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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M.S. Sahoo, JJ.
Sanjukta Mohanty & Anr. – Appellants
Versus
Branch Manager, Repco Home Finance Ltd. Cuttack – Respondent
Writ Petition (C) No. 21755 of 2022
Decided On : 13-12-2022
SARFAESI Act - Demand Notice - The court dismissed the writ petition challenging the demand notice issued under Section 13(2) of the SARFAESI Act, 2002, allowing the petitioner to pursue available remedies before the finance company.
Fact of the Case:
The petitioner defaulted on a house building loan and challenged the demand notice issued under Section 13(2) of the SARFAESI Act, 2002, seeking settlement under an OTS scheme.
Finding of the Court:
The court dismissed the writ petition as withdrawn, granting the petitioner liberty to pursue available remedies before the finance company.
Issues: Default on loan, challenge to demand notice, settlement under OTS scheme.
Ratio Decidendi: The court's decision was influenced by the petitioner's request to withdraw the writ petition and pursue available remedies before the finance company.
Final Decision: The writ petition was dismissed as withdrawn, allowing the petitioner to pursue available remedies before the finance company.
JUDGMENT
1. Petitioner No.1 is a defaulting borrower in a house building loan availed for a sum of Rs.6,00,000/- (Rupees six lakhs) from REPCO Home Finance Ltd., Cuttack on 20th May, 2016. Due to non-deposit of the instalments, the loan account was classified as NPA on 2nd May, 2017 and a Demand Notice under Section 13(2) of the SARFAESI Act, 2002 has been issued on 20th September, 2021 recalling the outstanding liability of Rs.7,00,000/- (Rupees seven lakhs).
2. The challenge raised in the instant Writ Petition is to the aforesaid Demand Notice (Annexure-1); with a further prayer for directing the Bank to settle the loan account under an OTS scheme without however referring to any prevailing scheme.
3. At the outset, learned counsel for the petitioner prays for permission to withdraw the present Writ Petition to enable the petitioner to pursue her available remedies before the Finance Company.
4. In view of the above, the present Writ Petition is dismissed as withdrawn with the aforesaid liberty.
The court's decision was based on the petitioner's request to withdraw the writ petition and pursue available remedies before the finance company.
Challenge to demand notice under SARFAESI Act not maintainable at initial stage
The SARFAESI Act, 2002 does not allow a simplicitor challenge to the demand notice for outstanding liabilities.
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 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....
Dismissal of writ petition as infructuous due to closure of loan account
The bank's right to take actual possession of the secured asset under the SARFAESI Act, 2002 upon default by the borrower.
The court's decision was influenced by the bank's provision of the statement detailing the amount due, which addressed the petitioner's grievance.
The withdrawal of a demand notice under the SARFAESI Act negates the basis for any pending proceedings, affirming the borrower's non-default status.
The court upholds the right to regularize a housing loan and outlines repayment terms while suspending coercive recovery.
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