WP/41272/2014 of M/s. Beebi Fathima Modern Rice Industry Vs State Bank of India, on 31 December 2014

THE HON'BLE SRI JUSTICE K.C.BHANUANDTHE HON’BLE MRS JUSTICE ANIS

WRIT PETITION No.41272 OF 2014

ORDER:- (per Hon’ble Sri Justice K.C.Bhanu)

This writ petition is filed seeking to issue a Writ of Mandamusdeclaring the action of the respondent Bank in issuing possessionnotice, dated 26.11.2014, under Section 13(4) of the Securitization andReconstruction of Financial Assets and Enforcement of SecurityInterest Act, 2002 (for short, “the SARFAESI Act”) by not consideringthe petitioner’s request for payment of 1/4[th] of the total amount of thepossession notice as illegal and arbitrary, and consequently, to setaside the said possession notice.

2. Petitioner obtained cash credit of Rs.22,00,000/- from therespondent Bank for the purpose of running the rice industry. It paidsome instalments and later, committed default in repayment of theentire loan amount. The loan was declared as Non-performing Asset (N.P.A.). Initially, a notice under Section 13(2) of theSARFAESI Act was issued by the respondent Bank and later,possession notice under Section 13(4) of the SARFAESI Act wasissued. Though the petitioner approached the officials of therespondent Bank and requested not to take the possession of theproperty and further, to receive 1/4[th] amount as per the possessionnotice and release the seized property, it is of no use and therespondent Bank highhandedly seized the petitioner rice industry on26.11.2014.

3. Learned counsel for the petitioner stated that the petitioner isready to pay the entire amount due to the respondent Bank if sixweeks’ time is granted to it.

4. On the other hand, learned Standing Counsel appearing for therespondent Bank opposed the same on the ground that earlier, thepetitioner committed default in payment of the instalments and prays todismiss the writ petition.

5. The respondent Bank is interested only to recover the entireamount due. As the petitioner came forward to discharge the entireoutstanding amount to the bank, reasonable time can be granted toenable the petitioner to pay the entire amount due to the Bank. Therefore, we direct the petitioner to pay 50% of the outstanding loanamount to the Bank within a period of six (6) weeks from today and theremaining 50% of the loan amount within a period of six (6) weeksthereafter. Till then, the proceedings under the SARFAESI Act shallbe kept under abeyance. If anyone of the above conditions is notfulfilled by the petitioner, the respondent Bank is at liberty to proceedfurther for realisation of the amount due to the Bank in accordance withthe provisions under the SARFAESI Act. On payment of the firstinstalment as directed above, the respondent Bank shall give thepossession of the secured asset to the petitioner. If the petitioner failsto fulfil the second condition, the possession is deemed to have beentaken by the respondent Bank without initiating any proceedings underthe SARFAESI Act. Registry is directed not to entertain anyapplication seeking “Extension of Time” or “For being mentioned” inthis regard.

6. With the above direction, the Writ Petition is disposed of. Thereshall be no order as to costs. Miscellaneous Petitions, if any, pendingin this Writ Petition shall stand closed.

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JUSTICE K.C.BHANU

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JUSTICE ANIS

AMD

THE HON'BLE SRI JUSTICE K.C.BHANUAND

THE HON’BLE MRS JUSTICE ANIS

WRIT PETITION No.41272 OF 2014

DATE: 31.12.2014

AMD