IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1355 OF 2009 (Arising out of S.L.P. (C) No.5906 of 2008)

Union Bank of India & Anr.        ...Appellant(s)

Versus

Panchanan Subudhi       ...Respondent(s)

O  R  D  E  R

Leave granted.

Heard learned counsel for the parties.

By the impugned order, the High Court disposed of the writ petition filed

by  the  respondent  herein  by  directing  them  to  pay  a  sum  of  Rs.10  lakhs  in

installments for liquidating the dues of the appellant bank.

A perusal of the record shows that the appellant-bank extended financial

facility to the respondent to an extent of Rs.10 lakhs.  The respondent deposited the

title  deeds  of  land  and  building  as  security.  On  31.12.2000,  the  account  of  the

respondent was declared as non-performing asset and O.A. No.70 of 2002 was filed

before  Debts  Recovery  Tribunal,  Cuttack (for  short,  `the  Tribunal').   During  the

pendency of the O.A., the appellant-bank issued notice dated 3.9.2004 under Section

13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002 (for short ‘the Act’). This was followed by notice dated

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4.12.2004 issued under Section 13(4) of the Act.  By an order dated 30.5.2005, the

Tribunal passed decree in favour of the appellant for a sum of Rs.16,10,957/- along

with pendent elite and future interest @ 12% per annum from the date of application.

The respondent challenged the proceedings initiated under the Act in Writ Petition

No.7435 of 2005. The High Court stayed the proceeding subject to the respondent

depositing  a  sum  of  Rs.10  lakhs,  which  the  latter  never  deposited.   In  the

interregnum, the respondent approached the bank for one time settlement.  The bank

agreed  for  settlement,  but  the  respondent  failed  to  abide  by  the  conditions  of

settlement.  Consequently, bank issued notice dated 12.2.2007 for possession of the

secured assets.  The respondent challenged the said action in W.P. No.2322 of 2007,

which has been disposed of by the High Court in the manner indicated hereinabove.

In  our  view,  the  approach  adopted  by  the  High  Court  was  clearly

erroneous.  When the respondent failed to abide by the terms of one time settlement,

there was no justification for the High Court to entertain the writ petition and that

too  by  ignoring  the  fact  that  a  statutory  alternative  remedy was  available  to  the

respondent under Section 17 of the Act.

Accordingly, the appeal is allowed and the impugned order is set aside and

writ petition filed by the respondent before the High Court is dismissed.    

...................J.  (B.N. Agrawal)

...................J.  (G.S. Singhvi)

New Delhi, March 2, 2009