2019 (1) TMI 1950 - HC - Indian Laws

Recovery of debts - Attachment of rent of the property - petitioners submitted that the petitioners are neither borrowers nor guarantors and have not created any sort of encumbrance in favor of respondent-Bank in respect of the property in question - HELD THAT - The writ petitions are disposed of with liberty to the petitioners to make representation to the Recovery Officer within a period of one week from the date of receipt of certified copy of the order passed today.

Summary

Issues:
Validity of notice under Recovery of Debts due to Banks and Financial Institutions Act, 1993.

Analysis:
In the present case before the Karnataka High Court, the petitioners challenged the validity of a notice issued by the Recovery Officer under the provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The petitioners, who claimed not to be borrowers or guarantors, argued that they had not created any encumbrance in favor of the respondent bank concerning the property in question. The petitioners sought an opportunity to file objections before the Recovery Officer regarding the notice that ordered the attachment of rent from the property. The court considered the submissions and disposed of the writ petitions by granting the petitioners the liberty to make representations to the Recovery Officer within one week from the date of receiving the order. The Recovery Officer was directed to hear the petitioners on the objections, if filed, and to decide on them by a speaking order within one month from the receipt of such objections.

This judgment primarily revolves around the interpretation and application of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The court examined the petitioners' contentions regarding their lack of involvement as borrowers or guarantors and their assertion of not creating any encumbrance in favor of the respondent bank. The court's decision to allow the petitioners to file objections and have the Recovery Officer decide on them within a specified timeframe underscores the importance of procedural fairness and the right to be heard in matters related to debt recovery. The judgment emphasizes the need for adherence to legal procedures and principles of natural justice in matters concerning the attachment of property and recovery of debts, ensuring that parties are given a fair opportunity to present their case and have their objections duly considered and addressed.