SUMANTRI DEVI Vs. CANARA BANK

JUDGEMENT

(1.) In this application, the petitioner has prayed for issuance of a direction to the respondents for quashing the order dated 22.3.2006 issued by the respondents under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) 2002 and also for quashing the order dated 2.9.2006 issued by the respondent Bank under Section 13(4) of the Act. Further prayer has also been made for issuance of mandamus commanding upon the respondents to accept the outstanding amount of the petitioner in instalments as may be fixed by this Court and also to restrain them from transfer of the petitioner's property measuring 1620 sq ft. situated at mouza Shyamganj, Thaha No. 413, JB No. 62/2988, Ward No. 10 and part of plot No. 21 bearing survey plot No. 3211/3034 in Taluka Deoghar, within the district of Deoghar, to any third party.

(2.) THE case of the petitioner, in brief, is that she had applied for a housing loan from the respondent Bank at its Branch at Deoghar in the year 2002 for a sum of Rs. 4.50 lakhs for construction of her residential house. On 4.4.2003, a loan of Rs. 3.50 lakhs was granted to her which was re -payable in 180 instalments together with interest at the rate of 8.75% per annum. By way of collateral security, the land, details of which has been mentioned above was mortgaged with the Bank by way of deposit of the title deed. Subsequently, the petitioner requested for grant of further loan of Rs. 50,000/ -. For sanction of the amount, the respondent Bank insisted on two conditions, namely furnishing of security for grant of loan and to provide a salaried person whose salary could be credited with the Bank as a guarantor. The petitioner had though commenced repayment of the loan amount earlier disbursed to her by depositing the monthly instalments, but she could not maintain regularity. However, on 15.3.2005 the respondent Bank served the petitioner with a notice for depositing the monthly instalments. Her request for extending time was not granted and on the contrary, the Bank proceeded to take action for possession of the mortgaged property and later, for auction sale of the property.

(3.) MR . Indrajit Sinha, learned Counsel for the petitioner has assailed the action of the respondent Bank on the ground that the respondent Bank has committed a serious illegality by failing to comply with the mandatory provisions of law in as much as without meeting the grounds of objection raised by the petitioner in response to the notice issued under Section 13(2) and 13(4) of the Act, the respondents have illegally proceeded to take possession of the petitioner's property. It is also pointed out that since the petitioner had offered to repay the entire dues within three months from the date of auction notice, such offer having been made at a time when the auction sale was not confirmed, the Bank ought to have given an opportunity to the petitioner to liquidate her loan. Learned Counsel further submits that without obtaining an evaluation report from the Approved Valuer as per the procedure laid down under Rule 8(5) of the Security Interest (Enforcement), Rules, 2002, the respondent Bank has arbitrarily fixed the reserve price of the property at Rs. 4 lakh only, whereas, according the present market value, the petitioner's property is worth more than rupees 24 lakhs. By under valuation of the property, it has been sold at a virtually throw away price, thereby causing heavy monetary loss to the petitioner.