AI Structured Summary
Not yet generated for this judgment
Judgment
Dinesh Kumar Singh, J
The present Writ Petition has been filed seeking the following prayers:
(i) issue a writ of certiorari and/or other writ directions or orders to quash Ext.P1 demand notice, Ext.P3 possession notice and Ext.P4, P5 sale notices.,
(ii) declare that the recovery proceeding as evidenced by Exts.P1, P3, P4 and P5 are illegal and without authority for the reason of non compliance of Section 26 D of the SARFAESI Act., and
(iii) issue such other writs directions or orders as are deemed just and necessary in the interest of justice.
The 1st petitioner, a registered partnership firm. Although the 2nd respondent offered to sanction an Inventory Funding Facility of Rs.5Crore to the 1st petitioner, the 2nd respondent sanctioned only Rs.1,25,00,000/-. However, after availing the said facility, the petitioners did not make the payment. Therefore, the bank after classifying the petitioners’ loan account as NPA, proceeded further under the provisions of the SARFAESI Act and Rules made thereunder.
The 2nd petitioner had approached this Court by filing W.P(C.) No.2349/2021. The bank has filed an Original Application before the Debts Recovery Tribunal - II, Ernakulam, (for short, DRT) seeking a decree to recover the outstanding dues from the petitioners. The sale of the secured asset is on 11.10.2024. At this stage, the petitioners have approached this Court by filing the present writ petition impugning the SARFAESI proceedings.
This Court is of the considered view that the writ jurisdiction cannot be invoked against the SARFAESI proceedings undertaken by a financial institution to realize its dues from the borrowers, in case of default.
Thus, the present writ petition is disposed of, with liberty to the petitioners to take recourse to any other proceedings as may be available to the petitioners, under the law. If the petitioners make payment of Rs.50,00,000/-on or before 10.10.2024, and approach the DRT with the appropriate proceedings, the sale of the secured asset shall be deferred till a decision is taken by the DRT on the interim application filed, if any, along with the S.A.
With the aforesaid observation and direction, the present writ petition stands disposed of.