D.THIAGARAJ & ANOTHER V/S PNB HOUSING FINANCE & OTHERS DT: 09/03/2009

IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 9TH DAY OF MARCH, 2009
PRESENT
THE HON’BLE MR.P.D.DINAKARAN, CHIEF JUSTICE
AND
THE HON’BLE MR.JUSTICE K.L.MAJUNATH
WRIT PETITION NO.14830/2008 (GM-DRT)

BETWEEN:
D.THIAGARAJ AND ANOTHER                        PETITIONERS
(By Advocate M/s. M.G.Kumar Law Firm
& D.N. Nataraj for P-1)
AND
M/S PUNJAB NATIONAL BANK
HOUSING FINANCE LTD.,
AND OTHERS                                                RESPONDENTS

(Advocate Sri.Y.V.Parthasarathy for R-1)
(Advocate Sri.B.S.Mahendra for R-2)
(R-3   ….   served)

–        – – –  –
This Writ Petition is filed under Art.226 & 227 of The Constitution of India to set aside the condition of deposit Rs.5,00,000/- in the common order Annexure-L passed in IN (SA)148/2008 and IN (SA) 149/2008 dated 24.3.2008 on I.A.No.421/2008 by the Debt Recovery Tribunal, Chennai and direct R-1 to refund the said sum of Rs.5,00,000/- with interest to the petitioners forthwith and to further direct R-3 to club both the appeals in IN (SA) 148/2008 and IN (SA) 149/2008 and treat them as one appeal and declare the procedure, adopted by R-3 to file two appeals under Sec.18 of the SARFAESI ACT against the same order of the DRT under Sec.17 as illegal, and direct the DRAT, Chennai, to hear and dispose the pending IAs for amendment of appeal and interim relief in Annexure-G, H and K bearing IA No.1294/2008, I.A.1329/2008 and IA No.1628/08 respectively before final disposal of the main appeal under Sec.18 of the SARFAESI Act and also to declare that unless the amount due is more than 20% of the principal and interest thereon, R-1 bank has no authority of law to initiate action or invoke the provisions of Sec.13 of the SARFAESI Act.
This Petition is coming on for preliminary hearing this day, MANJUNATH J. made the following:

O R D E R

Petitioners are challenging the legality and correctness of the order passed by the Debt Recovery Appellate Tribunal, Chennai dated 24.3.2008 directing the petitioners to deposit a sum of Rs.5 lacs and also to direct R-1 to refund the aforesaid amount of Rs.5 lacs with accrued interest thereon and for other reliefs.

2.   We have heard the counsel for the parties.

3.   It is the case of the petitioners that they availed the home loan of Rs.10 lacs from R-1 bank agreeing to repay the same with equal monthly instalment of Rs.10650/-. R-1 bank by illegally declaring petitioners loan account as NPA and initiated action under SARFAESI Act under Sec.13 (2) of the Act. It is their case that contrary to the provisions of law, fraudulently their property was sold for a meager sum of Rs.23 lacs as against the market value of Rs.60 lacs. Petitioners filed an appeal before the Debt Recovery Tribunal, Bangalore, which appeal came to be dismissed on 5.2.2008. Challenging the same, an appeal is filed before the DRAT, Chennai and the DRAT, Chennai has granted a conditional order directing petitioners to deposit a sum of Rs.5 lacs. Contending that the direction issued by DRAT, Chennai as bad in law, present petition is filed.

4.   During the course of the arguments, counsel for the petitioners submits that the respondent-bank is in possession of excess sale amount which is in excess of the amount alleged to have been claimed by R-1 bank. Therefore, he contends that the condition imposed by the DRAT to entertain the appeal subject to deposit of Rs,5 lacs-by the petitioners as bad in law and that they are entitled for refund of the amount deposited by them with interest.

5.   Counsel for R-1 bank does not dispute that out of the sale proceeds after adjusting the loan amount payable to R-1 bank, R-1 is having surplus funds which amount has to be refunded to the petitioners. If it is so, we are of the opinion that the condition imposed by the DRAT as bad in law and the amount deposited by the petitioners pursuant to the direction has to be refunded to the petitioners with interest accrued thereon.

6.   In the result, the petition is allowed directing R-1 bank to refund the amount of Rs.5 lacs with interest accrued thereon and the remaining prayers are not considered by this court since they have to be considered in the appeal filed by the petitioners before the DRAT. Parties to bear their costs.

Sd/-
Chief Justice

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