Court No. - 21
Case :- WRIT - C No. - 10603 of 2018 Petitioner :- Brij Pal Singh Respondent :- State Of U.P. And 4 Others Counsel for Petitioner :- Pankaj Kumar Tyagi Counsel for Respondent :- C.S.C.,Anadi Krishna Narayana
Hon'ble Krishna Murari,J. Hon'ble Ajay Bhanot,J.
Heard Sri Pankaj Kumar Tyagi, learned counsel for the petitioner and Sri Sandeep Singh, who has accepted notice on behalf of respondent-Bank.
Petitioner, who is a guarantor to the facility of loan availed by respondent no. 5 from respondent no. 3-Bank has approached this Court challenging the order passed by the Collector Bulandshahr, under Section 14 of the The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 on an application made by the respondent-Bank.
Learned counsel for the petitioner contends that it was incumbent upon the Bank to have proceeded against the principal borrower before auctioning the property of the guarantor. Reliance has been placed on Division Bench judgement of Hon'ble Apex Court in the case of Pawan Kumar Jain Vs. The Pradeshiya Industrial and Investment Corporation of U.P. Ltd and Ors.; [(2004) 3 UPLBEC 2366].
We are afraid that not only the argument advanced by learned counsel for the petitioner is totally misconceived but the reliance placed upon the case of Pawan Kumar Jain (Supra) is also misconceived.
The said judgement is clearly distinguishable on the facts and has no application in the present case. Hon'ble Supreme Court in the said case has held that since the Corporation, which has granted loan to the Principal borrower was defined as "Financial Institution within the meaning of the term as defined in Section 2(h) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the "Debt Recovery Act"). He submitted that such an Institution can only proceed in the manner laid down in the Debt Recovery Act."
However, in the said case since the action against the guarantor was initiated prior to the notification issued by the Central Government bringing the Corporation within the purview of the Debt Recovery Act, the proceedings were not under Debt Recovery Act. The recovery body is under obligation to proceed against the principal borrower before taking action or proceeding against the guarantor.
The law laid down in the said case, which was based on completely different facts is not stand attracted in the facts of the present case where admittedly the proceeding against the property, which was hypotheticated and secured to the loan. Thus, we find no illegality in the same, the writ petition is devoid of merits and accordingly stands dismissed.
Order Date :- 23.3.2018 S.K.