Smt. Anita Mathur vs State Bank of Bikaner and Others

Ajay Rastogi, J.—Both the matters have come up on application filed by Respondent u/Article 226(3) of the Constitution for vacation of interim order passed by this Court. However, with consent of the parties, matter has been finally heard.

The Petitioners, as alleged, are bonafide purchasers of the property mortgaged with Respondent-bank and cash credit facility was extended to Respondents-2 and 3 who are principal borrowers. It has come on record that the property which is being alleged to be purchased by the present Petitioners was mortgaged with the financial institution (Respondent-bank) and only by creating equitable mortgage cash credit facility was extended to Respondents-2 and 3. However, on default being committed in payment of outstanding dues their account were made ''NPA'' and accordingly recovery proceedings under the Act of 2002 were initiated by Respondentfinancial institution. However, when the notice was published for taking possession of the property in question u/s 13(4) of the Act of 2002 the Petitioners approached this Court by filing instant petitions.

Their grievance is that they are bonafide purchasers of the property mortgaged with the Respondent-bank and default if any committed by Respondents-2 and 3 who are principal borrowers action can be taken by the financial institution against them and as far as the fact of mortgage being created over the property in question is concerned, was not made known to the present Petitioners and the principal borrowers have also not made this fact known to the Petitioners, in absence whereof they being the bonafide purchasers, no additional liability could have been fastened upon the Petitioners and notice published by the Respondent for taking possession of the property u/s 13(4) of the Act,2002 in the facts and circumstances of the instant case is wholly without jurisdiction and their action pursuant thereto is arbitrary and illegal.

Counsel for Respondent-bank, on the other hand, submits that when the property in question was mortgaged with the Respondent-bank, it was duty of the Petitioners to verify the fact well before the property mortgaged with the bank being purchased by the principal borrowers and under these circumstances they cannot be held to be bonafide purchasers of the property mortgaged with the financial institution. Counsel further submits that the Petitioners, who allege themselves to be the bonafide purchasers of the property mortgaged with the Respondent-bank, if at all are aggrieved by the action of the Respondent-bank being initiated under the Act of 2002, are certainly at liberty to raise their grievance by filing appeal u/s 17 of the Act of 2002 and in view of efficacious remedy of appeal being available to the Petitioners, this Court may not like to entertain the instant petitions.

I have heard counsel for the parties and also perused the material on record. This fact remain un-controverted from the material on record that the property purchased by the Petitioners was mortgaged with the Respondentbank and pursuant thereto cash credit facility was extended to Respondents-2 and 3 who are principal borrowers and on account of default being committed by them their account initially were made NPA and the Respondentbank after expiry of statutory period of sixty days initiated proceedings under the Act of 2002 for taking possession of the property mortgaged by publication in newspaper which is impugned in the instant petitions.

The creditors are always at liberty to take possession of the property, in case the borrower commits default, obviously after following the procedure provided under the law.

In the instant case, indisputably action has been initiated by the Respondent-bank in terms of procedure provided under the Act of 2002. This Court finds no fault being committed by the Respondent-bank in initiating the procedure against the principal borrowers and so also in taking possession of the mortgaged property as per the procedure provided under the Act of 2002.

The submission made by the counsel for Petitioners that they are bonafide purchasers is without substance for the reason that purchaser of property from borrower without verifying its ownership deed and the property being mortgaged with some financial institution, cannot be held to be a bonafide purchaser and hence in the instant case the Petitioners if at all are aggrieved by the action initiated by the Respondent-bank under the Act of 2002, are certainly at liberty to raise their grievance while availing remedy of appeal u/s 17 of the Act of 2002.

In view of effective remedy of appeal being available to the Petitioners u/s 17 of the Act of 2002, this Court is not inclined to entertain the instant petitions under equitable jurisdiction of this Court u/Article 226 of the Constitution. However what has been observed by this Court (supra) will not adversely affect the either parties if they so choose to avail remedy of appeal under the law.

Counsel for Petitioners lastly submits that at least for a period of four weeks the Respondent-bank may be restrained from taking any coercive action against the Petitioners if he wants to avail the remedy of appeal available under law, if so instructed.

This Court in the facts of the instant case considers it appropriate to restrain the Respondent-bank at least for a period of four weeks from taking any coercive action against the Petitioners.

Consequently, both the writ petitions stand dismissed. No costs.