Malla Silpa vs Branch Manager, State Bank of India, Palasa Branch and Another

G. Krishna Mohan Reddy, J.—In this writ petition, the notice dated 27.12.2010 issued u/s 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ''the Act'') is challenged. The petitioner is the proprietor of M/s. Shiva Parvathi Traders. She availed cash credit facility of Rs. 18,00,000/- from the respondent Bank by creating equitable mortgage of her property depositing her title deeds. As the account became Non-Performing Asset (NPA), the respondent Bank issued notice u/s 13(2) of the Act calling upon the petitioners to pay a sum of Rs. 23,19,830/- giving 60 days time. The grievance of the petitioner is that the outstanding shown in the impugned notice is incorrect and she has requested the bank to provide copies of the loan agreement, guarantee agreement, statement of account and other relevant documents in that context, but instead of complying with the requirement, the respondent bank is trying to take possession of the property u/s 13(4) of the Act, which therefore is not tenable.

It is now well settled that when the Bank or Financial Institution initiates action under SARFAESI Act, a person aggrieved by any measures u/s 13(4) has an effective alternative remedy u/s 17(1) to approach the Debts Recovery Tribunal (DRT). It is also well settled that the DRT has got wide powers to nullify all steps taken by the Bank/Financial Institution and restore possession to the borrower or any person aggrieved. When effective alternative remedy is provided, the writ petition is barred. United Bank of India Vs. Satyawati Tondon and Others, and Kanaiyalal Lalchand Sachdev and Others Vs. State of Maharashtra and Others,

Learned Counsel for the petitioner however submits that his client is willing to approach the bank offering to clear the entire debt u/s 13(8) of the Act If that be so, the bank shall consider her request and if any measures are initiated u/s 13(4) of the Act, liberty is given to the petitioner to approach the Debts Recovery Tribunal concerned. Subject to the observation made, the writ petition is dismissed. There shall be no order as to costs.