and the binding effect of the settlement reached, highlighting the legal principles of compromise and the enforceability of the award as a decree.
Fact of the Case:
The borrower sought to quash a letter from the Central Bank of India, claiming that previous payments were not considered by the bank. The bank had issued multiple possession notices and demand notices under Section 13(2) of the SARFAESI Act. The borrower and the bank entered into a settlement before the Lok Adalat, but the borrower failed to make the agreed payments.
Finding of the Court:
The court found that the settlement reached before the Lok Adalat was binding and enforceable as a decree. The court disapproved the borrower's argument that the bank's actions were vitiated, emphasizing the finality of the settlement and the borrower's obligation to adhere to the payment terms.
Issues: The issues involved the borrower's challenge to the bank's recovery measures, the enforceability of the settlement reached before the Lok Adalat, and the borrower's failure to make the agreed payments.
Ratio Decidendi: The court held that the settlement reached before the Lok Adalat was final and binding, akin to a decree, and the borrower's failure to make the payments as per the settlement terms was not acceptable.
Final Decision: The writ petition was dismissed, and the court imposed a cost of Rs. 10,000 on the petitioner for failing to adhere to the settlement terms.
1. Material on record discloses that the borrower, has sought for a writ of certiorarified mandamus to quash a letter dated 21.07.2017 of the Central Bank of India, Chennai, 1st respondent on the grounds inter-alia that amounts paid earlier, by him have not been taken note of by the bank. According to him, his right under Section 13(8) of the SARFAESI Act, 2002, still continues.
2. Mr. S. Senthil Nathan, learned counsel for the petitioner submitted that demand notice dated 10.04.2014 has been issued directing the petitioner to pay a sum of Rs. 65,55,150/-. Thereafter, possession notice has been issued on 06.11.2014, reiterating the amount. Another possession notice was issued on 16.09.2015 followed by a demand notice dated 30.09.2015, for a sum of Rs. 70,16,489/- due and payable as on 22.09.2015. Another possession notice dated 19.12.2015, was issued. According to the petitioner, bank has no right to issue repeated possession notices and that therefore, action taken to recover the alleged arrears, is vitiated. He also submitted that before the Tamil Nadu State Legal Services Authority, the writ petitioner/borrower, was made to stand before a lion and that the said authority has not taken note of the payments made.
3. Heard the learned counsel for the petitioner and perused the materials available on record.
4. Perusal of the notice dated 10.04.2014 issued under Section 13(2) of the SARFAESI Act, 2002, shows that M/s. SSEI Crushers (P) Ltd. Chennai, has availed loan of Rs. 60 Lakhs. As on 07.04.2014, a sum of Rs. 65,55,150/- was due and payable and therefore, the bank has issued demand notice dated 10.04.2014 under Section 13(2) of the SARFAESI Act, 2002, requesting the petitioner to repay the abovesaid amount. Details of the property mortgaged mentioned in the notice under Section 13 of the Act are as hereunder:-
| Survey Details | Extent Area/building | Registration District etc. |
| S. No. 166/3B, Patta No. 4376, as per Patta S. No. 166/22 | All that piece and parcel of land and building bearing Plot No. 22, Door No. 1/24-A, Venkateswara Nagar, 2nd Main Road, Chennai-600089 land measuring an extent of 2756 sq. ft. and Building in Ground Floor having plinth area of 2000 sq. ft. situated in Ramapuram Village, Ambattur Taluk, Thiruvallur District. | Sub Registration District of Saidapet Joint II and Registration District of South Chennai. |
House site situate within the boundaries of:-
| North by | Plot No. 23 |
| South by | Plot No. 21 |
| East by | 30 feet wide pathway |
| West by | Land in Survey No. 166/3A |
| And measuring | |
| East to West on Northern Side | 84 feet |
| East to West on Southern Side | 83 feet |
| North to South on Eastern side | 31 feet |
| North to South on Western side | 35 feet |
| In all admeasuring | 2756 sq. ft. |
Description of Properties standing in the name of Mr. N. Sivakumar
| Survey Details | Extent Area/building | Registration District etc. |
| S. No. 154/1, Menambedu Village, Ambattur Taluk, Thiruvallur District | Schedule A: All that piece and parcel of land and building bearing Old No. 60, New No. 20, Chitti Babu Naidu Street, DABC Lay Out, Menambedu, Ambattur, Chennai 600053, measuring an extent of 3632 sq. ft. Plot No. 105 & 106. Out of the property in Schedule A. | Sub Registration District of Ambattur and Registration District of North Chennai. |
| Schedule B: All that piece and parcel of vacant land situated at Plot No. 105 & 106, Chitti Babu Naidu Street, DABC Lay Out, measuring 1202.6 sq. ft. together with building in Ground Floor and First Floor having plinth area of 920 sq. ft. each and in second floor 200 sq. ft. |
House site situate within the boundaries of:-
|
| Schedule A | Schedule B |
| North by | Chitti Babu Naidu Street | Balance land belonging to owner Mr. R. Janakiraman |
