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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M. S. Sahoo, JJ.
M/s. Encore Asset Reconstruction Company Private Limited – Appellant
Versus
Punjab National Bank, Bhubaneswar & Ors. – Respondents
Writ Petition (C) No. 40887 of 2023
Decided On : 10-01-2023
e-auction Sale Notice - Mortgage Property - The court dismissed the Writ Petition challenging the e-auction Sale Notice for a mortgaged property, as the property had not been sold in the auction.
Fact of the Case:
The petitioner-company claimed to be an assignee of a loan availed by M/s. Kala Shreemukha, and challenged the e-auction Sale Notice for a mortgaged property.
Finding of the Court:
The court dismissed the Writ Petition as infructuous, as the property in question had not been sold in the auction.
Issues: Challenge to e-auction Sale Notice
Ratio Decidendi: The court found that the Writ Petition was infructuous due to the property not being sold in the auction.
Final Decision: The Writ Petition stands dismissed as infructuous.
JUDGMENT
1. Petitioner-company claims to be an assignee of a loan availed by M/s. Kala Shreemukha (Opposite Party No.4), a proprietorship concern of Mr. Niranjan Sahoo from DCB Bank Limited/Opposite Party No.9. The said loan account was classified as NPA on 29.11.2020, upon default in payment of instalments leading to the petitioner filing an Original Application before the DRT, Cuttack.
2. The challenge in the present Writ Petition is to the e-auction Sale Notice dated 7th December, 2021 issued by Punjab National Bank, Ashok Nagar Branch, Bhubaneswar putting the mortgaged property inter alia property no.13 to auction sale on 24th December, 2021 in respect of the property offered as collateral security in the loan of M/s. Kala Shreemukha (Opposite Party No.4) towards recovery of an outstanding liabilities of Rs.11,31,77,286/-along with future interest and incidental expenses etc. The details of the above mortgaged property no.13 is extracted below:
'Hal Khata No.D1-14, Hal Plot No.1428/2039, Area Ac.0.200 Decimal, Correspond to Khata No.14, Mouza Junei, Ranapada, Konark, Tahasil-Gop, District-Puri.'
3. It is claimed that the aforesaid property no.13 stands mortgaged in the defaulting loan account of M/s. Kala Shreemukha (Opposite Party No.4) with the petitioner and has no charge of the Punjab National Bank qua the other loan availed by M/s. Kala Shreemukha (Opposite Party No.4) from the said Bank.
4. At the time of resumed hearing today, learned counsel for the petitioner prays for disposing of the present Writ Petition in view of the said property no.13 of the Sale Notice having not been sold in the said auction.
5. In view of the above, the present Writ Petition stands dismissed as infructuous.
The court's decision was based on the property not being sold in the auction, rendering the Writ Petition infructuous.
The court upheld the validity of the auction sale of mortgaged properties for recovery of outstanding liability and granted the petitioner permission to pursue remedies before the DRT.
The validity of the sale/e-auction notice under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002.
The remedy for seeking details of the loan account was available to the petitioner by making a proper application before the DRT itself.
A loan classified as Non-Performing Asset must adhere to criteria set by the Reserve Bank of India; effective alternative remedies must be pursued before invoking writ jurisdiction.
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