9911796707
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Issues Involved:
1. Whether a secured creditor can proceed under the Securitisation Act without withdrawing proceedings under the R.D.B. Act. 2. Validity of the guarantee deed and liability of the guarantor. 3. Limitation period for initiating action under the Securitisation Act. Issue-wise Detailed Analysis: 1. Whether a secured creditor can proceed under the Securitisation Act without withdrawing proceedings under the R.D.B. Act: The petitioners argued that the respondent bank must elect one remedy, either under the R.D.B. Act or the Securitisation Act, and cannot pursue both simultaneously. The court examined the provisions of both acts, noting that Section 13(10) of the Securitisation Act allows a secured creditor to file an application to the D.R.T. if dues are not fully satisfied with the sale proceeds of the secured assets. The court emphasized that the Securitisation Act is intended to be in addition to, and not in derogation of, the R.D.B. Act, as per Section 37 of the Securitisation Act. The court rejected the petitioners' contention that pursuing remedies under both acts would result in conflicting orders, stating that the doctrine of estoppel or res judicata would apply to prevent such conflicts. The court concluded that a secured creditor is not required to elect between the two acts and can proceed under both. 2. Validity of the guarantee deed and liability of the guarantor: The petitioners contended that the guarantee deed was invalid as it was not signed by the bank officials, thereby absolving petitioner No. 1 from any liability. The court rejected this argument, stating that the petitioners had signed the guarantee deed, and the bank had acted upon it by releasing funds. The court held that the absence of the bank's signature did not negate the existence of a concluded contract. Furthermore, the court noted that under Section 13(ii) of the Securitisation Act, a secured creditor can proceed against the security without taking other measures specified in the act. Thus, the court found that the proceedings against petitioner No. 1 were valid. 3. Limitation period for initiating action under the Securitisation Act: The petitioners argued that the claim under the Securitisation Act was barred by the limitation period prescribed under the Limitation Act. The court examined the timeline of events: the loan was sanctioned in 1994, the suit was filed in 1997, and the notice under Section 13 was issued in 2004. The court referred to the limitation period for the sale of mortgaged property, which is 12 years, and concluded that the action taken under the Securitisation Act was within the limitation period. Conclusion: The court found no merit in the petitioners' arguments and upheld the respondent bank's right to proceed under both the R.D.B. Act and the Securitisation Act. The court emphasized that the Securitisation Act aims to provide a speedy recovery mechanism for financial institutions and should not be frustrated by procedural limitations. The court discharged the rule and rejected the petitioners' request for the continuation of interim relief, stating that it would be contrary to the objectives of the Securitisation Act. No order as to costs was made.
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