BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 17/06/2006 CORAM : THE HONOURABLE MR.JUSTICE K.MOHAN RAM WRIT PETITION (MD) NO.964 of 2006 and WPMP.NOS.1040 & 2234 OF 2006 & WVMP.NO.80 OF 2006 Geo Tech Ground Water and Irrigation Consultants through its partner K.R.Asokan .. Petitioner Vs The Authorised Officer, Indian Bank Veeraraghapuram Branch, Tirunelveli District. .. Respondent PETITION under Article 226 of The Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus to call for the records relating to the impugned notice in 'Dina Malar' daily dated 29.6.2005, quash the same as illegal and consequentially direct the respondent to permit the petitioner to settle the entire loan amount in accordance with the circular dated 3.9.2005 issued by the Reserve Bank of India. !For Petitioner ... Mr.M.Ajmal Khan ^For Respondent ... Mr.S.Suresh for M/s.Aiyer & Dolia :ORDER
With consent of learned counsel on either side, the writ petition itself
is taken up for final disposal.
2. Petitioner borrowed a sum of Rs.8 lakhs from the respondent bank in
1993. Since the petitioner committed default in repayment, the respondent filed
a suit in O.S.No.301 of 1998 on the file of the Principal Subordinate Court,
Tirunelveli for recovery of a sum of Rs.7,88,556.72 being the principal and
further interest. In the said suit, a preliminary decree came to be passed on
21.12.2001. To recover the amount due as per the decree, the respondent
published a notice in ‘Dina Malar’ dated 29.6.2005 purported to be a notice
under Section 13(2) of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the
Act) calling upon the petitioner to settle the amount within 60 days. By the
said notice, the petitioner was put on notice that if the petitioner fails to
settle the dues, action will be taken under Section 13(4) of the Act.
Thereafter, proceedings have been taken under Section 13(4) of the Act as the
petitioner failed to settle the loan amount. The impugned proceedings issued
under Section 13(4) of the Act is under challenge in the above writ petition.
3. The impugned proceedings is challenged on the following grounds:
i.No notice is given in writing to the petitioner as required under Section
13(2) of the Act; and
ii.Since the respondent filed a suit in O.S.NO.301 of 1998 on the file of the
Principal Subordinate Court, Tirunelveli and obtained a decree, the respondent
is not entitled to proceed further under Section 13(2) of the Act.
4. The writ petition was admitted on 1.2.2006. At the time of admission, a
conditional stay was granted. The respondent bank filed a petition to vacate the
stay granted on 1.2.2006 inter alia contending that the petitioner has got an
appeal remedy before the Debts Recovery Tribunal under Section 17 of the Act and
the writ petition filed without exhausting the alternate remedy of appeal is not
maintainable. It is further contended that subsequent to the notice issued by
the respondent, the auction sale notice was published in the newspapers and the
auction was also conducted and one Mr.Kavin Vendan was the successful bidder for
a sum of Rs.16.10 lakhs. The sale was confirmed in his favour and he also paid
the entire bid amount. The sale certificate was issued in his favour on
28.1.2006. The writ petition has been filed belatedly after fully knowing the
entire facts. The allegation that no notice was issued under Section 13(2) of
the Act has been denied.
5. It is further stated in the affidavit filed in support of the vacate
stay petition that the notice under Section 13(2) of the Act was issued on
15.3.2003 itself and thereafter, possession notice under Section 13(4) of the
Act was issued on 29.6.2005 and the same was also published in the tamil daily
‘Dina Malar’ dated 29.6.2005. The receipt of demand notice dated 15.3.2003 and
the possession notice dated 29.6.2005 was acknowledged by the petitioner in
their letter received by the respondent on 23.8.2005. It is also stated that
suppressing all the above said facts, the petitioner has filed the above writ
petition with false averments and obtaining of a decree from the civil Court by
the respondent is not a bar for invoking the provisions of the Act for bringing
the property for sale.
6. Heard both sides.
7. Learned counsel for the petitioner has put forth the following
submissions :
“i. The petitioner was not issued with the notice under Section
13(2) of the Act;
ii.The respondent cannot invoke the provisions of the Act, since the bank has
already obtained a decree against the petitioner; and
iii. The respondent cannot invoke the provisions of the Act in respect of
agricultural lands belonging to the petitioner, as the respondent is aware of
the provisions contained in Section 31(i) of the Act exempting the auctioning of
the agricultural lands.
8. The first contention of the petitioner has to be rejected in the light
of the admission contained in the letter written by the petitioner to the
respondent, which is filed in page NO.1 of the typed set filed by the respondent
wherein the petitioner referred to the demand notice dated 15.3.2003 and the
possession notice dated 29.6.2005. Having received the demand notice and the
possession notice, the petitioner has made a false statement in the affidavit.
Hence, the said contention is liable to be rejected.
9. Regarding the second contention of the petitioner, learned counsel for
the respondent submits that the term ‘debt’ is defined under Section 2(ha) of
the Act, which reads as follows :
“Debt shall have the meaning assigned to it in clause (g) of Section 2 of
the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of
1993).”
Section 2 (g) of the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 defines the term ‘debt’, which is as follows :
“Debt means any liability (inclusive of interest) which is claimed as due
from any person by a bank or a financial institution or by a consortium of banks
or financial institutions during the course of any business activity undertaken
by the bank or the financial institution or the consortium under any law for the
time being in force, in cash or otherwise, whether secured or unsecured, or
assigned, or whether payable under a decree or order of any civil Court or any
arbitration award or otherwise or under a mortgage and subsisting on, and
legally recoverable on, the date of the application.”
10. In the light of the definitions of the term ‘debt’ as contained in the
above said two Acts, it is crystal clear that ‘debt’ includes any liability
(inclusive of interest) which is claimed as due and payable under a decree or
order of any civil Court and subsisting on, and legally recoverable on, the date
of application. It is pertinent to point out here that the petitioner has not
disputed the legality or validity of the civil Court’s decree or the
petitioner’s liability to pay the decreed amount and hence, the respondent bank
is entitled to invoke the provisions of the Act and therefore, the second
contention of the petitioner is also liable to be rejected.
11. Regarding the third contention of the petitioner viz. the respondent
bank is not entitled to proceed against the agricultural lands of the petitioner
in view of the provisions contained in Section 31(i) of the Act, learned counsel
for the respondent submits that since the other immovable properties belonged to
the petitioner, as stated above, have been sold and a sum of Rs.16.10 lakhs has
been realised, the respondent bank is not going to proceed against the
agricultural lands belonging to the petitioner.
12. In the light of the above submission made by the learned counsel for
the respondent, this Court is of the view that the third contention of the
petitioner need not be gone into.
13. No other submission has been made by the learned counsel for the
petitioner. Therefore, for the foregoing reasons, the writ petition fails and is
dismissed. No costs. Consequently, the above WPMPS and WVMP are also dismissed.
14. Learned counsel for the petitioner submits that pursuant to the order
of this Court dated 1.2.2006, the petitioner deposited a sum of Rs.6,58,000/-
and in view of the dismissal of the writ petition, the petitioner is entitled to
get back the said amount.
15. Learned counsel for the respondent undertakes that the said amount
will be returned to the petitioner within one week from the date of receipt of a
copy of this order.
16. Therefore, it is just and proper that the respondent should be
directed to refund the said sum to the petitioner. Accordingly, the respondent
is directed to refund the said sum of Rs.6,58,000/- (Rupees six lakhs and fifty
eight thousand only) within a week from the date of receipt of a copy of this
order by way of a demand draft.
To
The Authorised Officer, Indian Bank, Veeraraghapuram Branch,
Tirunelveli District.