SHAIKH MEHMOOD SHAIKH BIBHAN Vs. AUTHORIZED OFFICER

JUDGEMENT

(1.) The Petitioner has challenged the legality of a notice issued on 16 June 2009 by the First Respondent under Section 13(2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002. By the notice the Petitioner has been informed by the bank of having taken symbolic possession of a residential flat. The Petitioner claims to have purchased the flat from the Third Respondent at and for a consideration of Rs. 15 lacs on 7 November 2007. The case of the Petitioner is that on 4 January 2008 the Petitioner allowed the Third Respondent to reside in the flat by executing a Leave and Licence Agreement for a period of eleven months which was extended for an equivalent period on 5 January 2009. The Petitioner alleges that he took possession on 5 November 2009. On 19 November 2009 the Third Respondent is alleged to have executed an affidavit cum declaration stating that though he had sold the flat to the Petitioner he had not transferred his membership in the Cooperative Society in favour of the Petitioner. The Third Respondent allegedly stated that during the period of the Leave and Licence Agreement, he had taken a loan without informing the Petitioner. According to the Petitioner in January 2010 he was informed by the members of the Cooperative Society that symbolic possession of the flat was taken by the First and Second Respondents under the Securitisation Act. In the Affidavit in Reply filed on behalf of the bank it has been stated that the Third Respondent had approached the bank for a mortgage loan facility in the amount of Rs. 7 lacs. The Bank extended the loan to the Third Respondent against a mortgage in respect of the residential flat which is a secured asset. Accordingly a letter of sanction was issued by the bank on 23 February 2006. The Third Respondent had executed various Agreements with the bank in February and March 2006. The Third Respondent is stated to have deposited the title deeds of the flat with the bank with an intent to create an equitable mortgage by deposit of title deeds. The bank therefore claims to be a secured creditor. Initially the bank issued a notice under Section 13(2) on 10 September 2008. Thereafter a notice under Section 13 (4) was issued on 29 April 2009. The notice has been impugned in these proceedings.

(2.) The Petitioner as a third party would fall within the description of "any person" within the meaning of Section 17 of the Securitisation Act. If the Petitioner is aggrieved by a measure taken by the bank under Section 13(4) his recourse would be to an appellate remedy before the Debt Recovery Tribunal under Section 17. However, it has been sought to be urged on behalf of the Petitioner that the bank in question is a Cooperative Bank governed by the provisions of the Maharashtra Cooperative Societies Act 1960. Hence, it has been submitted that the remedies under the Securitisation Act would not be available to a Cooperative Bank.

(3.) The issue which is sought to be raised on behalf of the Petitioner is not res integra. In so far as this Court is concerned the issue stands concluded by the judgment of a Division Bench in Khaja Industries and etc. v. State of Maharashtra and Anr., 2007 AIR(Bom) 722. The same view was reiterated in a subsequent Division Bench judgment of this Court in Rama Steel Authorities and Ors. v. Union of India and Anr., 2008 AIR(Bom) 38 A Division Bench of the Madras High Court has also held that the remedies under the Securitisation Act are available to a Cooperative Bank in Raj Kumar Khemka v. Union of India and Ors., 2009 AIR(Mad) 143 The Kerala High Court has also adopted the same view in a judgment of a Division Bench in George Kutty Abraham and Ors. v. Secretary Kottayam District Co-operative Bank Ltd. and Ors., 2008 AIR(Ker) 137.