- (1.) THE petitioners were granted a loan of Rs. 5 lakhs by the respondent Bank. According to the petitioners, due to unforeseen circumstances and reasons beyond their control, they could not repay the amount due in time. According to them, prior to default they had regularly deposited the amount with the Bank. Now the Bank is proceeding against the petitioners under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act") for the realisation of loan amount etc.
(2.) WE have heard learned counsel for the petitioner and Sri Tarum Verma, learned counsel for the respondent -Bank and have perused the averments made in the writ petition. Learned counsel appearing for the petitioners states that the petitioners are prepared to repay the entire outstanding dues along with interest and expenses on pro -rata basis in instalments. The learned counsel appearing for the respondent -Bank submitted that although the petition is not maintainable since sufficient opportunity has already been given to the borrower for clearing up the outstanding dues but the Bank has no objection if some indulgence is given by this Court regarding payment of dues in instalments as the bank is interested in realisation of its dues. We are aware that Hon'ble the Apex Court in Civil Appeal No. Nil of 2010 arising out of SLP (C) No. 10145 of 2010 United Bank of India Vs. Satyawati Tondon and others, decided on 26.07.2010 has held that the High Courts should restrain themselves from staying the recovery proceedings started under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, by exercising their powers under Article 226 of the Constitution. If the High Courts stay the recovery proceedings under the aforesaid Act then the very purpose of enacting the said Act will be frustrated. It has further been held that Section 13 of the SARFAESI Act contains detailed mechanism for enforcement of security interest, in which not only the right to file objections against the notice under Section 13 (2) has been provided but at the same time an effective remedy has further been provided under Section 17of the said Act.
(3.) WE have given our thoughtful consideration to the said judgment of the Apex Court and various submissions made by the learned counsel for the parties. The object of the Act is to provide speedy recovery of the loans advanced by the financial institutions and the Banks by selling of the security which has been offered. This provision even though has been enacted for the benefit of the Bank and financial institutions but appears to be a time consuming process and further in the auction the property is sold at a throw away price and after the amount is realized from such an auction, it may not be sufficient to clear the entire outstanding dues and in that event the Bank/Financial Institution would again have to take recourse to filing a claim petition before the Debt Recovery Tribunal or a regular suit in the Civil Court, as the case may be, which will again be a time consuming process. In the case at hand we are not staying the recovery proceeding or deciding the dispute but giving an opportunity to the defaulter/guarantor to pay the entire outstanding dues on the basis of consent given by the petitioner and the Bank.;