Kavita Srivastava vs Union Bank Of India & Others

Sudhanshu Dhulia, J

The petitioner before this Court had admittedly taken a loan from the Union Bank of India, Rudrapur Branch, District Udham Singh Nagar. Since the petitioner failed to repay the loan amount, her assets were declared as Non-Performing Assets (N.P.A.) and consequently recovery proceedings were initiated against the petitioner under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (from hereinafter referred to as the "Act"). Aggrieved, the petitioner had filed a writ petition before this Court being WPMS No.2375 of 2019, which was dismissed by this Court on 13.08.2019 on ground of alternative remedy. Thereafter, the petitioner had approached the Debts Recovery Tribunal. Meanwhile, the respondent-bank has also declared that the property of the petitioner is to be auctioned on 12.09.2019.

Since the interim relief sought by the petitioner before the Debts Recovery Tribunal on the date fixed i.e. on 30.08.2019 was not given to the petitioner, the petitioner now fearing imminent disposal of her property and has filed the present writ petition before this Court.

The primary ground taken by the petitioner here is that the loan was taken by her under a scheme called "Veer Chandra Singh Garhwali Tourism Self-Employment Scheme", which prescribes a particular mode for recovery in case of default in payment of loan which was under the U.P. Public Moneys (Recovery of Dues) Act, 1972 and therefore, the recovery proceedings cannot be initiated against her.

This argument of the petitioner is totally misconceived in view of Section 35 read with Section 37 of the Act. Sections 35 and 37 of the Act read as under:-

"Section 35. The provisions of this Act to override other laws.- The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.

Section 37. Application of other laws not barred.- The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force."

A combined reading of the aforesaid two sections make it absolutely clear that the provisions of the Act will override all other provisions.

The only argument of the petitioner therefore is that her application has not been decided. The petitioner would be at liberty to file an appeal under Section 18 of the Act before the Debts Recovery Appellate Tribunal or to amend her petition incorporating necessary amendments therein and move an appeal before DRT.

This Court has been informed by the learned counsel for the petitioner that presently Debts Recovery Tribunal is not functioning. Learned counsel for the respondent-bank, however, states that Debts Recovery Tribunal will function from 16.09.2019.

In view of this fact, although no interference is being called for by this Court in the matter, however, the writ petition stands disposed with the direction that the auction process shall go on, but in order to enable the petitioner to approach the Debts Recovery Appellate Tribunal or Debts Recovery Tribunal by way of amendment, till 19.09.2019, the auction shall not be finalized.

Let a certified copy of this order be issued today itself on payment of usual charges.