SAHIR SHAH Vs. BANK OF INDIA

JUDGEMENT

(1.) Whether permission of the Debt Recovery Tribunal is a pre requisite for a Bank or Financial Institution to invoke the provisions of Section 13B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "Securitisation Act") after the insertion of the proviso to Section 19 of the Enforcement of Security Interests and Recovery of Debts Laws Amendment Act, 2004, is the question that has come up for consideration in this case.

(2.) Bank of India, respondent herein, filed O.A.No. 318 of 2001 before the Debt Recovery Tribunal on 23.11.2001 for realisation of an amount of Rs. 4,81,92,595.74 from the writ petitioners and others jointly, severally and personally together with interest at 18% per annum with quarterly rests from 23.11.2001 till date of payment and also for costs of the proceeding. While the O.A. was pending, the Bank invoked the provisions of Section 13(2) of the Securitisation Act vide notice dated 23.1.2004 informing them that an amount of Rs. 6,33,65,539/- is outstanding and that the said amount is secured by equitable mortgage of 225 cents of landed property in survey numbers 2073/11/2/1, 2073/11A/2/21 of Pallickal Village. Petitioners and others were informed that they have defaulted repayment of debts to the Bank and the Bank has classified their account as non performing account with effect from 30.9.1999. Petitioners were therefore directed to remit the amount with interest at quarterly rests within a period of sixty days from the date of notice failing which they have been informed that the Bank would take further steps in accordance with the Securitisation Act. Writ petitioners did not comply with the demand. Consequently the Bank took possession of the property mentioned in the notice in exercise of the powers conferred on the Bank under Section 13(4) of the Act read with Rule 9 of the Rules, on 22.2.2004. Later District Collector also passed an order on 24.4.2005 with the certificate that the land mentioned in the Collector's notice was already taken possession.

(3.) Writ petitioners aggrieved by those notices have approached this Court seeking a writ of certiorari to quash Exts.P3 and P4 notices and for a direction to the Bank not to take any action under the provisions of the Securitisation Act without permission of the Debt Recovery Tribunal as contemplated under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (for short RDB Act) and also for other consequential reliefs.