IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JANUARY 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION No.52432 OF 2018 (GM-RES) BETWEEN:
1. Rajeev Bangera, S/o. Shri.U.Rama, Aged about 52 years.
2. Smt.R.Sunitha, W/o. Shri.R.Bangera, Aged about 49 years.
R/o. Sy.No.157/B, No.17, 115/4, KHB Colony, Ombhatthukere Ullal, Mangaluru-575 020.
(By Sri.K.Sreedhar, Advocate) AND:
1. The PNB Housing Bank Limited, No.5, Mathrushree Arcade, 100 Feet Ring Road, 1st Phase, 2nd Stage, BTM Layout, Bengaluru-560 076, Represented by its Authorised officer.
2. The Manager, PNB Housing Finance Limited, … Petitioners No.56, Sai Arcade, 3rd Floor, Marathhalli, Outer Ring Road, Devarabisanahalli, Bengaluru-560 037.
… Respondents (By Sri.N.Aswin Kumar Bafna, Advocate for Sri.K.V.Lokesh, Advocate for C/R1) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India, praying to quash the impugned possession notice dated 08.11.2018 vide Annexure-J as the same is illegal and unsustainable and etc.
This Writ Petition coming on for Preliminary Hearing, this day, the Court made the following:-
ORDER The petition is admitted for hearing. With the consent of both sides, the same is heard finally.
2. In this petition, the petitioners inter-alia seek quashment of the possession notice dated 08.11.2018 issued under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’ for the sake of brevity). The petitioners are also seeking writ in the nature of mandamus directing the respondents to permit the petitioners to reschedule the loan as promised by them and to allow the petitioners to pay the loan in installments.
3. When the matter was taken up today, learned counsel for the petitioners submitted that the petitioners had availed the loan facility from the respondent – Bank. However, on account of circumstances beyond the control of the petitioners, they could not repay the loan amount. Thereupon, a notice under Section 13(2) of the SARFAESI Act was issued to the petitioners on 14.06.2018. The petitioners were required to respond to the aforesaid notice or to repay the amount of loan within a period of 60 days. However, on 04.07.2018, the respondent – Bank sent a communication by which the matter was sought to be referred to the arbitrator.
4. It is the case of the petitioners that they agreed to the aforesaid proposal. However, no action in the matter was taken. The petitioners filed a representation/reply dated 04.08.2018 under Section 13(3) of the SARFAESI Act. However, no action was taken on the aforesaid representation/reply and a notice under Section 13(4) of the SARFAESI Act was issued by which, the possession of the secured asset was sought to be taken from the petitioners. Learned counsel for the petitioners further submits that the aforesaid action is per se arbitrary and is procedurally ultra vires.
5. On the other hand, learned counsel for respondent – Bank has fairly admitted that the representation/reply submitted by the petitioners dated 04.08.2018, has not been decided by the respondent – Bank.
6. I have considered the submissions made by both sides.
Ordinarily this Court would have relegated the petitioners to the remedy provided under Section 17 of the SARFAESI Act. However, in the peculiar facts of the case, it is pertinent to note that Section 13(3) of the SARFAESI Act, incorporates the principles of natural justice. Admittedly, in response to the notice under Section 13(2) of the SARFAESI Act, the petitioners have submitted a representation/reply under Section 13(3) of the SARFAESI Act. It is also not in dispute that no decision on the aforesaid representation/reply has been taken by the respondent – Bank and straight away an order under Section 13(4) of the SARFAESI Act, has been passed to take possession of the secured asset.
7. The impugned action is said to be taken against the petitioners in violation of the principles of natural justice. In the peculiar facts and circumstances of the case, it is directed that the respondent – Bank, before proceeding to take any action against the petitioners in pursuance of the notice under Section 13(4) of the SARFAESI Act, shall consider and decide the representation/reply dated 04.08.2018 submitted by the petitioners by a speaking order, after affording an opportunity of hearing to them, within a period of three weeks from the date of receipt of certified copy of the order passed today.
8. It is needless to state that question of any further action being taken in pursuance of the possession notice dated 08.11.2018 would obviously depend on the outcome of the representation/reply of the petitioners.
Accordingly, the writ petition is disposed of.
Sd/- JUDGE dn/-