SATYAVOL VENKAT KRISHNA RAO Vs. UNION OF INDIA

JUDGEMENT

(1.) Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioners have prayed for declaration of the second proviso to Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the SARFAESI Act') as unconstitutional and further to issue a writ of certiorari to quash the order dated 28th June, 2010 passed by the Debts Recovery Appellate Tribunal, Delhi made in Inward No.293 of 2010.

(2.) The facts which are essentially to be stated for adjudication of this petition are that the petitioner No.1 is the director of the petitioner No.3, M/s PRK Exports Private Limited and the proprietor of the petitioner No.4, M/s Premier Overseas. A loan was granted to the petitioner No.1 by the respondent No.2, the HDFC Bank, under the LAP scheme to the tune of Rs.25 lakhs for which he had mortgaged certain properties.

(3.) On 13th April, 2007, the respondent bank enhanced the loan granted after reviewing all the parameters of performance and timely repayment of the dues towards the loan from the earlier amount. On 22nd December, 2007, the bank accepted a request for fresh loan to the petitioner No.1 based upon the need of fund on account of business expansion. A security agreement was entered into on 1st January, 2008 between the petitioner No.1 and the respondent No.2 bank whereby an equitable mortgage was created in respect of secured asset by depositing the sale deed dated 14th October, 2005 of the secured asset.