SASI Vs. HDFC

JUDGEMENT

(1.) Is Ext. P1 verdict passed by the Civil Court, directing the respondent / secured creditor to furnish a statement of accounts and granting a decree of prohibitory injunction from proceeding against the assets of the borrower, till a final decree is passed on the basis of the statement of accounts to be furnished, is a 'bar' for the secured creditor from proceeding against the secured assets in terms of the SARFAESI Act, forms the subject matter of consideration in this case.

(2.) The petitioners, who are the husband and wife availed a housing loan of Rs.3.5 lakhs from the respondent Housing Development Finance Corporation Ltd. (HDFC in short) creating security interest over the property comprising of nearly 4.5 Ares with residential building, which was to be repaid in 180 equal monthly instalments. But the repayment could not be effected on time. According to the petitioners, the HDFC demanded exorbitant amounts by way of additional interest, incidental charges etc. which were contrary to the terms of the agreement and resorted to coercive steps, which made them to approach the Munsiff's Court, Thiruvananthapuram by filing OS No. 122 of 2006 for settlement of accounts and for permanent prohibitory injunction. The respondents contested the matter and on conclusion of the trial, Ext. P1 preliminary decree was passed, directing the respondent / defendant to furnish statement of accounts, also granting prohibitory injunction from proceeding against the assets of the petitioners / plaintiffs before the final decree to be passed on the basis of the statement of accounts to be furnished and considered.

(3.) The case of the petitioners is that, Ext. P1 judgment / decree has become final, the same having not been subjected to challenge. But the fact remains that the respondent Corporation without complying with the direction contained in Ext.P1 verdict, issued Ext. P4 notice under S.13(2) of the SARFAESI Act on 05/07/2007 with the intention to proceed against the secured assets. It is said that, the petitioners sent a reply to Ext. P4. While so, the respondent Corporation filed Ext. P5 application before the Chief Judicial Magistrate, Thiruvananthapuram under S.14 of the SARFAESI Act, seeking for necessary assistance to take physical possession of the secured asset and to have it sold in public auction. On receipt of a copy of Ext. P5, the petitioner entered appearance before the Chief Judicial Magistrate, Thiruvananthapuram and submitted their version, also producing a copy of Ext.P1 judgment / decree contending that no further steps could be pursued, contrary to the terms of the decree. After hearing both the sides, the learned Chief Judicial Magistrate found that Ext.P1 decree was 'not a bar' and that the dispute if any, had to be got agitated before the Debt Recovery Tribunal. Accordingly Ext. P6 order was passed appointing an Advocate Commissioner to take physical possession of the property and to have it handed over to the HDFC and to report compliance. The petitioner is challenging the correctness and sustainability of the order passed by the Chief Judicial Magistrate in this Writ Petition.