The availability of an alternate remedy under the SARFAESI Act and the pendency of a writ petition not being a bar for the bank to take measures for recovery.

S. Manikumar, J.

1. Petitioner has availed a Term Loan from Indian Overseas Bank, Chennai, for purchase of house under the Home Loan Scheme. According to the petitioner, she has paid a sum of Rs.12,09,207/- to the vendor towards land cost and construction. A sum of Rs.50 Lakhs was availed as loan on 12.09.2011 and as per the terms and conditions, she has to repay the same by EMI of Rs.54,250/- per month, inclusive of interest for 240 months. Petitioner has further submitted that till October 2015, she was making payment promptly. Her husband fell sick. Business came to stand still and therefore, she could not repay the EMI for about eight months, due to paucity of funds.

2. Petitioner has further contended that even before the demand notice dated 17.04.2017 was issued under Section 13(2) of the SARFAESI Act, 2002, she made an attempt to settle the loan account and hence, sent a representation dated 07.04.2017 to the bank. As the said representation, was not answered, petitioner has filed, WP No.28466 of 2018, for a writ of mandamus, directing the respondent to consider the representation dated 07.04.2017. Though notice has been ordered, respondent has not entered appearance.

3. Demand notice dated 07.04.2017, is followed with possession notice dated 02.03.2018, issued under Section 13(4) of the SARFAESI Act, 2002. Petitioner is stated to have challenged the said possession notice before the Debts Recovery Tribunal-II, Chennai.

4. Now bank has issued E-auction sale notice dated 05.10.2018 under Rule 8(6) and 9(1) of the Security Interest (Enforcement) Rules, 2002. To quash the same, instant writ petition is filed.

5. Inviting the attention of this Court to the definition 2(zf) “Security Interest”, and a decision of the Honble Division Bench of Orissa High Court in Subash Chandra Panda Vs. State of Orissa & Ors., reported in I (2009) BC 443 (DB), Mr.S.N.Amarnath, learned counsel for the petitioner submitted that there should be a creation of security interest in terms of Section 2(zf) of SARFAESI Act, 2002 and that registration of the memorandum of title deeds, as per the provisions of the Registration Act, are mandatory. Learned counsel for the petitioner further submitted that merely because title deeds are deposited with the bank, it would not create any security interest.

6. Placing emphasis on the word “created”, learned counsel for the petitioner submitted that in the absence of satisfaction of the above said provision viz., 2(zf), as mandated under the SARFAESI Act, 2002, sale notice issued, is liable to be set aside.

7. Though the instant sale notice is challenged on the above said grounds, having regard to the availability of an alternate remedy under the SARFAESI Act, 2002 we are not inclined to delve into the above said grounds On this aspect, we deem it fit to consider few judgments. (i) In Precision Fastenings v. State Bank of Mysore, reported in 2010(2) LW 86, this Court held as follows:

"This Court has repeatedly held in a number of decisions right from the decision in Division Electronics Ltd. v. Indian Bank (DB) Markandey Katju, C.J., (2005 (3) C.T.C., 513), that the remedy of the aggrieved party as against the notice issued under Section 13(4) of SARFAESI Act is to approach the appropriate Tribunal and the writ petition is not maintainable. The same position has been succinctly stated by the Hon'ble the Supreme Court in Transcore v. Union Of India (2006 (5) C.T.C. 753) in paragraph No. 26 wherein the Supreme Court has held as under:—

“The Tribunal under the DRT Act is also the Tribunal under the NPA Act. Under Section 19 of the DRT Act read with Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (1993 Rules), the applicant bank or FI has to pay fees for filing such application to DRT under the DRT Act and, similarly, a borrower, aggrieved by an action under Section 13(4) of NPA Act was entitled to prefer an Application to the DRT under Section 17 of NPA.” (Emphasis added) " (ii) In Union Bank of Ind