IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 19TH AUGUST 2011 / 28TH SRAVANA 1933 WP(C).No. 17340 of 2011(N) -------------------------- PETITIONER(S): --------------- 1. CITI SHOPPE PVT. LTD., 2ND FLOOR, HI-POWER COMPLEX, P.B.NO.66, CHAVAKKAD, REP. BY ITS MANAGING DIRECTOR, R.V.HIMAMUDHEEN. 2. R.V.HIMAMUDHEEN, AGED 54 YEARS, S/O.RAMJU SAIT, RAYAMARAKKARU VEETIL, MANATHALA, CHAVAKKAD, THRISSUR. BY SENIOR ADV. SRI.KURIAN GEORGE KANNANTHANAM, ADV. SRI.ZAKEER HUSSAIN RESPONDENT(S): --------------- 1. UCO BANK (A GOVT. OF INDIA UNDER TAKING) M.G.ROAD, RAVIPURAM BRANCH, ERNAKULAM, REP. BY ITS CHIEF MANAGER, PIN-682036. 2. ASSET MANAGEMENT BRANCH, UCO BANK, UCO BANK BUILDING, FOURTH FLOOR, THAMBU CHETTY STREET, CHENNAI-600001. 3. SME ASSET RECONSTRUCTION CO. LTD., MSE DEVELOPMENT CENTER, PLOT NO.C-11, G BLOCK, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051. BY ADV. SRI.ANIL KUMAR SREEDHARAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 17340 of 2011(N) APPENDIX PETITIONERS' EXHIBITS: P1. COPY OF THE DEMAND NOTICE DATED 11.11.2008. P2. COPY OF THE SALE NOTICE DATED 6.1.2009. P3. COPY OF THE STAY ORDER DATED 5.3.2009 IN I.A. NO.393 OF 2009 OF DRT, ERNAKULAM. P4. COPY OF THE COUNTER FOIL DATED 30.3.09 WITH COVERING LETTER. P5. COPY OF THE REPRESENTATION DATED 17.3.2010. P6. COPY OF THE REPLY DATED 18.3.2010. P7. COPY OF THE REPRESENTATION DATED 18.3.2011. P8. COPY OF THE NOTICE DATED 10.6.2011. RESPONDENTS' EXHIBITS: R1 (a) COPY OF THE REPLY ISSUED BY THE 2ND PETITIONER DATED 28.1.2008. R1 (b) COPY OF THE COMMUNICATION ISSUED BY 2ND PETITIONER DATED 26.2.2008. R1 (c) COPY OF THE COMMUNICATION ISSUED BY 2ND PETITIONER DATED 29.5.08. R1 (d) COPY OF THE COMMUNICATION ISSUED BY 2ND PETITIONER DATED 19.8.08. R3 (a) COPY OF THE CERTIFICATE OF REGISTRATION ISSUED BY RBI. R3 (b) COPY OF ASSIGNMENT OF DEBTS AGREEMENT DATED 1.6.2011. R3 (c) COPY OF THE LETTER DATED 14.7.2011. //TRUE COPY// P.A. TO JUDGE shg/ S. SIRI JAGAN, J. - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No.17340 of 2011 - - - - - - - - - - - - - - - - - - - - - - - Dated this the 19th day of August, 2011 J U D G M E N T The petitioners are defaulters in repayment of loan amounts taken from the respondents 1 & 2. The petitioners approached the Debts Recovery Tribunal in a Securitisation Application and obtained Ext.P3 order of stay restraining the respondents 1 & 2 from proceeding with the auction sale slated on 06.03.2009 at 2.30 p.m. on certain conditions imposed in that order. In the meanwhile, the petitioners were served with Ext.P8 communication by the 2nd respondent stating that the bank has sold the NPA Account (financial asset) standing in the name of the 1st petitioner to the 3rd respondent. The petitioners have filed this writ petition challenging Ext.P8 order on the ground that the same is in violation of Ext.P3 order of the Debts Recovery Tribunal, Ernakulam in I.A. No.393/2009 in S.A. No.108/2009. The counsel for the petitioners submits that, in view of the categoric statements in paragraphs 5 & 7 of the counter affidavit of the 3rd respondent, the writ W.P.(C)No.17340 of 2011 -2- petition may be closed recording the said statements. In paragraphs 5 & 7 of the statement, the 3rd respondent states thus: “5. An obstinate provision has been made under Section 5 (1) (b) of the SARFAESI Act, contemplating that a securitization company may acquire financial assets of any Bank/FIs by entering into an agreement with them for transfer of such financial assets to the securitization company on such terms and conditions as may be agreed between the parties. The 3rd respondent as per the said provision entered into an Assignment of Debts Agreement with the 2nd respondent on 1.6.2011 to acquire the NPA involved in this case. The copy of such agreement dated 1.6.2011 is produced herewith and marked as Exhibit R3 (b). As per Exhibit R3 (b) this respondent has acquired five NPAs maintained with UCO Bank, including the petitioners. Such an acquisition of financial asset is valid as per Section 5 (4) of the Act not withstanding the fact that any order, suit, appeal or any proceedings are pending in any court of law. The net result of such acquisition is that this respondent takes over the postilion of the secured creditor in the pending suit, appeal or any proceedings and the proceedings will be continued further by this respondent. 7. Without prejudice to the right of this respondent to recover the dues, inter alia, by initiating /pursuing legal actions as may be deemed fit and proper for the recovery of dues, it is respectfully submitted that this respondent is ready for settlement if the petitioners come forward with worth while proposal. The respondent has already issued a letter to the petitioner in this regard. The copy of letter dated 14.7.2011 is produced herewith and marked as Exhibit R3 (c).” Accordingly the writ petition is closed recording the said statements. The parties would be free to negotiate for settlement. Sd/- S. SIRI JAGAN JUDGE //True copy// shg/ P.A. TO JUDGE