Case Note & Summary
The petitioners, Dr. Kishor Chimasaheb Nimbalkar and Sou. Dhanshree Kishor Nimbalkar, are running a hospital. They obtained a home loan of Rs.34,00,000 in 2002 and another loan of Rs.6,80,000 in 2003 from ICICI Bank Ltd. (Respondent No.4). They paid 78 EMIs of Rs.49,273 each, totaling Rs.40,00,000, but defaulted on some EMIs. On 15 December 2007, Respondent No.4 issued notices under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for amounts of Rs.6,53,191.68 and Rs.41,86,231.12. The petitioners replied but the bank did not respond. In 2009, the loan account was transferred to Asset Reconstruction Company Ltd. (Respondent No.3), which issued fresh Section 13(2) notices on 19 June 2009. The petitioners filed a writ petition on 8 May 2016 challenging the non-consideration of their One Time Settlement (OTS) application under RBI Guidelines and seeking a direction to consider the OTS. The Court noted that the petitioners had an alternative statutory remedy under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal. The Court held that the writ petition was not maintainable and dismissed it, granting liberty to the petitioners to approach the appropriate forum. The Court also observed that the RBI Guidelines do not create a vested right to OTS.
Headnote
A) Constitutional Law - Writ Jurisdiction - Alternative Remedy - Availability of Statutory Remedy under Section 17 of SARFAESI Act, 2002 - The petitioners challenged the non-consideration of their OTS application after possession of secured asset was taken under Section 13(4) of the SARFAESI Act. The Court held that the petitioners have an efficacious alternative remedy before the Debts Recovery Tribunal under Section 17 of the Act, and therefore, the writ petition is not maintainable. The Court dismissed the petition with liberty to approach the appropriate forum. (Paras 5-7) B) Banking Law - One Time Settlement - RBI Guidelines - Enforceability - The petitioners sought direction to consider their OTS application under RBI Guidelines. The Court observed that the RBI Guidelines do not confer a vested right to OTS and that the remedy for challenging the action of the bank after possession lies under Section 17 of the SARFAESI Act, 2002. The Court declined to entertain the writ petition on this ground. (Paras 5-7)
Issue of Consideration
Whether the High Court should entertain a writ petition challenging the non-consideration of an OTS application under RBI Guidelines after possession of secured asset has been taken under Section 13(4) of the SARFAESI Act, 2002, when an alternative statutory remedy under Section 17 of the Act is available.
Final Decision
The writ petition is dismissed. Rule discharged. No order as to costs. The petitioners are at liberty to approach the appropriate forum in accordance with law.
Law Points
- Writ jurisdiction not to be exercised when alternative statutory remedy available under Section 17 of SARFAESI Act
- 2002
- One Time Settlement Scheme not enforceable through writ petition after possession taken
- RBI Guidelines do not create a vested right to OTS
