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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M.S. Sahoo, JJ.
Manoj Kumar Sahu & Anr. – Appellants
Versus
Branch Manager, State Bank of India, Karlamunda Branch, Dist Kalahandi & Anr. – Respondents
Writ Petition (C) No. 37918 of 2021
Decided On : 13-12-2022
SARFAESI Act - Loan Default - The court dismissed the challenge to the demand notice issued under Section 13(2) of the SARFAESI Act, 2002, stating that it was not maintainable at that stage.
Fact of the Case:
The petitioner defaulted on a loan from State Bank of India and challenged the demand notice issued under SARFAESI Act.
Finding of the Court:
The court dismissed the challenge as not maintainable and allowed the withdrawal of the writ petition to pursue remedy before the bank.
Issues: Challenge to demand notice under SARFAESI Act
Ratio Decidendi: Challenge to demand notice under SARFAESI Act not maintainable at that stage
Final Decision: The writ petition was dismissed as withdrawn with liberty to pursue remedy before the bank.
JUDGMENT
1. The Petitioner No.1 is a defaulting borrower of a loan facility availed for a sum of Rs.7 lakhs from State Bank of India, Karlamunda Branch, Dist-Kalahandi on 19.08.2015. Due to non-deposit of installments, the loan account was classified as NPA on 28.05.2018. The Bank then issued a demand notice dated 26.08.2021 under Section 13(2) of the SARFAESI Act, 2002 recalling the outstanding liability of Rs.9,75,318/-. The Petitioner No.1 is stated to have filed a representation dated 17.09.2021 (Annexure-2) to the aforesaid notice requesting for restructure the payment of the loan installments.
2. By filing the present Writ Petition, a challenge has been laid to the aforesaid demand notice. However, keeping in view the scheme of the SARFAESI Act, 2002, a challenge to the same is not maintainable at this stage.
3. At the time of argument, learned counsel for the petitioners prays for permission to withdraw the Writ Petition to enable his client to pursue his remedy before the Bank.
A Memo to that effect has been filed in the Court today.
4. In view of the Memo filed, the Writ Petition is dismissed as withdrawn with the aforesaid liberty.
Challenge to demand notice under SARFAESI Act not maintainable at initial stage
Dismissal of writ petition as infructuous due to closure of loan account
Compliance with court orders and instructions is crucial in legal proceedings, and failure to do so can result in dismissal of petitions.
The court's decision was based on the petitioner's request to withdraw the writ petition and pursue available remedies before the finance company.
The SARFAESI Act, 2002 does not allow a simplicitor challenge to the demand notice for outstanding liabilities.
The court's decision was influenced by the provisions of the SARFAESI Act, 2002, specifically Section 13(4), which allowed for the upgrade of the loan account to a standard account upon the deposit o....
The court affirmed that non-compliance with interim orders precludes entertaining writ petitions in light of available statutory remedies.
The SARFAESI Act, 2002 provides for the recovery process and issuance of demand notices for defaults in payment, and the court's decision was based on the petitioner's withdrawal of the Writ Petition....
The court's decision was influenced by the petitioners' unconditional withdrawal of the writ petition.
The petitioner's failure to comply with installment payment directions led to dismissal of the writ petition, as remedies lie within pending proceedings.
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