SHIVAM TRADERS Vs. BANK OF BARODA

JUDGEMENT

(1.) Heard learned counsel for the petitioners and learned counsel for respondents No. 1 to 3, namely, the Bank of Baroda and its authorities as well as learned counsel for the private respondent No.4, who was subsequently impleaded as he happens to be auction purchaser from the Bank.

(2.) This writ petition is for quashing auction sale dated 11-11-2006 made by the respondent first set in favour of respondent No.4 with respect to secured asset, namely, land and building of the petitioners bearing Plot No. 296 (measuring 3 kathas 10 dhurs) under Khata No.3 in Tauzi No. 5316/258 within Thana No. 9 appertaining to Circle No. 251 of. Ward No. 34. in Mauza Sheikhpura under Shastrinagar Police Station in the district of Patna and also for commanding the respondents not to interfere with the peaceful possession of the petitioners over the aforesaid premises and accept the petitioners offer for re-payment of the alleged dues of the respondent-Bank, for which the aforesaid premises was placed as secured asset under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the Act' for the sake of brevity) and also under provisions of the Security Interest (Enforcement) Rules. 2002 (hereinafter referred to as 'the Rules' for the sake of brevity). By an affidavit dated 21-11-2006, the petitioners have prayed for amendment in the reliefs by way of adding another relief for quashing letter dated 16-11-2006 (Annexure 11) issued by the authority of the Bank informing the petitioners about the aforesaid auction sale.

(3.) It is not in dispute that on 21-1-2002 the petitioners availed loan facility of Rs. 8 lacs at the rate of 14% interest per annum as well as penal interest on equitable mortgage of the aforesaid secured asset in favour of Bank by way of collateral security, but due to the recurrent losses etc., business was closed and the Bank was informed, whereafter on 30-9-2002 the petitioners' account was declared as Non-Productive Account (NPA). Consequently the Bank issued demand notices on 30-5-2006 (Annexures 1 series) under Section 13(2) of the Act for outstanding dues amounting to Rs. 13,82,511/-, but dues were not shown categorically. In reply thereto, the petitioners filed a show cause dated 10-7-2006 (Annexure 2) and offered one time settlement as per scheme of the Bank as the petitioners had already deposited Rs. 2 lacs in the loan account. But. without referring to the same, the authorities of the Bank vide letter dated 17-8-2006 (Annexure 3 series) directed the petitioners to hand over peaceful possession of the secured asset to the Bank on 30-8-2006.