K BALA KRISHNA Vs. DEBTS RECOVERY TRIBUNAL

JUDGEMENT

(1.) This is a petition for quashing order dated 07-10-2005. passed by Debts Recovery Tribunal, Hyderabad Bench (for short 'the Tribunal;) in S.A.No.14 of 2004 and also the sale conducted by State Bank of India (for short 'the Bank') for realization of its dues.

(2.) In the affidavit filed by him, the petitioner has averred that he purchased semi-finished flat No.307, Prameela Towers, Kakaguda, Secunderabad from M/s. Siri Constructions vide registered sale deed dated 25-09-2000. For the purpose of purchasing the flat, he applied to the Bank for sanction of aterm loan of Rs.6,00,000/-, which was duly sanctioned. It has been further averred that even though the terms of agreement entered with the builder postulated disbursement of loan by the Bank in instalments subject to the stage-wise completion of construction work, the Bank authorities released the entire loan amount ignoring the fact that the builder had not taken steps to complete the construction work. Still further, it has been averred that even though notice issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act') was not served on him, the Bank resorted to the provisions of Section 13(4) of the Act and tried to dispose of the property and theTribunal dismissed the application filed under Section 17 of the Act without assigning cogent reasons.

(3.) Shri M.L. Prasad, learned counsel for the petitioner assailed the order of theTribunal by arguing that the reasons assigned by it for refusing to entertain the application filed by the petitioner under Section 17 of the Act are legally untenable. Shri Prasad submitted that while dismissing the petitioner's application, the Tribunal completely overlooked the fact that notice issued under Section 13(2) of the Act had not been served on the writ petitioner. He emphasized that service of notice issued under Section 13(2) of the Act constitutes a condition precedent to the taking of action under Section 13(4) of the Act and as the Bank failed to comply with this condition, the Tribunal should have annulled the notice issued under Section 13(4) of the Act and further action taken by the Bankfor disposal of the property.