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EASWARAN S.
Jasmin K. – Appellant
Versus
State Bank of India – Respondent
What is the question whether a writ petition under Article 226 is maintainable against measures under the Securitisation Act? What is the legal standard for exceptional circumstances to entertain a writ petition against Securitisation Act measures? What are the limits on continuing with Securitisation Act measures after a civil suit is dismissed?
Key Points: - The Court held that maintainability of a writ petition under Article 226 against measures under the Securitisation Act requires exceptional circumstances. (!) - Exceptional circumstances are carved out per four exceptions discussed in Chabbil Das (supra) and subsequently applied to decide maintenance in this case. (!) (!) - The Bank cannot proceed with measures under Section 13(2) of the Securitisation Act where a civil suit for recovery has been dismissed, given the definition and interpretation of "debt" under the statute. (!) (!) (!) - The definition of "debt" under Section 2(ha) read with Section 2(g) of the RD&B Act affects whether there is a legally recoverable debt after dismissal of the civil suit. (!) (!) (!) - The Supreme Court precedents (e.g., Mathew K.C., Naveen Mathew Philip, Thansingh Nathmal, Titaghur Paper Mills) are invoked to limit the availability of writs when an effective statutory remedy exists. (!) - The Court concluded that the petition should be allowed, restraining the Bank from proceeding with Securitisation Act measures in light of the suit’s dismissal, while reserving liberty to proceed if the judgment is reversed on appeal. (!) (!) - The writ petition was filed 3.4.2018; the Bank had undertaken not to take possession during the writ petition, but later actions led to the challenge. (!) - The case discusses parallel proceedings: Securitisation measures vs. civil suit, and examines whether a creditor can concurrently pursue Section 13(2) measures after dismissal of the civil suit. (!) (!) - The appellate remedy is noted as a potential path if the civil court judgment is reversed, but not a basis to continue with measures in the interim. (!) - The judgment emphasizes that once a civil court finds no debt due, continuing with Securitisation Act measures is not permissible. (!)
A riveting question has emerged in this writ petition. Whether the Secured Creditor is entitled to continue with the measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 once a civil suit filed by it for recovery is dismissed by the court?
2. The facts in the writ petition disclose that petitioner availed a car loan for an amount of Rs.9,00,000/-. The petitioner executed necessary documents towards security. As per Ext.P6, the terms and conditions of sanction of the loan was accepted by the petitioner. Thereafter, by Ext.P7 an agreement of hypothecation was also executed on 14.7.2010. The petitioner claims that she has paid the entire amount due under the loan account. But, Ext.P9 notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“Securitisation Act”, for short) was issued for an amount of Rs.1,73,138/-. The petitioner raised her objection and while so, the respondent-Bank again issued a fresh notice on 11.1.2008 under Section 13(2) of the Securitisation Act. The petitioner's objection that she is not liable to pay any amount under
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