Sri Bendurthi Manikyam v. State Bank of India, Tuni Branch

Counsel for the respondent: Smt. Ch.Laxmi Chaya for Sri Ambadipudi Satyanarayana, SC for SBI The Court made the following : Order: This Writ Petition is filed for a Mandamus to declare the action of the respondent in putting and placing lock and seal to the petitioner’s house bearing Door No.33/100 situated in an extent of 165 square yards in Plot No.34, Chakka Suryanarayana Nagar in Survey No.70/1 of Payakaraopeta, Visakhapatnam District, on 24-06-2012, without issuing notice under Sections 13 (2) and 13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’), as illegal and arbitrary. The petitioner has borrowed a sum of Rs.4,45,595- 78 ps., on 31-05-2006 from the respondent. It is the pleaded case of the petitioner that without following the provisions of Sections 13 (2) and 13 (4) of the Act, the respondent has highhandedly locked her house on 24-06-2012; that when the petitioner approached the respondent, the latter has demanded Rs.65,000/- towards arrears of installments and that accordingly, she has paid the same.

When the lock was not opened and possession was not redelivered to the petitioner, she has allegedly approached the respondent to know the reason therefor and that the respondent has orally informed her on 17-11-2012 that the house was sold on 24-10-2012. The grievance of the petitioner is that the respondent has not followed the procedure prescribed under Sections 13 (2) and 13 (4) of the Act before selling the property. Heard Mr.P.Satyanarayana, learned Counsel for the petitioner, and Mrs. Ch.Laxmi Chaya, learned Counsel representing Sri Ambadipudi Satyanarayana, learned Standing Counsel for the respondent- State Bank of India. At the hearing, the learned Counsel for the petitioner submitted that his client was put in dark before the property was allegedly sold and that therefore, the purported sale is in violation of the principles of natural justice and the provisions of Sections 13 (2) and 13 (4) of the Act.

Per contra, the learned Standing Counsel for the respondent- Bank placed before the Court the judgment in Authorised Officer, Indian Overseas Bank & another vs. Ashok Saw Mill and submitted that if the petitioner [1] feels aggrieved by sale of the property, she is entitled to approach the Debt Recovery Tribunal (for short ‘the Tribunal’) under Section 17 (1) of the Act by way of an appeal and that the Tribunal can decide the issues that may be raised by the petitioner in the appeal under Sub- Section (3) thereof. Under Section 17 (1) of the Act, any person (including borrower), aggrieved by any of the measures referred to in sub-Section (4) of Section 13 taken by the secured creditor or his authorized officer under Chapter III, may make an application along with the prescribed fees to the Tribunal having jurisdiction in the matter within 45 days from the date on which such measures had been taken.

Under Sub-Section (3) thereof, if the Tribunal, after examining the facts and circumstances of the case and the evidence produced by the parties, comes to the conclusion that any of the measures referred to under Sub-Section (4) of Section 13 of the Act, taken by the secured creditors are not in accordance with provisions of the Act and the Rules made thereunder, it may require restoration of the management of the secured assets/assets to the borrower after declaring that the measures taken by the secured creditors are invalid. In Authorized Officer (cited supra), the Supreme Court, while interpreting Section 17 of the Act, held that the remedy of the aggrieved party to approach the Tribunal exists even to the post Section 13 (4) measures taken by the secured creditor. In view of the above, I do not find any merit in the submission of Mr.P.Satyanarayana, learned Counsel for the petitioner, that since the respondent failed to issue notice to the petitioner, which constitutes violation of principles of natural justice, she is entitled to file this Writ Petition without approaching the Tribunal.

The Tribunal is constituted for the exclusive purpose of deciding all the disputes arising between the creditors and the debtors as envisaged under the Act. The measures referred to in Section 13 include issuance of notice to the borrower. Therefore, if any action is taken by the secured creditor by not following such measure of issuance of notice, the petitioner has a right of filing appeal. He cannot, therefore, bypass the said statutory remedy in the guise of violation of principles of natural justice. When the Act has created a forum, specifically for the purpose of deciding the disputes between the creditors and the debtors, the aggrieved party cannot be permitted to bypass such effective remedy in the guise of violation of principles of natural justice. The learned Counsel for the petitioner contended that as no order in writing was passed by the respondent, the Tribunal may not entertain the appeal.

This statement is totally unsound. Section 17 (1) of the Act gives a right to the aggrieved party to file an appeal against any of the measures referred to in Sub-Section (4) of Section 13 of the Act. If the measure includes taking possession and sale of the property, the aggrieved party can file an appeal without there being an order in writing. For the above-mentioned reasons, I am not inclined to entertain this Writ Petition. The Writ Petition is, accordingly, dismissed with liberty to the petitioner to approach the Tribunal by way of appeal under Section 17 (1) of the Act. As a sequel, WPMP.No.46205 of 2012, filed by the petitioner for interim relief, is disposed of as infructuous. __________________________ (C.V.Nagarjuna Reddy, J) 26th November, 2012 [1] (2009) 8 SCC 366