2017 (8) TMI 1015 - SC - Indian Laws

Recovery of dues - jurisdiction for initiating steps under The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, since the Bank is a cooperative Bank - Held that - It is in the interest of both the sides to put an end to this litigation by extending an equitable treatment to the petitioner debtor. Accordingly, this writ petition is disposed of directing Respondent No.2 to first proceed against the first two items described in Schedule B (Annexure P-2) and in case still the liabilities are not wiped out they may proceed against the fourth item. We make it clear that before taking recourse to the sale of the fourth item, the petitioner shall also be put to notice as to whether he would otherwise clear the liability for the remaining balance. We also make it clear that the petitioner shall not take recourse to any other litigation regarding the procedure for sale without permission from this Court. This condition we are imposing since we are informed that no willing purchaser is prepared to take the property in view of the litigations.

Summary

Issues: Recovery of dues by a cooperative bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; Sale of properties for debt recovery; Equitable treatment to the debtor in pending litigation.

Analysis:
1. The writ petition challenges the steps taken for recovery of dues by a cooperative bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner expressed inability to make any deposit towards the dues, leading the court to consider concluding the recovery process promptly in the petitioner's interest.

2. The petitioner identified four properties for potential sale to clear the liabilities, with the third property already sold. It was argued that selling the first two properties could potentially eliminate the entire debt burden.

3. The bank's counsel highlighted that ongoing litigation deterred potential buyers from participating in property auctions, causing a delay in the recovery process.

4. Considering the circumstances, the court emphasized the importance of providing equitable treatment to the debtor and decided to end the litigation by facilitating a fair resolution for both parties.

5. The court directed the bank to prioritize the sale of the first two properties listed in Schedule "B" to recover the outstanding dues. If the liabilities persist after the sale of these properties, the bank was permitted to proceed with the sale of the fourth property. The petitioner must be informed before selling the fourth property to explore other options for clearing the remaining balance.

6. To prevent further delays due to litigation, the petitioner was prohibited from initiating any new legal proceedings related to property sale without court permission. This measure aimed to address the lack of interested buyers due to existing litigations surrounding the properties.

7. The judgment concluded by disposing of any pending applications related to the case, ensuring a clear directive for the recovery process and maintaining transparency in the debtor's involvement in clearing the outstanding liabilities.