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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M.S. Sahoo, JJ.
Mukunda Chandra Parida – Appellant
Versus
Chief Manager, State Bank of India, Balasore & Anr. – Respondents
Writ Petition (C) No. 25184 of 2014
Decided On : 07-12-2022
SARFAESI Act - Possession Notice - The court dismissed the writ petition challenging the possession notice issued under Section 13(4) of the SARFAESI Act, 2002, due to the petitioner's failure to deposit the required amount as per the interim protection granted by the court.
Fact of the Case:
The petitioner defaulted on a loan from the State Bank of India, leading to the issuance of a possession notice under Section 13(4) of the SARFAESI Act, 2002. The petitioner failed to deposit the required amount as per the interim protection granted by the court.
Finding of the Court:
The court dismissed the writ petition as withdrawn due to the petitioner's failure to comply with the interim protection order and the petitioner's counsel expressing no instructions to pursue the petition.
Issues: Default on loan, possession notice under SARFAESI Act, compliance with interim protection order, withdrawal of writ petition.
Ratio Decidendi: The court's decision was influenced by the petitioner's failure to comply with the interim protection order and the lack of instructions from the petitioner's counsel to pursue the writ petition.
Final Decision: The writ petition was dismissed as withdrawn due to the petitioner's failure to comply with the interim protection order and the lack of instructions from the petitioner's counsel to pursue the petition.
JUDGMENT
1. Petitioner is a defaulting borrower to a loan of Rs.1,50,000/- availed from the State Bank of India, Soro Branch, Soro, in the district of Balasore. Due to non-deposit of the installments regularly, the loan account was classified as NPA leading to issuance of a demand notice dated 10.12.2013 under Section 13(2) of the SARFAESI Act, 2002 (for short 'the Act, 2002') recalling the outstanding liability of Rs.2,48,550/- along with future interest and incidental expenses. Thereafter symbolic possession of the mortgaged property was assumed on 24.02.2014 by issuance of a notice under Section 13(4) of the Act, 2002.
2. Challenge in the present writ petition is to the aforesaid possession notice dated 24.02.2014.
3. This Court while issuing notice vide order dated 29.01.2015 had granted the following interim protection:
'Misc. Case No.22542 of 2014
No coercive action shall be taken against the assets mortgaged by the petitioner subject to petitioner depositing a sum of Rs.50,000/- (rupees fifty thousand) before the opposite party-bank within a period of four weeks.
Issue urgent certified copy of the order on proper application.'.
As per the Office report, no proof of deposit of the aforesaid amount was submitted.
4. At the time of hearing, learned counsel for the petitioner states that he has no instructions in respect of the payment of the required amount in terms of the aforesaid order dated 29.01.2015 nor does he has any instructions to pursue the present writ petition. Thus, he prays for permission to withdraw the present writ petition.
5. In view of the above, the writ petition is dismissed as withdrawn.
Compliance with court orders and instructions is crucial in legal proceedings, and failure to do so can result in dismissal of petitions.
Challenge to demand notice under SARFAESI Act not maintainable at initial stage
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 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 bank's right to take actual possession of the secured asset under the SARFAESI Act, 2002 upon default by the borrower.
Dismissal of writ petition as infructuous due to closure of loan account
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 SARFAESI Act, 2002 does not allow a simplicitor challenge to the demand notice for outstanding liabilities.
Court allowed repayment of overdue housing loan amounts in installments, establishing conditions to prevent coercive bank action.
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