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2016 (4) TMI 875 - HC - Indian Laws


Issues Involved:
1. Validity of the possession notice under Section 13(2) of the SARFAESI Act, 2002.
2. Delay in filing the appeal before the Debt Recovery Tribunal (DRT).
3. Issuance of sale-cum-auction notice by the bank.
4. Suppression of material facts by the petitioner.
5. Jurisdiction and discretionary power of the High Court under Article 226 of the Constitution of India.

Detailed Analysis:

1. Validity of the Possession Notice under Section 13(2) of the SARFAESI Act, 2002:
The borrower was issued a notice on 18.04.2012 under Section 13(2) of the SARFAESI Act, 2002, demanding payment of Rs. 28,37,853.46, failing which possession was to be surrendered. The borrower challenged this notice by filing SA.SR.No.1326 of 2012 before the Debt Recovery Tribunal, Madurai, albeit with delay.

2. Delay in Filing the Appeal before the Debt Recovery Tribunal (DRT):
The petitioner contended that Lakshmi Vilas Bank Limited, Madurai, took time to file a counter. Despite the delay, the petitioner filed SA.SR.No.1326 of 2012 challenging the possession notice. The bank's counsel confirmed that the appeal was filed with a delay and was eventually dismissed for default on 04.12.2015.

3. Issuance of Sale-cum-Auction Notice by the Bank:
Subsequently, the bank issued a sale-cum-auction notice on 20.01.2016, proposing a tender-cum-auction on 02.03.2016. The petitioner sought to amend the original appeal to include this auction notice and filed I.A.No.318 of 2016 for amendment and I.A.No.319 of 2016 for a stay on the auction proceedings.

4. Suppression of Material Facts by the Petitioner:
The petitioner was aware of the dismissal of SA.SR.No.1326 of 2012 but failed to disclose this fact in the writ petition. The petitioner's counsel argued that the dismissal was known only when filing for amendment and stay. The court found that the petitioner had not disclosed the full facts and had suppressed the dismissal of the appeal, misleading the court to believe that the appeal was still pending.

5. Jurisdiction and Discretionary Power of the High Court under Article 226 of the Constitution of India:
The court referred to several judgments emphasizing that a party seeking equitable relief must approach the court with clean hands and disclose all material facts. The court cited:
- Arunima Baruah v. Union of India (2007 (6) SCC 120), where it was held that suppression of material facts can disentitle a party from obtaining discretionary relief.
- Prestige Lights Ltd. v. State Bank of India (2007 (8) SCC 449), which reinforced that suppression of material facts can lead to dismissal of a writ petition without entering into the merits.
- Udyami Evam Khadi Gramodyog Welfare Sanstha v. State of Uttar Pradesh (2008 (1) SCC 560), which stated that repeated filing of writ petitions amounts to abuse of the process of law.

Given the suppression of material facts and the attempt to mislead the court, the High Court declined to extend equitable relief under Article 226 of the Constitution of India and dismissed the writ petition. The court noted that the petitioner could still approach the Tribunal for appropriate remedies under the law. Consequently, the connected miscellaneous petition was also dismissed.

 

 

 

 

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