CHEMBETI BRAHMAIAH CHOWDARY Vs. STATE BANK OF HYDERABAD

JUDGEMENT

(1.) The Writ Petition is filed for direction to the respondents not to dispossess the petitioner from Flat No. H-4, Fourth Floor of Uma Maheswari Gardens, D. No. 10-51-6/3/44, Kailashmetta, Asilmetta, Visakhapatnam; for a direction to regularise the account No. 62004835945; for a declaration that the action of the respondents is illegal and ultra vires the provisions of Article 14 of the Constitution of India besides in violation of the Securitisation Act and Rules framed thereunder on the subject and for such other order or orders as appropriate.

(2.) This Writ Petition is one more episode in a series of proceedings initiated by the petitioner to interdict proceedings under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Securitisation Act). The relevant facts require to be noticed. The petitioner (borrower) availed cash credit loan in an amount of Rs. 10,00,000/- from the respondent bank (the secured creditor) for his business and provided as collateral security the residential Flat No. H-4, Fourth Floor of Uma Maheswari Gardens, Kailashmetta, Asilmetta, Greater Visakhapatnam Municipal Corporation, by depositing the original title deeds and a letter of confirmation, dated 06-02-2006, creating an equitable mortgage. The petitioner admittedly committed default in the payment of monthly instalments. The secured creditor classified the loan account as a non-performing asset (NPA) and initiated proceedings under the Securitisation Act. The account was classified as NPA on 30-04-2007. The secured creditor issued eviction notice dated 26-07-2007 under Section 13(2) of the Act, which the petitioner received but failed to discharge the liability as stipulated, within the period of 60 days. Thereupon, the Authorised Officer of the secured creditor issued a possession notice on 08-10-2007. The petitioner thereupon filed S.A. No. 117 of 2007 before the Debts Recovery Tribunal, Visakhapatnam (Tribunal) impeaching the action of the secured creditor i.e., the taking of possession. An interim stay was granted by the Tribunal on condition that the petitioner should deposit Rs. 1,00,000/- on or before 06-11-2007 and in default the secured creditor would be at liberty to proceed against the property. The petitioner failed to comply with the condition and the stay stood dissolved. The Tribunal granted on 11-02-2008 an interim stay again on condition. The condition was not complied with and that stay also stood vacated. On 03-11-2008 S.A. No. 117 of 2007 was dismissed by the Tribunal for default.

(3.) As symbolic possession alone was taken of the secured asset on 08-10-2007, in view of the dismissal of S.A. No. 117 of 2007 the Authorised Officer of the secured creditor with a view to bring the property to sale under the provisions of the Act was required to take physical possession of the property. As the petitioner was interfering with the secured creditor's efforts to take possession of the property, the respondent bank filed through its Authorised Officer Criminal M.P. No. 4297 of 2008 under Section 14 of the Act. After obtaining an order under Section 14, when the Officer of the Court proceeded to the property to take possession and hand it over to the Authorised Officer of the bank, the petitioner's wife is stated to have obstructed the delivery process and to have filed M.P. No. 480 of 2009 in Criminal M.P. No. 4297 of 2008 questioning the bank's right to proceed against the property. M.P. No. 480 of 2009 was dismissed on 20-04-2009.