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High Court of Madhya Pradesh
Sujoy Paul, Prakash Chandra Gupta, JJ.
MANISH SHARMA – APPELLANT
Versus
BANK OF INDIA, JABALPUR & ANR. – RESPONDENTS
W. P. No. 2285 of 2022
Decided On : 22-06-2022
Mandamus - Recovery of Financial Assets - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI ACT) - Section 13(2) and 13(4) - The court discussed the petitioner's plea for a writ of mandamus to direct the Respondents to issue a no dues certificate and release the title deed of the mortgaged property. The petitioner's wife had taken a loan secured by mortgaging the property. The Bank invoked section 13(2) of the SARFAESI Act and issued demand notices. The petitioner approached the Debts Recovery Tribunal (DRT) and the Debts Recovery Appellate Tribunal (DRAT) seeking relief. The DRAT directed the petitioner to deposit a sum of Rs. 65,00,000/- in 15 equal installments. The petitioner deposited more than the principal amount within the stipulated time but not in 15 equal installments. The Bank did not inform the petitioner about the remaining amount and interest. The court held that the petitioner fulfilled the conditions mentioned and directed the Bank to furnish the information and basis of calculation of 10% per annum interest on the reducing balance of Rs. 65 lakhs to the petitioner. If the interest is not paid by the petitioner within sixty days, the order shall be treated as recalled/cancelled and it will be open to the bank to auction the mortgaged property in accordance with the law. The impugned judgment dated 27-9-2019 passed in M. A. No. 284/2014 is set aside.
Fact of the Case:
The petitioner sought relief through a writ of mandamus to direct the Respondents to issue a no dues certificate and release the title deed of the mortgaged property. The petitioner's wife had taken a loan secured by mortgaging the property. The Bank invoked section 13(2) of the SARFAESI Act and issued demand notices. The petitioner approached the Debts Recovery Tribunal (DRT) and the Debts Recovery Appellate Tribunal (DRAT) seeking relief. The DRAT directed the petitioner to deposit a sum of Rs. 65,00,000/- in 15 equal installments. The petitioner deposited more than the principal amount within the stipulated time but not in 15 equal installments. The Bank did not inform the petitioner about the remaining amount and interest.
Finding of the Court:
The court found that the petitioner fulfilled the conditions mentioned and directed the Bank to furnish the information and basis of calculation of 10% per annum interest on the reducing balance of Rs. 65 lakhs to the petitioner. If the interest is not paid by the petitioner within sixty days, the order shall be treated as recalled/cancelled and it will be open to the bank to auction the mortgaged property in accordance with the law. The impugned judgment dated 27-9-2019 passed in M. A. No. 284/2014 is set aside.
Issues: The issues revolved around the petitioner's plea for relief through a writ of mandamus, the Bank's invocation of section 13(2) of the SARFAESI Act, the DRAT's direction to deposit a sum of Rs. 65,00,000/- in 15 equal installments, and the petitioner's fulfillment of the conditions mentioned.
Ratio Decidendi: The court held that the petitioner fulfilled the conditions mentioned and directed the Bank to furnish the information and basis of calculation of 10% per annum interest on the reducing balance of Rs. 65 lakhs to the petitioner. If the interest is not paid by the petitioner within sixty days, the order shall be treated as recalled/cancelled and it will be open to the bank to auction the mortgaged property in accordance with the law. The impugned judgment dated 27-9-2019 passed in M. A. No. 284/2014 is set aside.
Final Decision: The court directed the Bank to furnish the information and basis of calculation of 10% per annum interest on the reducing balance of Rs. 65 lakhs to the petitioner. If the interest is not paid by the petitioner within sixty days, the order shall be treated as recalled/cancelled and it will be open to the bank to auction the mortgaged property in accordance with the law. The impugned judgment dated 27-9-2019 passed in M. A. No. 284/2014 is set aside.
ORAL ORDER SUJOY PAUL, J. : – In this petition, the petitioner has prayed for following reliefs : –
(i) To issue a writ in the nature of mandamus directing the Respondents to issue the no dues certificate and release the title deed of the mortgaged property in the interest of justice. (ii) To issue a writ in the nature of certiorari to quash the order dated 27-9-2019 (Annexure P-1) in the interest of justice. (iii) To issue a writ in the nature of mandamus to quash proceedings in OAEX 46/2011 pending before the Recovery officer DRT Jabalpur in this petition. (iv) To issue a writ in the nature of mandamus to quash the letter dated 6-2-2013 (Annexure P-6) in this petition. (v) To issue any other suitable directions/orders along with cost of the petition.
2. This matter has a chequered history. The parties have fought a long drawn battle in the corridors of the Courts. This is also the second visit of the petitioner for almost claiming the same relief from this Court which was claimed in W. P. No. 21167/2019 which was dismissed as withdrawn on 22-11-2021 with liberty to the petitioner to approach the respondent/Bank.
3. In turn, the petitioner approached the respondent/Bank and being aggrieved with the inaction of respondent/Bank to settle the amount again approached this Court.
4. Draped in brevity, the relevant facts are that the petitioner’s wife took a loan for establishing a Hospital. The loan was secured by mortgaging the immovable property belonging to the petitioner. Since borrower did not maintain the financial discipline, the Bank invoked section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI ACT) and issued demand notice dated 23-7-2007 seeking a demand of Rs. 1,31,42,423/- followed by another notice issued under section 13(4) of the Act issued on 30-10-2007 for taking symbolic possession of the property.
5. The notice under section 13(4) of SARFAESI ACT was called in question before Debts Recovery Tribunal (DRT) in S. A. No. 57/2007. During the pendency of said S. A., the respondent/Bank proceeded to fix the date of auction of mortgaged property.
6. On 21-9-2010, respondent/Bank published a fresh Auction Sale notice fixing the auction on 21-9-2010. The property was sold and a sale certificate was also issued. Aggrieved, petitioner filed Miscellaneous Application No. 85/2010 in pending S. A. No. 57/2007 questioning the Auction Sale held on 21-9-2010. The DRT by order dated 22-11-2010 (Annexure P/15) allowed the application and set aside the Auction Sale.
7. The S. A. No. 57/2007 was ultimately dismissed by DRT on 16-8-2010 (Annexure P/16 with rejoinder). The petitioner feeling aggrieved by said order of DRT, filed a statutory appeal before Debts Recovery Appellate Tribunal (DRATs) Allahabad.
8. The said appeal was registered as Case No. R-12/2011 by Appellate Tribunal and was heard on the question of admission on 21-1-2011. While admitting the appeal, the petitioner was directed to deposit Rs. 50 Lakhs with respondent/ Bank in the form of FDR with further observation that if amount is deposited, the Bank shall not take any coercive steps against the petitioner.
9. Shri Amit Khatri, learned counsel for the petitioner submits that in obedience of DRAT’s order dated 21-1-2011, the petitioner deposited Rs. 50,00,000/- with the Bank and further Rs. 8,00,000/- were deposited prior to filing of appeal before the DRAT. Thus, in total amount of Rs. 58,00,000/- was already deposited by the petitioner when matter came up before DRAT on 6-1-2012. The DRAT on 6-1-2012 opined that the case stands settled/compromise for a sum of Rs. 65,00,000/- further to be paid by the appellant in fifteen equal installments. The first installment shall fall due on 15-2-2012 and next installment will fall due on 15th of each month. It was made clear by DRAT that in case
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