2010 (9) TMI 1244 - HC - Indian Laws

Summary

Issues Involved:
1. Maintainability of the writ petition.
2. Entitlement to the benefits of the One Time Settlement (OTS) Scheme.
3. Legality of the possession notice issued u/s 13(4) of the SARFAESI Act.

Summary:

1. Maintainability of the Writ Petition:

The Petitioner challenged the possession notice dated 16.09.2004 issued by the Respondent bank under the SARFAESI Act after a lapse of six years. The Respondent argued that the writ petition is not maintainable as no appeal was filed by the Petitioner u/s 17 of the Act within 45 days before the Debt Recovery Tribunal. The Court held that the Petitioner, having not challenged the possession notice in a timely manner and not availing the statutory remedy, cannot invoke the writ jurisdiction of the High Court. The Court cited the Supreme Court's decision in United Bank of India v. Satyawati Tondon and Ors., emphasizing that the High Court should not entertain a writ petition if an effective alternative remedy is available.

2. Entitlement to the Benefits of the OTS Scheme:

The Petitioner sought the benefits of the SBI OTS-SME 2010 Scheme for settling her dues. The Respondent contended that the Petitioner is not eligible for the OTS Scheme as she violated the terms of the mortgage by transferring the secured asset to her son, creating encumbrances over the property. As per Clause 1.7 of the SBI OTS-SME 2010 Scheme, "Cases of fraud, malfeasance and wilful default will not be eligible for OTS Scheme." The Court upheld the Respondent's contention, stating that the Petitioner, having committed acts of fraud and malfeasance, is not entitled to the benefits of the scheme.

3. Legality of the Possession Notice Issued u/s 13(4) of the SARFAESI Act:

The Petitioner challenged the possession notice issued u/s 13(4) of the SARFAESI Act on 16.09.2004. The Court noted that the Petitioner did not object or reply to the possession notice and did not make any payment towards the settlement offers made by the Respondent bank. The Court held that the Petitioner, having not challenged the possession notice before the competent forum and having violated the terms of the loan by transferring the property, cannot seek relief under Article 226 of the Constitution of India. The Court referred to the Supreme Court's decision in X-Calibre Knives Pvt. Ltd. and Anr. v. State Bank of India, where it was held that a borrower who violates the conditions of the mortgage is not entitled to the benefits of the OTS Scheme.

Conclusion:

The writ petition was dismissed as not maintainable, with the Court concluding that the Petitioner has no legal right to compel the bank to accept the one-time settlement offer. The Court also denied the Petitioner liberty to move the Debts Recovery Tribunal for condoning the delay, but stated that it is always open to the Petitioner to approach the Tribunal if so advised.