- (1.) HEARD learned counsel for the petitioner. Sri Vipin Sinha appears for respondent No.2 Bank.
(2.) THE matter has been taken up on a mention made by Ms. Swati Agrawal that the mortgaged property is going to be sold today by respondent No.2 Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Though the petitioner has taken housing loan of Rs.3,30,000/- in the year 2002, to be paid in equal monthly instalment of Rs.3,752/- for a period of 15 years, the petitioner could be paid only Rs.30,000/-on account of medical expenditure on petitioner No.2, who is stated to be suffering from mouth cancer. It is submitted that petitioners' objections to the notice under Section 13 (2) of the Act was not considered. They did not receive any reply/intimation from respondent Bank on the objections to the notice under Section 13 (2) of the Act, and further that the auction notice was published in only newspaper namely Times of India (English), whereas the notice should have been published in two newspapers including one in vernacular language. The auction notice was thus issued in violation of Rule 9 (1) and 6 (2) of the Security Interest (Enforcement) Rules, 2002. Without going into the merits of the case whether the petitioners' objection was considered and whether the auction notice was published in only one newspaper, we find that the petitioners have an alternative under Section 17 (1) of the Act before the Debt Recovery Tribunal. In Mardia Chemicals Ltd. & Ors. v. Union of India & Ors. [(2004) 4 SCC 311], the Supreme Court upheld the constitutional validity of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as well as Security Interest (Enforcement) Rules, 2002 (SARFAESI Act), except the deposit of 75% as pre-condition of filing the appeal in Debts Recovery Tribunal under Section 17 of the Act. It was held that the proceedings under Section 17 are not an appellate proceedings but rather an initial action, which is brought before a forum prescribed under the Act and is like a suit under the CPC in the Court of first instance.
(3.) IN Transcore v. Union of INdia & Anr. [(2008) 1 SCC 125] following Mardia Chemical's case the Supreme Court held that it was not necessary to withdraw the DRT application before proceeding under the SARFAESI Act (NPA Act). The object behind both Section 13 of the SARFAESI Act, and Section 17 read with Section 19 of the DRT Act is the same, namely for the recovery of debts. There is no inherent or implied inconsistency between the remedies provided under the two Acts. The Mardia Chemical's case and Transcore's case were followed by the United Bank of India v. Satwati Tandon & Ors. [(2010) 8 SCC 110] in which the Supreme Court reminded the High Court not to interfere with the proceedings under the SARFAESI Act, in view of alternative remedy provided under Section 17 (1) of the Act, in which expression 'any person' includes even guarantor or any other person, who may be affected by the action taken under Section 13 (4) or Section 14 of the Act.;