Writ Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Mandamus, forbearing the first respondent Bank from proceeding to sell or transfer the properties of the petitioner covered in the notice dated 9.1.2007 issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to the second respondent or any other third parties by private negotiations, without following due process of law and consequently direct the first respondent to receive the payments from the petitioner towards the outstanding dues and close loan account of M/s.Chitrahar Traders.
This Writ Petition has been preferred by the petitioner for issuance of a Writ of Mandamus, forbearing the first respondent Bank from proceeding to sell or transfer the properties of the petitioner covered in the notice dated 9.1.2007 issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the SARFAESI Act').
2. The grievance of the petitioner is that though the notice was issued under
Section 13(2) of the SARFAESI Act, without taking any action under Section 13(4), the Bank is taking steps to transfer the properties to second respondent or any other third parties.
3. It appears that the petitioner had taken loan from two Banks, namely UCO Bank and Karur Vysya Bank Ltd., keeping the common asset as secured asset to both the Banks. Karur Vysya Bank Ltd. had already taken action under
Section 13(4) of the SARFAESI Act for possession, vide notice dated 8.5.2007. Learned counsel for the petitioner submits that the petitioner has already settled the matter with Karur Vysya Bank Ltd. by way of one time settlement and relied upon a letter dated 23.12.2008 issued by Karur Vysya Bank Ltd. He further stated that for the said reason, Karur Vysya Bank Ltd. has not been impleaded as a party-respondent, but now action has been taken by UCO Bank to transfer the secured asset without action under
Section 13(4).4. It appears that the possession notice was issued by Karur Vysya Bank on behalf of both the Banks, namely UCO Bank and Karur Vysya Bank Ltd. Such steps having been taken under
Section 13(4) of the SARFAESI Act for possession, instead of moving before this Court, the petitioner should have moved under
Section 17 of the SARFAESI Act.
5. So far as the sale of the secured asset is concerned, there is nothing on record to suggest that any sale notice has been issued by UCO Bank or by the other Bank. On the other hand, from the letter dated 27.12.2008 issued by UCO Bank, it appears that on the representation of the petitioner for compromising the matter, he has been informed that the Bank is not agreeable to any compromise. Therein, it has been referred that the petitioner has obtained a stay order and interim order from this Court. Learned counsel for the petitioner submits that, that Writ Petition was taken, as Karur Vysya Bank Ltd. has taken steps under
Section 13(4), but after payment of money, the Writ Petition can be treated to be infructuous, which is still pending. It is further informed that the petitioner has agreed to settle the matter with UCO Bank by paying all the dues.
6. In the facts and circumstances, instead of issuance of any notice to the UCO Bank, we allow the petitioner to approach the UCO Bank and may deposit the total amount as due. If the petitioner deposits the total amount as due in terms of
Section 13(8) of the SARFAESI Act, i.e. 50% by 13.1.2009 and 50% by 31.1.2009, the Bank may accept the amount and pass orders in terms of
Section 13(8).7. In view of the provision of law (
Section 13(8) of the SARFAESI Act), which is to be acted upon by the parties including the borrower and the Bank, we have not heard respondents 1 and 2 at this stage.
8. The Writ Petition stands disposed of with the aforesaid observations. No costs. The Miscellaneous Petition is closed.
(S.J.M., ACJ) (V.D.P.J) 9.1.2009 Index : Yes. Internet: Yes. cs Office to note: IT on 12.1.2009 (Monday) To Union of India, Represented by its Secretary to Government, Finance Department, Ministry of Finance, North Block, New Delhi. The Hon'ble The Acting Chief Justice and V.Dhanapalan,J cs W.P.No.398 of 2009 9.1.2009