Judgment:
The respondent-bank had approached the Debt Recovery Tribunal under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereafter referred to as the 1993 Act) for realizing its dues, inter alia, against the petitioner.
The proceedings were registered as OA/30 of 2004 wherein the petitioner was imp leaded as defendant no.4. After approaching the Tribunal, the bank issued notice to the petitioner under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter referred to as the 2002 Act) dated 31st August, 2007 calling upon her to clear the dues of the bank to the tune of Rs.20,66,749/-. By her representation dated 3rd November, 2007, the petitioner raised an objection to the demand notice issued under Section 13(2) of the 2002 Act. It was her specific contention that she had never obtained any loan from the bank upon mortgaging her property and that the deed which the bank was referring to is a forged document.
The bank by its letter dated 14th November, 2007 rejected the objection of the petitioner. It was at this stage that this petition was presented on 22nd January, 2008 praying for direction on the bank not to proceed further against the petitioner under the 2002 Act. On receiving the petition, this Court had passed an interim order restraining the bank from proceeding further and invited affidavits.
The writ petition has since appeared for final hearing before this Court. On the last occasion, Mr. Roychowdhury, learned Advocate for the petitioner sought leave of Court to file a supplementary affidavit. Leave was granted and a direction was issued for service of such supplementary affidavit on Mr. Paul, learned Advocate for the bank. It appears from the supplementary affidavit that the proceedings initiated by the bank under Section 19 of the 1993 Act has been allowed by the Tribunal by judgment dated 14th November, 2008 as against defendant nos.1, 2 and 3 therein. However, so far as the defendant no.4 (the present petitioner) is concerned, the Tribunal returned findings as follows:
The gist of the above discussion is that the bank has filed to prove that the defendant no.4 had deposited the Ex.A-10 with intention to create a security thereon and also filed to prove that Ex.A-10 is a valid title deed so as to bind the defendant no.4. As such, the issue nos.(a) and (b) are answered against the applicant bank and in favour of the defendant no.4. It would also be worthwhile to reproduce below the issue nos. (a) and (b) referred to in the above extract: (a) Whether the defendant no.4 had deposited her title deed with the bank with an intention to create equitable mortgage; and (b) Whether there is any valid and enforceable mortgage in favour of bank with regard to the immovable property of the defendant no.4.
It is, therefore, clear that the contention of the petitioner in her representation filed against the demand notice under Section 13(2) of the 2002 Act has ultimately been proved to be correct. The bank was remiss in instituting proceedings under the 2002 Act and ought not to have rejected the representation of the petitioner without due scrutiny. By compelling the petitioner to approach this Court, the bank has caused harassment to her for which the bank must bear the consequences. In the result, the demand notice issued under Section 13(2) of the 2002 Act by the bank and the order rejecting the representation of the petitioner referred to above stands set aside.
The writ petition stands allowed with cost assessed at Rs.5,000/- to be paid to the petitioner by the bank within a month from date. Mr. Roychowdhury has prayed for compensation. I am not inclined to make any order for compensation. However, it is made clear that the petitioner shall be free to sue the bank for compensation before the Civil Court.
Urgent certified Photostat copy of this order be made available to the parties, if applied for, upon compliance of all requisite formalities.