IN THE HIGH COURT FOR THE STATE OF TELANGANA, HYDERABAD
UJJAL BHUYAN, CHILLAKUR SUMALATHA, JJ.
Sanjay Kumar Agarwal - Petitioner
Vs.
Punjab National Bank Bank Street, Koti, Hyderabad. Represented by its Branch Manager And another - Respondents
W.P.No.28105 of 2019
Decided On : 15-12-2021
Constitution of India, 1950 - Article 226 - Recovery of Debts due to Banks and Financial Institutions Act, 1993 - Section 19, 30 - SARFAESI Act, 2002 - Section 13 (4), 14 - Security Interest (Enforcement) Rules, 2002 - Rule 8 (6) - Income Tax Act, 1961 – Rule 4, Rule 61 of II Schedule - Any person aggrieved by an order of Recovery Officer, may file an appeal before jurisdictional Debts Recovery Tribunal within 30 days - Modes of recovery which includes by way of attachment and sale of property - Petitioner is that his father availed a housing loan of Rs.18,00,000-00 from respondent No.1-Punjab National Bank - For availing said loan, property, was mortgaged in favour of respondent - Petitioner also stood as guarantor for said loan.
Findings of the Court :
Petitioner has made out a case of violation of principles of natural justice and thereby invoking writ jurisdiction of Court - Court hold that respondent was not justified in rejecting application filed by petitioner under Rule 61 of Schedule-II in manner in which it was done - we set aside impugned order and remand matter back to respondent for a fresh decision in matter in accordance with law after affording an opportunity of hearing to petitioner - Let decision on remand be taken within a period of 60 days from date of receipt of a copy of this order.
Result - Writ Petition stand disposed of.
ORDER :
(Per Hon’ble Sri Justice Ujjal Bhuyan) Heard learned counsel for the parties.
2. By filing this writ petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 24.11.2019 passed by the Recovery Officer-I, Debts Recovery Tribunal-I, Hyderabad, i.e. respondent No.2.
3. By the aforesaid order dated 24.11.2019, respondent No.2 dismissed the petition filed by the petitioner under Rule 61 of the II Schedule to the Income Tax Act, 1961, seeking stay of all proceedings pursuant to auction of the schedule property conducted on 05.09.2019 including confirmation of sale and sale certificate.
4. Pleaded case of the petitioner is that his father Bal Kishan Agarwal availed a housing loan of Rs.18,00,000-00 from respondent No.1-Punjab National Bank in the year 2011. For availing the said loan, the property bearing House No.1-2-593/17, Domalguda, Hyderabad, was mortgaged in favour of respondent No.1 (‘mortgaged property’ hereinafter). Petitioner also stood as guarantor for the said loan.
5. For various reasons there was default in repayment of the loan amount. As a result, respondent No.1 declared the loan account as Non-Performing Asset (NPA).
6. Thereafter, respondent No.1-Punjab National Bank instituted proceedings under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, which has since been rechristened as Recovery of Debts and Bankruptcy Act, 1993 (briefly referred to hereinafter as ‘the 1993 Act’) before the Debts Recovery Tribunal-I at Hyderabad (briefly referred to hereinafter as ‘the Tribunal’) for recovery of a sum of Rs.18,02,516-00 together with interest and costs. The said application was registered as O.A.No.584 of 2012. While the father of the petitioner was arrayed as defendant No.1, petitioner was arrayed as defendant No.2 in the said O.A.No.584 of 2012.
7. It is stated that during the pendency of O.A.No.584 of 2012, respondent No.1 also initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly referred to hereinafter as the ‘SARFAESI Act’). In this connection, respondent No.1 took over possession of the mortgaged property on 03.10.2015 by forcibly evicting the petitioner and his family members. Since 03.10.2015 respondent No.1 is in possession of the said property.
8. Authorised Officer of respondent No.1 issued notice dated 09.10.2015 to the petitioner under Section 13 (4) of the SARFAESI Act r/w Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002 (briefly, the ‘SARFAESI Rules’ hereinafter). By the said notice, petitioner was called upon to pay the “outstanding dues amounting to Rs.30,89,74,721-00” within 30 days, failing which, it was stated that the secured assets would be sold. The above property at Domalguda, Hyderabad i.e., the mortgaged property was one of the properties mentioned in the said notice. Interestingly, this notice was addressed to the petitioner at his present residential address C-I, Mayurkushal Complex, Abids, Hyderabad.
9. By order dated 07.06.2017, Tribunal allowed O.A.No.584 of 2012. Aforesaid order was passed ex-parte. It was declared that defendant Nos.1 and 2 (father and petitioner) were jointly and severally liable to pay to respondent No.1 a sum of Rs.18,02,516-00 with future interest @ 8.5% p.a. from the date of filing of the O.A till the date of realization. It was further ordered that claim of the applicant i.e. respondent No.1 is secured by mortgage of immovable property as per the Schedule and that respondent No.1 would be entitled to proceed against the mortgaged property towards recovery of its debt.
10. When the petitioner came to know about the aforesaid ex-parte order dated 07.06.2017, he filed an Interlocutory Application for setting aside the ex-parte order. Since there was delay of 783 days, petitioner also filed an application for condoning the said delay.
11. It may be mentioned that in the meanwhile Recovery certific
Point of Law – The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution This power can be exercise....
Ownership of immovable property requires a registered sale deed; an unregistered agreement to sell does not confer any title or interest.
Procedural compliance in auction sales is mandatory, and non-compliance renders such sales void.
While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate....
The court upheld the dismissal of a writ petition due to the availability of an alternative remedy under the Recovery of Debts and Bankruptcy Act, emphasizing the need for statutory compliance in auc....
Though existence of an alternative remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution, but a writ petition can be entertained in exceptional....
It is mandatory for the Secured Creditor/Bank to effect personal service of the sale notice, apart from publication as provided under Rule 8 & 9 of the Security Interest (Enforcement) Rules, 2002.
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