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2016 Supreme(Ori) 44
IN THE HIGH COURT OF ORISSA, CUTTACK
PRADIP MOHANTY AND BISWAJIT MOHANTY, JJ.
Sonali Mohapatra @ Panda - Petitioner
versus
State Bank of India, Commercial Branch IDCOL and another - Opp. Parties
W.P.(C) No.8993 of 2013
Decided On : 22-01-2016
For the Appellant : M/S. Prashanta Kishore Ray & N. Dash
For the Opp. Parties :Mr.R.K.Rath (Senior Advocate) and Himansu Patnaik
The court emphasized the importance of upholding the rights of individuals and ensuring the proper application of legal provisions, particularly in matters related to the enforcement of security interests and possession of properties.
Headnote:
Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Quashing of Notice - Section 13 - Summary of Acts and Sections: Section 13 - The court quashed the notice under Section 13(2) as it included joint properties of the petitioner released from mortgage earlier, but dismissed the quashing of possession notice under Section 13(4) as it did not cover the petitioner's properties. The court directed the return of title deeds of the plots covered by Annexure-2 to the petitioner and her co-owner.
Fact of the Case:
The petitioner sought to quash a notice issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and a possession notice issued under Section 13(4). The petitioner also requested the return of original title deeds of certain properties.
Finding of the Court:
The court quashed the notice under Section 13(2) as it included joint properties of the petitioner released from mortgage earlier, but dismissed the quashing of possession notice under Section 13(4) as it did not cover the petitioner's properties. The court directed the return of title deeds of the plots covered by Annexure-2 to the petitioner and her co-owner.
Issues: The issues involved the validity of the notices issued under Section 13(2) and Section 13(4) of the Act, and the return of title deeds of certain properties.
Ratio Decidendi: The court found that the inclusion of joint properties of the petitioner in the notice under Section 13(2) was arbitrary and violated Article 14 of the Constitution. The possession notice under Section 13(4) was not quashed as it did not cover the petitioner's properties. The court directed the return of title deeds of the plots covered by Annexure-2 to the petitioner and her co-owner.
Final Decision: The writ application was partly allowed, quashing the notice under Section 13(2) and directing the return of title deeds, but dismissing the quashing of the possession notice under Section 13(4).
JUDGMENT :
Biswajit Mohanty, J.
The petitioner has filed the present writ application praying for quashing of notice dated 9.1.2013 (Annexure-1) issued by the opposite parties under Sub-section (2) of Section-13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and possession notice dated 27.3.2013 (Annexure-8) issued in exercise of powers conferred under Sub-section (4) of Section-13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner has also prayed for a direction to the opposite parties to return the original title deeds within a stipulated time to enable her to utilize the same for a fruitful purpose and to pay damages for withholding the said title deeds since 15.4.2010.
2. The case of the petitioner is that one M/s. Konark Cylinder & Containers Pvt. Ltd. availed credit facilities from the opposite parties-Bank. In order to secure such loan, initially the petitioner was a guarantor as well as mortgager. Later on vide Annexure-2 dated 15.4.2010, the Bank has released the properties given on mortgage by the petitioner and one Smt. Rajashree Das covering five plots. It has been asserted by the petitioner that all the properties indicated under Annexure-2 stood in the name of the petitioner and Smt. Rajashree Das. Vide Annexure-4 dated 11.7.2011, the Bank intimated the Managing Director of M/s. Konark Cylinder & Containers Pvt. Ltd that its existing working capital limits stood renewed for a further period of 12 months and that apart a WCTL of Rs.3.50 Crores has been sanctioned by carving out the limit from existing Bank Guarantee limit. But it further made clear that the renewal of working capital limits and sanction of WCTL of Rs.3.50 Crores as indicated in Annexure-4 were subject to the terms and conditions as set out in Annexures-A to D attached to Annexure-4. Annexure-A deals with collateral security and reflects the names of guarantors. According to the learned counsel for the petitioner, Annexure-4 shows that while renewing the working capital limits and sanction of WCTL of Rs.3.50 Crores, neither the petitioner nor Smt. Rajashree Das has been shown as a guarantor nor the lands covered by Annexure-2 belonging to both of them have been reflected there in Annexure-A attached to Annexure-4. On 4.7.2012 vide Annexure-6, a request was made for release of mortgage documents of the petitioner and Smt. Rajashree Das pertaining to plots covered under Annexure-2. On 8.1.2013 vide Annexure-7, the Managing Director of M/s. Konark Cyclinder and Containers Pvt. Ltd. was directed to make payment of entire outstanding of Rs.17,42,64,572.00. On 9.1.2013 vide Annexure-1, the opposite parties issued notice to the guarantors and borrower under Sub-section (2) of Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, for short “the Act” to make payment of the demanded amount within 60 days. It was also indicated therein that the guarantors and the borrower were also liable to pay future interest at the contractual rate on the aforesaid amount together with incidental expenses, cost, charges, etc. It was also made clear that if the guarantors & borrower failed to repay the indicated sum of Rs.17,42,64,572/-as on 8.1.2013 with future interest and incidental expenses, costs, etc., the Bank would exercise all or any of the rights detailed under Sub-section (4) of Section 13 of “the Act”. Further, it is the case of the petitioner that being compelled, M/s. Konark Cylinder & Containers Pvt. Ltd. filed W.P.(C) No.5539 of 2013 praying therein for quashing of the notice dated 9.1.2013 under Annexure-1 along with Misc. Case No.5217 of 2013 in which it had prayed for interim stay of operation of the said notice dated 9.1.2013. In the said writ application, notice was issued on 26.3.2013 and as an interim measure, it was directed that operation of notice dated 9
