SAHARA INDUSTRIES Vs. STATE BANK OF INDIA
HIGH COURT OF UTTARAKHAND
STATE BANK OF INDIA
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SUDHANSHU DHULIA, J. -
(1.) PETITIONERS had borrowed a loan from the respondent -Bank,
namely, State Bank of India, Main Branch, Kashipur, District -Udham
Singh Nagar in the year 2010, for an amount of Rs.65.00 lakhs. This
loan could not be repaid and, consequently, the respondent -Bank
proceeded under the Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (from herein
after referred to as "the SARFAESI Act ").
(2.) A notice under Section 13 (2) of the SARFAESI Act, 2002 was given to the petitioners to which petitioners gave a reply. Meanwhile,
the respondent -Bank also filed an Original Application before the
Debt Recovery Tribunal, Lucknow under Section 19 (1) of the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993
(from herein after referred to as "the DRT Act"). Thereafter, the Bank
proceeded under Section 13 (4) of the SARFAESI Act and took a
symbolic possession of the secured asset, namely, the land which was
mortgaged to the Bank.
Now, actual possession is being taken and further proceeding are to be done by the Bank, as indicated under Section 13 (4) of the
SARFAESI Act. Meanwhile, the respondent -Bank proceeded to file
another application before the DRT under Section 19 (1) of the DRT
(3.) BEING aggrieved, the petitioners filed present writ petition before this Court, wherein the ground taken by the petitioners is that
when an application under Section 19 (1) of the DRT Act has already
been filed by the Bank before the DRT, it cannot further proceed
under Section 13 (4) of the SARFAESI Act. This argument is based
on two grounds, (a) Bank has already given a notice under Section 13
(2) of SARFAESI Act, they cannot proceed under any other provision
of law against the borrower and, (b) they have to take prior permission
of the Debt Recovery Tribunal before proceeding further against the
borrower in terms of proviso to Section 19 (1) of the DRT Act.
Section 19 (1) of DRT Act reads as follows: -
"1[19. Application to the Tribunal. - -(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction - - (a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business or personally works for gain; or (c) the cause of action, wholly or in part, arises" 2 [Provided that the bank or financial institution may, with the permission of the Debts Recovery Tribunal, on an application made by it, withdraw the application, whether made before or after the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004 for the purpose of taking action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002), if no such action had been taken earlier under that Act: Provided further that any application made under the first proviso for seeking permission from the Debts Recovery Tribunal to withdraw the application made under sub -section (1) shall be dealt with by it as expeditiously as possible and disposed of within thirty days from the date of such application: Provided also that in case the Debts Recovery Tribunal refuses to grant permission for withdrawal of the application filed under this sub -section, it shall pass such orders after recording the reasons therefor.]" ;
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