IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No 18341 of 2008 Mrs Sanghmitra Singh, W/o Rajeev Ranjan Singh, resident of Director, Park Mount Public School, Mitra Mandal Colony, Saket Vihar, Anisabad P S : Phulwarisharif, Dist : Patna - 800 002 - Petitioner Versus 1 The United Bank of India, 11 Hemant Basu Sarani, Kolkata - 700 001 through the Managing Director 2 The General Manager -cum- Authorised Officer, United Bank of India, Bihar Regional Office, Abhay Bhawan, 02nd Floor, Fraser Road, Patna - 800 001 3 The Branch Manager, United Bank of India, Patna Branch, Station Road, Patna - 800 001 - Respondents ----------- 2 05.01.2009 The petitioner had taken a term loan for constructing and establishing a school from the United Bank of India, Station Road Branch, Patna. The loan had to be repaid in quarterly capital installments of Rs 4.15 lacs with interest. It appears that for the months of December 2007, March 2008, June 2008 and September 2008, the installments falling due, were not paid. Petitioner was, thus, a defaulter for almost a year. Petitioner allegedly evaded notice under Section 13 (2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Bank allegedly pasted the notice on the gate of the school compound. This was allegedly not responded and, as such, action under Section 13 (4) of the SARFAESI Act has been initiated. This is what has brought the petitioner to this Court. On receipt of notice under Section 13 (4) of the SARFAESI Act, petitioner deposited money and filed a representation. Petitioner submits that she is ready to make good the defaulted installments. She submits that the default accrued because there was delay in getting affiliation from the Central Board of 2 Secondary Education because of which admissions of students got delayed. For a school, the revenue is through admissions. This caused the default. Default was, thus, not voluntary but forced upon by circumstances beyond petitioner’s control. On behalf of respondent-Bank, Mr Ajay Kumar Sinha submits that petitioner evaded notice under Section 13 (2) of the SARFAESI Act and, as such, Bank was left with no option but to notify action in terms of Section 13 (4) of the SARFAESI Act. Shri Sinha has very fairly placed before the Court the letter of the Bank dated 19th December, 2008 in response to the petitioner’s representation dated 13.12.2008 (Annexure-4). The Bank has clearly stated in the said letter dated 19th December, 2008 that the petitioner was directed to pay the arrear amount and the quarterly installment of December 2008 and regularize the payment of quarterly installments if she does not want the action to continue. In my view, this stand of the Bank is just and fair. The default in payment of installments is not in dispute. Five installments have been defaulted and as calculated and shown in the letter dated 19.12.2008 itself, the total defaulted amount is Rs 20.75 lacs with interest upto December 2008 of Rs 23.22 lacs after adjusting the amounts paid in between the total outstanding is Rs 39.87 lacs. Considering the equities, I direct that petitioner would maintain regular payment of quarterly installments of Rs 4.15 lacs as and when they fall due. So far as the balance outstanding defaulted installments with interest due is concerned, they would be liquidated by monthly payment of Rs 4 lacs in addition to the aforesaid quarterly 3 installments as per terms of sanction. It is hoped that in this manner, within a year, petitioner’s accounts would be fully regularized. In case of any default by the petitioner in complying with the aforesaid directions, the Bank would be free to proceed with Section 13 (4) of the SARFAESI Act notice as issued but till such time, petitioner punctually adheres to the schedule aforesaid, no further action would be taken by the Bank in terms of the SARFAESI Act. This is in addition to current accrued interest which the petitioner may be required to pay. Let a copy of Bank’s letter dated 19th December, 2008 be kept on record. This disposes of not only the interlocutory application but the writ application itself. Let a copy of this order be given to the learned counsel for the Bank. M.E.H./ (Navaniti Prasad Singh)