LAWS(SC)-2019-8-68

SHAKEENA Vs. BANK OF INDIA

Decided On August 20, 2019
SHAKEENA Appellant
V/S
BANK OF INDIA Respondents

JUDGEMENT

(1.) These appeals take exception to the impugned judgment and order of the Madras High Court, Madurai Bench dated 10th August, 2007 in Writ Appeal (MD) Nos.145 and 146 of 2007 respectively; whereby, the Division Bench of the High Court dismissed the writ petitions filed by the appellants praying for setting aside of notice issued by the respondent bank in exercise of powers under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "2002 Act") dated 14th November, 2005 and the consequent public notice dated 15th November, 2005 for sale of the subject property, the public auction conducted in furtherance thereof on 19th December, 2005, declaration of respondent No.3 as the highest bidder in the said public auction and the sale certificate issued in his favour dated 6th January, 2006.

(2.) Briefly stated, in 2003, Shri P. Shahul Hameed and Smt. Shakeena (appellants/borrowers) were sanctioned a term loan of Rs.10 Lacs each under Star Mortgage Loan by the respondent bank. The accounts became NPA (Non-Performing Assets) from 30th June, 2004. As there was default in re-payment, the respondent bank issued legal notice dated 19th October, 2004 to repay the dues within seven days. On 1st December, 2004, notice was issued under Section 13(2) of the 2002 Act to the appellants, calling upon them to discharge the loan within sixty days. In reply, the appellants by representations dated 10th December, 2004, requested the respondent bank to grant time for bringing the account in order. In view of the default in discharging the loans by the appellants, the respondent bank, exercised its power under Section 13(4) of the 2002 Act. Accordingly, constructive possession of the mortgaged property was taken over by the respondent bank on 8th February, 2005.

(3.) The appellants then filed S.A. Nos.21 and 22 of 2005, by invoking Section 17 of the 2002 Act, before the Debts Recovery Tribunal II, Chennai, challenging the notices, issued by the respondent bank. On 18th March, 2005, DRT-II, Chennai passed an order in S.A. Nos.21 and 22 of 2005 staying all further proceedings on condition that the appellants would pay Rs.1.50 Lac in each appeal. However, the appellants failed to comply with the said order and, therefore, the order being a self-operating order, stood automatically vacated. Later on, S.A. Nos.21 & 22 of 2005 were eventually dismissed for non-prosecution/default on 28th September, 2005, for non-payment of court fee.