Back
2017 Supreme(Mad) 2233
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, V. BHAVANI SUBBAROYAN, JJ.
P. Jeyakumar - Petitioner
Vs
The Regional Director, Reserve Bank of India – Respondent
Writ Petition No.20930 of 2017
Decided on : 08-08-2017
Advocate Appeared:
For the Petitioner: Mr.G.Karthikeyan
The central legal point established in the judgment is the interpretation of the SARFAESI Act and the definition of 'financial institution' under Section 2(1)(m)(iv), emphasizing the importance of ascertaining the legal and factual position before filing a writ petition.
Headnote:
SARFAESI Act - Financial Institution - Section 14, Section 2(1)(m)(iv) - Summary of Acts and Sections: The court discussed the applicability of the SARFAESI Act and the definition of 'financial institution' under Section 2(1)(m)(iv) in relation to the Housing Development Finance Corporation Ltd. The judgment referenced Notification No. So.1282 (E), dated 10th November 2003, and the definition of 'financial institutions' in the National Housing Bank Act, 1987. The court also considered the doctrine of 'legislation by reference' and 'legislation by incorporation' and referred to relevant case law to interpret the legal provisions.
Fact of the Case:
The borrower availed a loan from Housing Development Finance Corporation Ltd. and faced legal proceedings under Section 14 of the SARFAESI Act. The petitioner filed a writ petition challenging the actions of the respondents.
Finding of the Court:
The court dismissed the writ petition, stating that the petitioner filed the petition without ascertaining the legal and factual position, and the same was misconceived.
Issues: The issues involved the applicability of the SARFAESI Act, the definition of 'financial institution' under Section 2(1)(m)(iv), and the legality of the actions taken by the respondents.
Ratio Decidendi: The court's decision was based on the finding that the petitioner filed the writ petition without ascertaining the legal and factual position, rendering it misconceived.
Final Decision: The writ petition was dismissed with no costs.
S.Manikumar, J
Borrower, who has availed loan of Rs.5,25,000/-, from Housing Development Finance Corporation Ltd., Chennai, has agreed to pay interest, at the rate of 7.5% p.a., on a monthly instalment of Rs.4,310/-, to be paid for 240 months, from 21/9/2004 to 4/6/2007. The petitioner/borrower, has to pay a sum of Rs.2,06,080/-, in 48 equal monthly instalments. According to him, due to the sudden demise of his parents, he could not repay the loan.
2. On 29/8/2011, Housing Development Finance Corporation Limited, Chennai/fourth respondent herein filed Crl.M.P.No.1167 of 2011, under Section 14 of the SARFAESI Act, on the file of the learned Chief Judicial Magistrate, Tiruvallur, praying to appoint an Advocate Commissioner or Court Receiver, to take physical possession of the property, mortgaged with the Bank.
3. On 4/6/2013, an order, under Section 14 of the SARFAESI Act, 2002 was passed by the learned Chief Judicial Magistrate, Thiruvallur, and pursuant to the same, the Advocate Commissioner, took possession of the mortgaged property, and filed a report, on 21/8/2013.
4. Subsequent to taking of possession, the fourth respondent, issued a sale notice, by way of paper publication. Thereafter, a sum of Rs.2,00,000/- was paid. Writ petitioner has sought for time. As the Bank did not heed to the request, the writ petitioner was constrained to file S.A.No.359 of 2013, for stay of sale notice.
5. By order, dated 24/12/2013, the Debts Recovery Tribunal, Chennai, passed a conditional order, directing the petitioner, to deposit a sum of Rs.3,12,000/-, which was paid. The petitioner made a further payment of Rs.2,75,340/- and Rs.4,80,000/-, on 22/3/2014 and 30/10/2014, respectively. According to the petitioner, proceedings were closed, and possession of the property was handed over to him.
6. By communication, dated 5/5/2015, the petitioner was informed by the Reserve Bank of India that the fourth respondent herein was not registered, under Section 3 of the SARFAESI Act, 2002, with Reserve Bank of India, to commence the business of Securitisation/Asset Reconstruction. Reserve Bank of India, in its reply, dated 5/5/2015, stated that HDFC Ltd., is not registered, under Section 3 of the SARFAESI Act, 2002. Thereafter, the petitioner made a representation, dated 20/8/2016, to the Reserve Bank of India, Mumbai and Reserve Bank of India, Chennai, to initiate action against the fourth respondent, for taking possession of the mortgaged property and thus, causing hardship to the writ petitioner.
7. Material on record discloses that vide reply, dated 5/10/2016, office of the Banking Ombudsman, has sent a letter, to the writ petitioner, stating that the complaint raised by the writ petitioner does not fall under clause 3 (5) of Banking Ombudsman Scheme, 2006 (Scheme) and hence, Banking Ombudsman was unable to interfere in the matter. However, the Ombudsman has forwarded a complaint to the National Housing Bank (NHB), for necessary action. Thereafter, the petitioner has sent a registered letter, dated 24/11/2016, to the National Housing Bank, Nandanam, asking for the details of the status of the complaint made against HDFC Bank.
8. Responding to the above, National Housing Bank, Chennai has sent a reply, dated 7/10/2016, stating that the Company has been notified, under Section 2 (1) (m) (iv) of the Act, on 10/11/2003 and that measures had been taken under Section 13 (4) of the SARFAESI Act.
9. Placing reliance on the reply given by the Reserve Bank of India, dated 5/5/2015, communication of Ombudsman, forwarding the complaint of the writ petitioner, and the reply of the National Housing Bank, dated 7/10/2016, instant writ petition has been filed, for issuance of a writ of certiorarified mandamus, to quash the order passed by the third respondent, dated 18/5/2017 and consequently, direct the respondents 1 and 3, to conduct proper enquiry into th
