- (1.) THE petitioner in this writ application has made the following prayers :- (a) For an order for quashing the possession Notice dated 22-11-2007, issued by the respondent No. 2, under Section 13 (4) of the Securitization and Reconstruction of financial Assets and Enforcement of Security interest Act, 2002, (hereinafter in short 'sarfaesi' Act) communicating a declaration thereby to the petitioner and the public in general that the respondent has taken possession of the petitioner's property, mentioned in the Notice, in exercise of the provisions under Section 13 (4) of the 'sarfaesi' Act read with Rule 8 of the Rules, thereunder. (b) For issuance of an appropriate writ with a declaration that Possession Notice dated 22-11-2007 in relation to the immovable properties mentioned in the impugned notice, is bad and illegal on the ground that the said properties were never mortgaged in favour of the Respondent-Bank and, therefore, the same cannot be treated as a security for enforcement of the outstanding dues of the petitioner against the Respondent-Bank. (c) For an order restraining the Respondent-Bank to deal/sell away the immovable properties mentioned in the impugned Notice dated 22-11-2007 and also for a declaration to the respondents to consider sympathetically the petitioner's proposal for settlement of his dues and to grant him 12 months' notice to repeal the entire outstanding dues to the Respondent-Bank.
(2.) PETITIONER's case in brief is that the petitioner was sanctioned mid-term loan of Rs. 1. 17 lakhs together with cash credit of rs. 7. 50 lakhs by the Respondent-Bank on 18-12-2001. By way of. collateral security, the petitioner deposited the S. T. D. R. of Rs. 1. 40 lakhs and also the Title deeds of jagdamba Marketing Complex standing in the name of his wife, valued at Rs. 34 lakhs on the date of sanction of loan amount. While submitting the Title documents of the movable properly, the petitioner and his wile had executed further documents to confirm that the possession of the immovable property was delivered to the Bank. Almost 2 years later on 27-10-2003, the bank informed the petitioner that the documents pertaining to the Jagdamba Marketing Complex was not a proper document as it was only an agreement to sell the property, A demand was, therefore, made by the respondent-Bank directing the petitioner to rectify the defect in the documents, so that the same may be regularized for the purposes of affirming the property as collateral security. When the purported irregularities could riot be rectified within time, the petitioner submitted Title deeds of another immovable property worth Rs. 11,23,000/-, which also stood in the name of his wife, for the purposes of creating equitable mortgage. Though the monthly instalments towards repayment of the debt used to be regularly paid by the petitioner, but in January, 2007 onwards, he could not repay monthly instalments in respect of the monthly dues in time. Consequently, the Bank issued a notice dated 22-11-2007 under the provisions of Section 13 (2) of the 'sarfaesi' Act, 2002. Though the second property was accepted as a collateral security on which an equitable mortgage was created in respect of the loan advanced, the Bank did not release the Title deeds of the earlier property, namely, the Jagdamba Marketing Complex, although, according to the admission of the bank the Title deeds pertaining to Jagdamba marketing Complex, were not proper documents and, therefore, it could not be accepted for the purposes of creating any equitable mortgage. The petitioner on account of his continuous illness, could not repay the dues as demanded in the Notice in time, upon which a second Notice dated 6-9-2007 under Section 13 (4) of the Act was issued by the Bank to the petitioner. On receipt of the Second Notice, the petitioner deposited a sum of Rs. 1,17,000/- in between 10-9-2007 to 20-9-2007. Besides, accepting the above payments, the bank also adjusted the f. D. R. amount worth Rs. 2,00,000/-as payment against the outstanding dues. Later, on 12-11-2007, the petitioner deposited a further sum of Rs. 1,01200/ -. Despite the deposits of the aforesaid amounts, the Respondent-Bank issued the impugned Notice dated 22-11-2007 under section 13 (4) of the 'sarfaesf Act declaring that it has taken possession of the immovable properties of the petitioner.
(3.) THE petitioner has challenged the impugned Notice on the ground that the notice has been issued in violation of the provisions of the Act as also the guidelines issued by the Reserve Bank of India. Mr. Ashok Kumar Yadav, learned counsel for the petitioner explains that Section 13 (2) of the 'sarfaesi' Act, 2002 declares that before proceeding to initiate action for recovery of the debt under the provisions of section 13 of the Act, the Account of the petitioner had to be declared as N. P. A. (Non-Performing Asset) and then only could the bank issue notice to the petilioner regarding non-fulfilment of his liability within a period of 60 days from the date of Notice. According to the petitioner, no such notice was served upon the petitioner nor was he given any opportunity to show cause as to why his Account should not be classified as NPA. Learned counsel submits further that the amount demanded as the alleged outstanding dues is totally incorrect, arbitrary, and inflated. It is explained further that from the statement of Accounts as furnished by the bank, the amount as on 31-3-2006 was rs. 6,37,833/- as outstanding dues. The bank had admittedly accepted the deposit of a total sum of Rs. 4,47,720/- from the petitioner after that date- Yet. without adjusting the deposited amount, the Bank has shown an outstanding balance of Rs. 7,26,106. 5 as on 22-11-2007. The demand of such an amount, according to the petitioner is arbitrary and no such amount is actually due by the petitioner to the Bank. Without clarifying as to how the amount of rs. 7,26,106. 5/- has remained outstanding in spite of the payment of about a sum of rs. 4,47,000/-, the Bank could not have proceeded to issue the Possession Notice dated 22-11-2007 or take any action under the provisions of Section 13 (2) or 13 (4) of the SARFAESI Act, 2002. Learned counsel further explains that furthermore, in view of the fact that the jagdamba Marketing Complex was not accepted for the purposes of creating any collateral security or for the purposes of creating any equitable mortgage, the Bank cannot proceed either to take possession or to sell away the aforesaid property on the claim that it was part of the mortgaged property.;