VISAKHA ENTERPRISES Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) ORDER dated 05.05.2011 passed by the Recovery Officer, Debt Recovery Tribunal, Cuttack on the petition dated 13.07.2009 filed by the present petitioners to stay the Recovery Proceeding, which was rejected by the aforesaid impugned order, is the subject matter of this writ petition.

(2.) THE petitioners had availed credit facility of Rs.8,00,000.00 (rupees eight lakh) on 10.04.2003 from the opposite party ­ Bank on primary security of hypothecation of stocks, surrender of L.I.C. Policy, Fixed Deposit and collateral security of land and building, etc. standing in their name. The petitioners having defaulted in repayment, appropriate proceeding before the Debt Recovery Tribunal, Cuttack was taken up by the opposite party ­ Bank and certificate for Rs.12,76,890.64p. (twelve lakhs seventy-six thousand eight hundred ninety and paise sixty-four only) with 12% interest thereon from the date of filing of the suit till recovery of the amount was granted by decree dated 06.08.2007. The Certificate Debtor / Petitioner filed a petition on 13.07.2009 before the Recovery Officer averring that the Certificate Holder ­ Bank had insured the assets / units of the Certificate Debtor ­ Petitioner by paying Insurance Premium on debit of the same to the loan account to the Certificate Debtor / Petitioner; unfortunately the unit was burnt due to accident with fire, but the Certificate Debtor / petitioner did not take any step to obtain the claim from the concerned Insurance Company; however, after the Certificate Debtor approached the District Consumer Commission, the District Consumer Commission awarded Rs.9.5 lakhs (nine lakhs fifty thousand) and said amount was enhanced to Rs.12.5 lakhs (twelve lakhs fifty thousand) by the State Consumer Commission; as per direction of the learned State Consumer Commission, the Insurance Company also deposited Rs.3,00,000.00 (three lakhs), which has been adjusted towards the loan account of the Certificate Debtor ­ petitioner. Now the Revision filed both by the Insurance Company and the Certificate Debtor ­ petitioner is pending before the National Consumer Commission, who, in turn has directed the Insurance Company to deposit Rs.7,00,000.00 (seven lakhs) before the State Consumer Commission; that order has been complied by the said Insurance Company and Rs.7,00,000.00 (seven lakhs) has been deposited with the State Consumer Commission.

(3.) THE opposite party ­ Bank has taken a stand that even after adjustment of Rs.4,48,850.00 (four lakhs forty-eight thousand eight hundred and fifty) deposited by the Certificate Debtor ­ petitioners, the Bank's dues come to Rs.15,89,000.00 (fifteen lakhs eighty-nine thousand), which cannot be met even by the claim amount of Rs.7,00,000.00 (seven lakhs), if allowed to be deposited in the loan account. It is further submitted that as the value of the secured assets is about Rs.20,00,000.00 (twenty lakhs), the Bank has its privilege to proceed in the matter. Lastly, it is contended that alternative remedy of appeal in Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ("RDB Act" for short) being available to the petitioners, the writ petition should be dismissed.