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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M. S. Sahoo, JJ.
Kaiti Karneli – Appellant
Versus
Regional Branch Manager, Axis Bank, Bhubaneswar & Anr. – Respondents
Writ Petition (C) No. 35163 of 2022
Decided On : 09-01-2023
SARFAESI Act, 2002 - Recovery Process - Demand Notice - Restructuring of Accounts
Fact of the Case:
The petitioner, a proprietor of S.K. Aqua Solution Enterprises, faced recovery process under the SARFAESI Act, 2002 due to defaults in payment for an overdraft facility and a term loan. The demand notice was challenged in the Writ Petition, with a prayer for restructuring the accounts. However, the petitioner later unconditionally withdrew the petition due to an OTS application pending consideration with the Bank.
Finding of the Court:
The Writ Petition was dismissed as withdrawn following the unconditional withdrawal by the petitioner.
Issues: Challenge to demand notice under SARFAESI Act, 2002 and prayer for restructuring of accounts.
Ratio Decidendi: The court's decision was influenced by the unconditional withdrawal of the Writ Petition by the petitioner.
Final Decision: The Writ Petition was dismissed as withdrawn.
JUDGMENT
1. The petitioner is the proprietor of S.K. Aqua Solution Enterprises against whom recovery process under the SARFAESI Act, 2002 (for short 'the Act, 2002') has been initiated by issuance of demand notice dated 06.09.2022 under Section 13(2) of the Act, 2002 for the defaults of payment in an overdraft facility and a term loan resulting into both the accounts being declared NPA and thus recall of an aggregate amount of Rs.20,05,775.75/- due as on 05.09.2022 in both the accounts.
2. Challenge in the present Writ Petition is to the aforesaid demand notice with a further prayer for directing the Axis Bank, Mandiapali Branch, Gopalpur, Dist- Ganjam to restructure the accounts.
3. At the time of hearing, learned counsel for the petitioner prays for an unconditional withdrawal of the Writ Petition in view of the OTS application filed by the petitioner pending consideration with the Bank. 4. A Memo dated 09.01.2023 of withdrawal is filed in the Court and the same be placed on record. 5. In view of the Memo filed, the Writ Petition is dismissed as withdrawn.
Challenge to demand notice under SARFAESI Act not maintainable at initial stage
Dismissal of writ petition as infructuous due to closure of loan account
Failure to comply with court orders and failure to clear outstanding liabilities can lead to dismissal of a writ petition.
The court's decision was influenced by the petitioners' unconditional withdrawal of the writ petition.
The SARFAESI Act, 2002 does not allow a simplicitor challenge to the demand notice for outstanding liabilities.
Failure to comply with a sanctioned compromise proposal for depositing the balance amount within the stipulated time may result in the dismissal of a writ petition seeking extension of time for depos....
The SARFAESI Act provides specific remedies for grievances, and borrowers do not have a vested right to One Time Settlement benefits, which are subject to the bank's discretion.
The court's decision was based on the petitioner's request to withdraw the writ petition and pursue available remedies before the finance company.
Settlement of loan dues under the OTS Scheme renders the Writ Petition infructuous.
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