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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M. S. Sahoo, JJ.
Purusottam Bindhani – Appellant
Versus
Uco Bank, Balasore & Anr. – Respondents
Writ Petition (C) No. 20171 of 2020
Decided On : 09-01-2023
SARFAESI Act - Home Loan - The court dismissed the writ petition challenging the demand notice issued under Section 13(2) of the SARFAESI Act, 2002, recalling the outstanding liability of a home loan due to default in payment of installments.
Fact of the Case:
The petitioner raised a home loan with a co-borrower from a bank. The challenge in the petition was to the demand notice recalling the outstanding liability due to default in payment of installments.
Finding of the Court:
The court dismissed the writ petition, stating that the challenge to the demand notice was not maintainable under the SARFAESI Act, 2002.
Issues: Challenge to demand notice under SARFAESI Act
Ratio Decidendi: The court found that a simplicitor challenge to the demand notice was not maintainable under the SARFAESI Act, 2002.
Final Decision: The writ petition was dismissed.
JUDGMENT
1. The petitioner is stated to have raised a Home Loan of Rs.6,50,000/- along with his co-borrower wife-Mrs. Kalpana Bindhani on 27.10.2005 from UCO Bank, Balasore.
2. The challenge in the present writ petition is to the demand notice dated 04.06.2012 issued under Section 13(2) of the SARFAESI Act, 2002 recalling the aggregate outstanding liability of Rs.6,60,963/- due as on 31.03.2012 together with future interest and incidental charges, costs etc.
3. None had appeared on behalf of the petitioner on the previous date, and Mr. B.B. Swain on the asking of the Court had put in appearance and was directed to seek instructions from the Bank.
4. At the time of resumed hearing today, Mr. Swain states that the impugned demand notice was withdrawn in view of the petitioner having regularized his account in the year 2012. However, for default of the payment of the installments, the loan account has been now declared NPA on 30.09.2022 and a fresh demand notice issued on 27.10.2022. He further submits that a simplicitor challenge to the demand notice is otherwise not maintainable in view of the Scheme of the SARFAESI Act, 2002.
None has put in appearance on behalf of the petitioner to controvert the stand of the Bank.
5. In view of the above, the writ petition is dismissed.
The SARFAESI Act, 2002 does not allow a simplicitor challenge to the demand notice for outstanding liabilities.
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....
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 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's decision was influenced by the bank's provision of the statement detailing the amount due, which addressed the petitioner's grievance.
The court affirmed that non-compliance with interim orders precludes entertaining writ petitions in light of available statutory remedies.
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