Baljit Kaur vs State Bank of Patiala and Another

Surya Kant, J.—The Petitioner seeks quashing of proceedings initiated by the Respondent-Bank u/s 13(2) of the Securitization and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002 (SRFAESI). these proceedings have been initiated as the borrower namely Harnam Singh, has failed to discharge the loan liability. The Petitioner is a guarantor of said Harnam Singh. It appears that there are two shops, one exclusively owned by the borrower-Harnam Singh and the other jointly owned by the Petitioner and Harnam Singh, which are stated to be mortgaged with the Respondent-Bank.

On 12.5.2010, the Petitioner gave an undertaking to bring a demand draft of Rs. 1 lac in favour of the Respondent-Bank, the Petitioner, however, has not honoured the said undertaking. It further appears that Bank is to recover about Rs. 5,22,000/- from the borrower-Harnam Singh. In these circumstances, the present writ petition is disposed of with a direction to the Respondent-Bank that if there are two shops mortgaged with it and one of them is exclusively owned by the borrower-Harnam Singh, the Respondent-Bank shall firstly dispose of that property in accordance with law/rules and if the loan is not full liquidated, in that event only that the shop which is jointly owned by the Petitioner and the borrower-Harnam Singh, shall be put to auction. However, if there is only one shop which is mortgaged with the Respondent-Bank, it may proceed against the same in accordance with law.