SAHARA INDUSTRIES Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) PETITIONERS had borrowed a loan from the respondent -Bank, namely, State Bank of India, Main Branch, Kashipur, District -Udham Singh Nagar in the year 2010, for an amount of Rs.65.00 lakhs. This loan could not be repaid and, consequently, the respondent -Bank proceeded under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (from herein after referred to as "the SARFAESI Act ").

(2.) A notice under Section 13 (2) of the SARFAESI Act, 2002 was given to the petitioners to which petitioners gave a reply. Meanwhile, the respondent -Bank also filed an Original Application before the Debt Recovery Tribunal, Lucknow under Section 19 (1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (from herein after referred to as "the DRT Act"). Thereafter, the Bank proceeded under Section 13 (4) of the SARFAESI Act and took a symbolic possession of the secured asset, namely, the land which was mortgaged to the Bank.

(3.) BEING aggrieved, the petitioners filed present writ petition before this Court, wherein the ground taken by the petitioners is that when an application under Section 19 (1) of the DRT Act has already been filed by the Bank before the DRT, it cannot further proceed under Section 13 (4) of the SARFAESI Act. This argument is based on two grounds, (a) Bank has already given a notice under Section 13 (2) of SARFAESI Act, they cannot proceed under any other provision of law against the borrower and, (b) they have to take prior permission of the Debt Recovery Tribunal before proceeding further against the borrower in terms of proviso to Section 19 (1) of the DRT Act. Section 19 (1) of DRT Act reads as follows: -