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IN THE HIGH COURT OF JUDICDATURE FOR THE STATE OF TELANGANA : HYDERABAD
M.S.RAMACHANDRA RAO, T.AMARNATH GOUD, JJ.
G.Tuhin Kumar – Appellant
Vs.
State Bank of India rep by its Chairman and Managing Director – Respondent
W.P.No.46380 of 2018, Interlocutory Application Nos.1 to 6 of 2019 AND Interlocutory Application No.1 of 2020
Decided on : 21-04-2020
SARFAESI Act, 2002 - Sections 13 (2), 2(a) and 4 (3) (b) - Security Interest Enforcement Rules, 2002 - Rule 8(5)(d) - Debt Recovery and Monetary Laws - Bank - Loan- Benami transaction - Loan from financial institutions - When petitioner in the reply-affidavit alleged that there is no affixture of notice under Section 13(4) of Act on subject property as mandated by Rule 8(1) of Rules, 2002, Bank did not produced any material to prove such affixture on outer door or at conspicuous place of the property. This vitiates the action taken by the Bank under the Act.
Facts of the case: According to the petitioner he intended to purchase an apartment by taking a loan from financial institutions and since Banks are reluctant to grant loans to Advocates, and since he was an Advocate, he persuaded 5th respondent to apply and obtain a loan of Rs.50 Lakhs from the State Bank of India i.e the Bank to purchase the above property; that the 5th respondent readily agreed to do so; and a loan was granted by Bank to 5th respondent of Rs.50 lakhs -
Finding of the court: Under Rule 8(5), the authorized officer of Bank, before affecting sale of the subject property has to obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price and can then sell it even by private treaty - This can be done even without consent of the borrower - When 5th respondent himself voluntarily represented to the Bank to sell the property indicating that he has no more interest therein, Bank can accept the offer of petitioner and transfer by private treaty, the subject property to the petitioner by invoking Rule 8(5)(d) subject to the petitioner clearing loan in instalments by execution of a fresh mortgage in its favour - Direction issued -
Result: Writ Petition is disposed of
ORDER :
(Per Sri Justice M.S.Ramachandra Rao)
This case illustrates how a family dispute between spouses causes collateral damage on others related to them leading to even financial institutions acting arbitrarily and causes hardship to them.
2. The petitioner herein is a practicing Advocate in this High Court. The 5th respondent was employed in Andhra Pragathi Grameena Bank, Visakhapatnam.
3. Petitioner’s wife Prameela Rani and the wife of the 5th respondent by name Padmaja Rani are sisters. The 5th respondent’s wife is employed as Asst.Manager in Indian Overseas Bank.
4. The 1st respondent is the State Bank of India and the 2nd respondent is it’s branch at Masab tank, Hyderabad. The 3rd and 4th respondent is the Asst.General Manager and Authorized Officer, RACPC of the 1st respondent bank and the 7th respondent is the Chief General Manager of the 1st respondent Bank at it’s Local head Office, in Hyderabad. (They will be collectively referred to as ‘The Bank’.)
5. The petitioner is in occupation of Flat No.511, Uday Balaji residency, H.No.1-1-17/A, Jawahar Nagar, Hyderabad.
6. According to the petitioner he intended to purchase an apartment by taking a loan from financial institutions and since Banks are reluctant to grant loans to Advocates, and since he was an Advocate, he persuaded the 5th respondent to apply and obtain a loan of Rs.50 Lakhs from the State Bank of India i.e the Bank to purchase the above property; that the 5th respondent readily agreed to do so; and a loan was granted on 14.2.2016 by the Bank to 5th respondent of Rs.50 lakhs.
7. This is disputed by the 5th respondent, who claims that he himself intended to purchase the said property after 2014; that petitioner helped him to identify the above property and after satisfying himself about the title of the vendor, 5th respondent negotiated with the builder M/s Udaya Heights Pvt.Ltd (for short ‘the builder’), paid him by cheques dt.16.11.2015 and 20.11.2015, Rs.5,00,000/- and Rs.4,00,000/- respectively; and that thereafter loan was sanctioned to him on 14.2.2016 by the Bank.
8. Though the 5th respondent signed all the loan documents with the Bank, it is not in dispute that the petitioner acted as 5th respondent’s agent and attended the registration work in connection with the sale deed which was executed on 5.3.2016 in favor of 5th respondent by the builder of the flat as proxy of the 5th respondent. According to the petitioner, 5th respondent authorized him to get the registration done.
9. It is undisputed that the loan was released by 2nd respondent by two cheques both dt. 20.3.2016, one for Rs.23,80,000/- and Rs.26,20,000/- in favor of the builder and that the monthly EMI was Rs.43,859/-.
The inter-se disputes between 5th respondent and his wife
10. Disputes the arose between the 5th respondent and his wife since December, 2016.
11. Wife of 5th respondent filed OP.No.1260 of 2017 in Family Court, Hyderabad to dissolve their marriage and also a DVC.No.206/2018. She also filed CC No.607 of 2017 before the PDM Court, Srikakulam under Sec.498-A IPC; and also got registered an FIR against her husband FIR No.257/2017 for allegedly labeling her ‘indecently’ under the Information Technology Act. The 5th respondent was arrested on 24-1-2018. Another FIR 105 of 2019 was also registered against him by his wife saying that he forged her signature and got a top-up loan of Rs.14,92,000/- from SBI, Kohinoor Branch, Visakhapatnam.
12. The 5th respondent applied for voluntary retirement and on 30-9-2019 he was allowed by his employer to voluntarily retire from service.
13. Since December, 2016, a rift occurred between the 5th respondent and the petitioner due to the above events.
The after effect of the disputes between the 5th respondent and his spouse on the petitioner
14. So on 1-8-2018, the 5th respondent wrote to the Bank that he cannot repay the loan amount, that it should not acce
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