BY THE COURT:
Having heard the learned counsel for the petitioners and having perused the material placed on record, this Court is unable to find any reason to interfere in this matter in the extra ordinary writ jurisdiction.
From the averments as taken in the petition and the documents annexed thereto, it appears that the respondent-bank sanctioned cash credit limits in favour of the respondents Nos. 4 and 5 against their accounts Nos. 1407 and 1406; and the petitioners stood as guarantors for such advance and placed their immoveable property in equitable mortgage with the bank. The loanees having defaulted, on 14.09.2006, the respondent-bank issued notice (Annex.3) under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘the Act of 2002’) to them and also forwarded the same to the petitioners-guarantors. It appears that the loan accounts having yet remained in arrears and nothing having been recovered for about two years, by the communication dated 23.10.2008 (Annex.7), the bank suggested its Recovery Office to adopt the necessary recovery proceedings from the property placed in equitable mortgage; and endorsed a copy thereof to the petitioners.
It is sought to be contended in this petition that the said communication dated 23.10.2008 remains wholly illegal and invalid; and that before issuing such communication, no notice under Section 13(11) of the Act of 2002 has been served on the petitioners nor were they extended any opportunity of hearing. It is also submitted that even if the accounts of principal borrowers i.e, the respondents Nos. 4 and 5 have been treated as non-performing assets, the petitioners have not been informed about the status and position of the accounts; and that the attempt on the part of the bank to straight away take over the immoveable property of the petitioners remains illegal. It is further submitted that the debt is required to be recovered from the borrower at the first and the provisions of Section 13(11) of the Act of 2002 could be resorted to only thereafter; and the attempt on the part of the bank in adopting the proceedings against the petitioners without taking the recovery proceedings against the principal borrowers remains invalid. It is also submitted that the communication (Annex.7) remains unauthorised.
During the course of submissions, the learned counsel has made a fervent appeal for sympathetic consideration of the matter and urged that the petitioners would unnecessarily be harassed in the matter with likelihood of being deprived of their property although they had extended such guarantee in good faith for the petitioner No. 2 being the sister of the proprietor of the respondent No. 5 and hence, notices may be issued in this matter where, for the fault of the brother, his sister is in trouble.
Having regard to the overall circumstances of the case where the petitioners are found to have voluntarily stood as guarantors, the submissions invoking sympathies hardly make out a case for interference; nor there appears any reason to entertain this petition.
The petitioners admittedly stood as guarantors and placed their property in equitable mortgage with the respondent-bank as a security for the loan advanced. In this position, the bank cannot be faulted if exercising its legal rights in relation to such security.
The submissions as sought to be made in this writ petition against the communication dated 23.10.2008 are rather misplaced. The said one had only been an inter-departmental communication whereby the Recovery Office was requested to take appropriate proceedings while endorsing a copy to the petitioners with a request to get the account settled by the borrowers. Merely for such a communication, it cannot be assumed that the respondent-bank would not be proceeding in accordance with law or would be taking any proceedings contrary to law.
The previous notices having been served by the bank remains a fact indisputable with the copies of such notices having been placed on record by the petitioners themselves. There is nothing on record to find that the respondent-bank has attempted to take any proceedings in violation of, or contrary to, the requirements of law.
In view of the provisions of sub-section (11) of Section 13, it is not correct to suggest that the bank is obliged to adopt the proceedings at the first against the principal borrowers before proceeding against the petitioners.
No case is made out for interference in the extra ordinary writ jurisdiction.
The writ petition fails and is, therefore, rejected.