HIGH COURT OF
ANDHRA PRADESH
Sri Yarnala Leela
Krishna Prasad
v.
Central Bank of
India
P.S. NARAYANA,
JUSTICE
WRIT PETITION NO.
: 13387 OF 2006
September 10, 2007
Section 13 of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 – Enforcement of security
interest – Petitioner no. 1 obtained a loan from respondent bank – Petitioners
2 to 6 stood as guarantor for said loan by mortgaging their respective
properties in favour of respondent – On failure of petitioner No. 1 to repay
loan amount, respondent issued notice and thereafter took possession of
security properties – Petitioners had filed instant writ petition stating that
since notice of possession was issued under Securitization and Reconstruction
of Financial Assets and Enforcement of security Interest Ordinance 2002
impugned action of respondent was illegal and contrary to law – Respondent’s case was that notice under section
13(2) was issued under Act even though inadvertently, words ‘ordinance’ was
printed in place of ‘Act’ – Whether since ordinance 2002 was not in force as on
date of impugned proceedings, liberty was given to respondents to further
proceed with matter in accordance with Act – Held, yes
The petitioner No. 1 took loan from the respondent bank. The petitioners 2 to 6 stood as surities for the loan amount and offered security of agricultural land and their dwelling houses. On failure of the petitioner No. 1 to repay the loan the respondent issued possession notice purporting to be under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance 2002 (i.e. ordinance) and thereafter took possession of agricultural lands and dwelling house of the petitioners. The petitioners filed instant writ petition for a writ of mandamus or any other appropriate writ, order or direction directing the respondents not to dispossess the petitioners from their lands and houses under the guise of taking recourse to Ordinance, 2002 by declaring the action of the respondents in proceeding under the Ordinance which had been repealed as illegal, unconstitutional, artbitrary and opposed to the principles of natural justice and to pass such other suitable orders. The respondent in its counter affidavit stated that it initiated proceedings under the provisions of the Act and issued notice dated 23-7-2005 under section 13(2) of the Act demanding the petitioners to repay Rs. 13,31,531 due, with interest within 60 days failing which the Bank will exercise the powers under the Act. In the said notice the Bank had given the particulars of the properties which were charged to the Bank. While sending the said notice, the respondents-Bank used the old format which was printed when the Ordinance was promulgated. Since the petitioners failed to pay the amount due as per the notice under section 13(2), the Bank issued the notice under section 13(4) of the Act taking possession of the immovable properties mentioned therein, but the bank had not taken possession of the agricultural properties as alleged by the petitioners. Therefore, the notice under section 13(2) was issued under the Act even though inadvertently the words ‘Ordinance’ was printed in place of ‘Act’.
In the light of the respective stands taken by the parties, it was clear that the Ordinance as such was not in force on the date of the impugned proceedings. In view of the same, liberty was given to the respondents to further proceed with the matter in accordance with Law. With the above observation, the writ petition was disposed of. [Para 6]