D RAVICHANDRAN Vs. MANAGER INDIAN OVERSEAS BANK COIMBATORE

JUDGEMENT

(1.) CHALLENGE is to the order dated 8-11-2005 passed by the respondent bank under Sec.13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act (in short SARFAESI Act), bringing the secured assets of the petitioner for sale under SARFAESI Act.

(2.) THE facts, in brief, are: Petitioner is a partnership firm, carrying on business in farming activities. For establishing a poultry farm, petitioner approached the respondent bank for credit facility. Respondent bank sanctioned the petitioner Rs.45,00,000 as per the loan sanction order dated 12.4.1996. Petitioner mortgaged with the respondent bank certain lands as collateral security for the said loan. Petitioner committed default in repayment of the loan amount. Since the negotiations between the parties regarding the settlement of the outstanding loan amount did not fructify, the respondent bank initiated action under the provisions of Sec.13(2) of SARFAESI Act and issued the impugned notice. Aggrieved, the petitioner has filed the present writ petition.

(3.) HEARD the learned counsel for the parties and perused the records. It is not in dispute that the petitioner availed credit facilities against the security of immovable property, viz., lands to an extent of 14.22 acres and 8.77 by way of equitable mortgage for establishing a poultry farm and that consequent upon the defaults committed by the petitioner in payment of principal as well as interest, the petitioner's loan account was treated as Non-Performing Asset as on 31.2.2005 and the second respondent issued the impugned notice under Sec.13(2) of the SARFAESI Act calling upon the petitioner to pay in full and discharge the liabilities to the bank amounting to Rs.46,26,893 failing which, the petitioner was informed, that action would be taken under Sec.13(4) of the said Act.