WP/34505/2011 of Ch.Umadevi, Vs The Andhra Bank, Collectorate Road Branch, on 29 December 2011

HON'BLE SRI JUSTICE GHULAM MOHAMMEDAND

HON'BLE SRI JUSTICE NOOTY RAMAMOHANA RAO

WRIT PETITIONNO. 34505 OF 2011

Between:

Ch. Umadevi W/o Mallikarjun Dev

………….Petitioner

AND

The Andhra Bank, Collectorate Road Branch and oneanother

………….Respondents

ORDER: (Per Hon'ble Sri Justice Ghulam Mohammed)

This Writ Petition has been filed seeking aWrit of Mandamus declaring the action of the firstrespondent-Bank in issuing notice dated11.10.2011 to the petitioner under Section 13(2) ofthe Securitisation and Reconstruction of FinancialAssets and Enforcement of Security Interest Act,2002, (for short called the “Act” henceforth)demanding the petitioner to repay the outstandingloan amount as illegal and arbitrary.

Brief facts of the case are that the first respondent has granted the SOD-RE facility in sumof Rs. 25,00,000/- (for educational Institution) in theyear 2010 to the second respondent upon anequitable mortgage of her house property and inaddition to her there are other co-obligants, who stood as guarantee for the said loan amount. Thesecond respondent after availing such facility haspaid some instalments thereafter became defaultorand as on 30.9.2011, it has to pay a sum of Rs.24,32,369/-. Hence, the first respondent issued anotice to the petitioner asking her to repay theamount within sixty days otherwise it will takepossession of the properties, which are secured toit. Aggrieved by the same, the preset Writ Petitionis filed.

The main grievance of the petitioner is that the second respondent has sufficient means to paythe loan amount and the Bank instead ofrecovering the loan amount from the secondrespondent, issued notice asking her to pay thesaid loan amount and failing which, it will takesteps for conducting auction of her residentialhouse.

Heard the learned counsel appearing for thepetitioner and also perused the material made available on record.

As the second respondent committed default inpayment of loan amount, the Bank has initiatedproceedings under SRFAESI Act.

Be that as it may, under Section 17 of theSRFAESI Act, any aggrieved person can file an appealbefore the Debts Recovery Tribunal.

Section 17 of the Act reads as under:

“Right to appeal: (1) Any person (including borrower), aggrieved byany of the measures referred to in sub-section (4) of Section 13taken by the secured creditor or his authorised officer under thisChapter, may prefer an appeal to the Debts Recovery Tribunalhaving jurisdiction in the matter within forty-five days from the dateon which such measures had been taken.

(2) Where an appeal is preferred by a borrower, such appeal shallnot be entertained by the Debts Recovery Tribunal unless theborrower has deposited with the Debts Recovery Tribunal seventyfive percent of the amount claimed in the notice referred to in sub-section (2) of Section 13:

Provided that the Debts Recovery Tribunal may, for reasons to berecorded in writing, waive or reduce the amount to be depositedunder this section.

(3) Save as otherwise provided in this Act, the Debts RecoveryTribunal shall, as far s may be, dispose of the appeal in accordancewith the provisions of the Recovery of Debts Due to Banks andFinancial Institutions Act, 1993 (51 of 1993) and rules madethereunder.”

The Supreme Court in SLP (c ) No. 10145 of 2010 dated 26[th] July 2010 at paragraph 27 of thejudgment observed as under:

“27. It is a matter of serious concern that despiterepeated pronouncement of this Court, the High Courtscontinue to ignore the availability of statutory remediesunder the DRT Act and SRFAESI Act and exercisejurisdiction under Article 226 for passing orders whichhave serious adverse impact on the right of banks andother financial institutions to recover their dues. Wehope and trust that in future the High Courts willexercise their discretion in such matters with greatercaution, care and circumspection.”

In view of the facts and circumstances of the