Satyavol Venkat Rama Krishan Rao & Aors v. Union of India & Ors

order as to costs.

CHIEF JUSTICE

MANMOHAN, J SEPTEMBER 13, 2010 vk

* HIGH COURT OF DELHI AT NEW DELHI Judgment Reserved on : 10th July, 2010 % Judgment Pronounced on: 13th September, 2010 + WP(C) No.4653/2010 SATYAVOL VENKAT KRISHNA RAO & ORS. ..... Petitioners Through Mr. J.M. Bari with Ms. Shweta Bari, Advocates versus UNION OF INDIA & ORS. ..... Respondents Through Ms. Maneesha Dhir with Ms. Preeti Dalal and Mr. K.P.S. Kohli, Advs. for R-1. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN 1. Whether reporters of the local papers be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes DIPAK MISRA, CJ Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioners have prayed for declaration of the second proviso to Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the SARFAESI Act") as unconstitutional and further to issue a writ of certiorari to quash the order dated 28th June, 2010 passed by the Debts Recovery Appellate Tribunal, Delhi made in Inward No.293 of 2010. Quite apart from the above, a prayer has been made to recast the proviso to Section 18. 2. The facts which are essentially to be stated for adjudication of this petition are that the petitioner No.1 is the director of the petitioner No.3, M/s PRK Exports Private Limited and the proprietor of the petitioner No.4, M/s Premier Overseas. A loan was granted to the petitioner No.1 by the respondent No.2, the HDFC Bank, under the LAP scheme to the tune of Rs.25 lakhs for which he had mortgaged certain properties. 3. On 13th April, 2007, the respondent bank enhanced the loan granted after reviewing all the parameters of performance and timely repayment of the dues towards the loan from the earlier amount. On 22nd December, 2007, the bank accepted a request for fresh loan to the petitioner No.1 based upon the need of fund on account of business expansion. A security agreement was entered into on 1st January, 2008 between the petitioner No.1 and the respondent No.2 bank whereby an equitable mortgage was created in respect of secured asset by depositing the sale deed dated 14th October, 2005 of the secured asset. 4. Be it noted, various averments have been made about the marital status between the petitioner No.1 and his wife, the respondent No.3 and the litigations that were initiated against each other which, we are disposed to think, are totally irrelevant for the present petition. As set forth, the respondent No.2 issued a demand notice on 13th June, 2009 under Section 13(2) of the SARFAESI Act claiming a sum of Rs.38,35,972/- towards dues as on 8th June, 2009 in respect of the demand draft loan. The 3rd respondent obtained an ex parte order dated 6th July, 2009 from the Court of Metropolitan Magistrate (East), Karkardooma Courts, Shahdara under Section 23 of the Protection of Women from Domestic Violence Act, 2005 whereby the petitioner No.1 had been restrained from creating any third party interest in the secured asset. An application was moved by the respondent No.2 bank before the Additional Chief Metropolitan Magistrate (Special Acts) Central, Delhi under Section 14(2) of the SARFAESI Act for providing assistance to the bank to obtain possession of the secured asset in accordance with law. The receiver was appointed who was given a notice on 10th November, 2009 for taking possession of the secured asset. 5. As pleaded, the bank issued a demand notice on 13th November, 2009 under Section 13(2) of the SARFAESI Act claiming a sum of Rs.30,46,554.31 towards dues as on 8th June, 2009 in respect of the demand draft loan. It is urged that the said notice has not been received by the petitioners. The third respondent filed an application on 16th November, 2009 under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal-III, Delhi (DRT) which was registered as SA No.324 of 2009. The petitione