/» ^ ^^^ IN THE HM>M COtmTOF 0 tATTK6iW4 8&ASWR WMT PETTnON faNo. 5>56Lf Of Z009 PFTITCONERS : 1. Vinod Singh S/0 Late Shri Basant Siiigh, aged about 44 years. .»" (^^t..'f ^^f'' .-••:AyvJy' w /-•^' 7 >^>* J» •C»" :f ^.^•' ^ 2. Smt. 5ur9avati Singh, aged about 42yeQFS.«);o v^oJ)s^ C^ Both are R/0 Hfrte. 6, Atenas Srih Nirtnan Sanitt, tfiota, Kasys; &istrict- Raipur, (C.6.) VBtSUS RESPON&ENTS 1. State Ekink of India, through Regionat Man^er, Raigcrh, Dis-trict- Raigarh, (C.6.) 2. State Bankof India, 8F<mch BaraRikekt, through Bronch Manager Baramkela. NiStrict- / Ra^grh, (C.6.) 3. AuthorizedOffteeTofpeeovery. StateBank of India, Rdipur, btstrict- RQipur. (C.€.) -»1 •Sa!3iS!SSiSS!S3SS!£ VNNI dO NOIi.fUIllSNOO 3WJ. ^O 9ZZ 3'OU.W tQQN^ NOI1UAT ^WA ^ ^" T""" mOH COURT OF CHHATTISGARH AT BILASPUR WRIT PETITION (0 N0. 2264 of 2009 PETITIONER RESPONDENTS Vinod Singh & Another. VERSUS State Bank oflndia & Ofhers. 1,1 il !^-J 1. Post for pronouncement ofthe order on 5(>Say ofNovember, 2010 Sd/- Satish K. Agnihotri Judge 1, i .A!C f'l.y' mGH_CQURTO£CmiM-TISGARHATBILASPUR WRIT PETITION (0 N0. 2264 of 2009 PETITIONERS RESPONDENTS Vinod Singh & Another. VERSUS State Bank oflndia & Ofhers. Sl WRITPETITION_UNDERARTICLE_226_CONSt!TUTIQN QF INDIA SB: Hon'ble Shri Satish K. Asnihotri. J. Present: Snit. IndiraTripathi, Advocate forthepetitioners. Shri Sudhir Agrawal, Advocate forthe respondents. JUDGMENT & ORDER (Delivered on 20th dayof Noyember,2010) '[<;;: Challenge in this petition is to the legality and validity ofthe demand notices dated 07.02.2009 (Aimexure P/l and P/2) issued by the respondent No. 2, letter dated 26.03.2009 (Annexure P/ll) issued by the respondent No. 2, whereunder the petitioners, being the borrower were directed to pay a sum ofRs. 19,83,117/-, interest atid other charges after repossession of the vehicle to pay up the costs of seizure and storage, and further, the notice invitmg tender for sale of the trailer (trucks)bearmgregistrationNo.CG-04/JB/6664andCG-04/DD/6664. The indisputable facts, in nutshell,are that the petitionerNo. 1 and 2 obtained a loan ofRs. 18,90,000/- each for purchase oftrailer (trueks) on equitable mortgage oftheir house with hypothecation ofthe vehicles, with fhe State Bank oflndia, Branch Barafflkela, District Raigarh.As per the agreement of loan-cum-hypothecation (Anriexure-7) dated 21.06.2008, fhe installment of payment was fixed at the rate •;»* ^ K"^ .^l Rs.36,001/- eacll dn monfUly hasis between the pefitioners and the respondent-Bankinrespecfofeachvehicle. Qne vehicle was registered in the name offirst petitioner andthe QtKer vehicle was registered ia the name of second petitioner. The first petitioner deposited a sum of Rs. 20,000/-, Rs. 2Q,000/- and^ Rs. 20,000/-,:totatRs.60,000/-on 01.10.2008 andRs.43,S20/-on 04.I1.20Q8, total Its. 1,23,820/-, similarly," the second petitioner deppsited asum ofRs.-60,000/-6n Ql.10.2008 andRs.65,000/-on 03.11.2008, tQtalfe.l,25,000/-,agamsttUeloarisanctionedfbreacU yehicle. FFherea&er, a demandnoticewas issued to bcrfh the petitioners on 07.02.2009 <Aanexure P/l and P/2) demanding a sum of Rs. 19,53,066 andSs.19,51,924/-, andthe defaultpaymentofinstallments^ to the tune OfRs. 2,84,644 and2,83,464/-,respectively. The petitioners also received letters dated 19.83.2009 (Annexure "P/5 and P/6) from (Ue respondent-Bank to the effect that the cheques issued by them fbr a^ sum of Rs. 2,54,t86/- and Rs. 2,54»r86/- respecfively, had been dis-honoured pn the ground Qf nori-ayailability of suflicient fund in fheir respeetive accounts; Accordingly, a ncrtice under sectifin 138 oftheNegotiableInstrumentsAct, 1881 (fcerefBff^er ye/ewed to as %&^rt/^7^wasissuedon 1^03.2009, mfbrmmgthepetitionersto deposit the afbresaid amount witNn a period of severi days. Thereafter, on 23,03.2009,the authorized reeovery pfEcers ofthe respondent-Bank were dirccted to seize the vehicles for non-payment of regtilar instalhnents (Aimexure P/7 and P/8) and fer recovery of the balance amountofRs. 18,83,l:l'7/-an(iRs;19,81,802/-respectiyeIywithinterest ^m thepetitioners. As a sequel^1)<^ tUe^y^ 26.03^009 (ArmexuieP/11),.thefirst getitioner wasi^ [• 1 :-1 Cft' i II! ]|; : :i 7: Sumo£Rs.l9,83yll7/-to5ayi^(Mstofseizureand^M vehide. No ^cument m respect ofofher vehicfe of has been filed. The respondent Bank, yide adveTtisement dated 04.04.2009 (AnnexureP/t5), iiwited tenders fbr sale of .both the vehicles;^'"^^.':•...::: -'" •.•;.:.': .,; . . • • •:' 1.' • •:1^''. . 1::" Smt. ladira TripatM, leam^ wc^dsubmitthatth&respondertt-BaDkdemandedtheoriginaIpapersof the bcmse vide lefter dated 03.1(1,2008. which eould not tie prQduGed as the same wasin pQssession of the IndiaaBanl^ Raipur, m c^ with KoUse loan. Tfausy fh& re^ extreme steg pf seizure of the vehicles. The petitionsrs were required to deposit the installments in 60 months.Thus, fixatiQn(Cifthe installmeht at the ratc oF Rs. 36,00l/-permontbwascontrary fo thfi agreenient. Snrt.'lTipahti, wouldfuTthersubnutthatthQughte paid the mstalhnfirits regularly, however, paymeiit of Rs. 1,23,820/- and Rs. 1,25,000/- respeetrvely, were made ;by ^the petitioneis. Only^ a meager sum ofRs. I^ w^cAwas sh^ be paid. Thus, th®.extremestep ofseizure ofthe y^^ and illegal. The bank has issued a nptice to the petitidners pn 19.03,2009 fordepositof an amoyntofRs. 2,54,186^- andRs, 2,54,l86/- each,withinap 03ofseyendaysbyt'theresRonderi^ withcmt waMirig for;c6i^lfition of? days, seized^^ dispute, on 24.03,2009. Thus, ffie entire actioa of Hie respoBdsnt-BanK waSunreasoriableandiUegal.T^evehiCfeflfRs.lSlacs^^ ;:suiri.M^.^2,20.420/-:only.^:;c.:.'..<;::::,:-^ On ffie Otherhan^Shri Sudhii Agrawal, leamed^ •^ respondent^ank,^wpul<i submjt that the^n _..:::.L.J ^/ 4 Bi^ ^.'.ft i 1«''; S.A (Anhexuref^an8P;®)underfheproyisio for malangpaymenfcffitheentireduesiM tHe^stallment^butthenoti'cewasissueA^ twg dishonaureS^equesibraiiamou^ ecmlft not Be .honaured <m aecoiurf bfaon-availability <^suf(icieiitifun(t m fhe bank acGQUntS^ of fhe petKio^ petitioners ttiat witU&ut vra extreme step of seizure of the vehieles was^^^^t^^ ::facts.' .';::,.•,:'. ^ ."•...:. ' : ';: ••• •/';.:' ;.1 " :' .' Shri Agra al,<w6uld .further suBmlt that^even ff the petitiohers waulA llave paid the aittoimt o£cheque;wU syfHeienf amciunt m their aceQunts^tBat"^ posifipn ofnon^aymentofthercgularmstaltttients.^^^^^^ fhe agreenient (Aimexure-^illiat 36 installments ofRis. 36,OW was fbced i.e. fer three years and fmlure to pay ev^ wouldleatltd^EepossessiQBQfihevehieles.T^petit^ infbtaimtiQn^^thej!etitioners^& t^ oftheremainingamyunt^efiarebotBthey^ arid Itoereaf^ sold io^ a flurd'pa^ impleaded;eveafhepurc^ser®£^ ^epetigQneKliavech^enged^u catioi^<5£lhe^^ ^ pyrchase^of^tKe ^liS^; % deserves^to^e;3isrmssed.l''v'.-.^.-.:,':'' ;'/^ !-: 1: .::..';^;;';: 1.'.;11: ' Having heard^eamed CDufirel appearing'for the parties, perused tHe pleadings and^euifienfsappfindedtKere^ the loan-eum-lryp^ecatiQn^agl-^^ ihepGlM0oei&fw^e^}is^^p^inst^Smen& .7 w n'~ ^" 1311!: 11. fbr36monthsi^.threeyears.J^petitionersfaUedtom themstallmeB(sright&omdayone,rafherfbrthefir^^ ofOctober,asumofRs.60,000/-wasdeposited and a total sum ofRs. 1,23,820^ and Rs .1,25,000/- as agamst the saiictioned loan^^^ 18,90,OQO/-, vras deposited iii November, 2008 by- the respecfive petitioners. Ilte impugned'notices dated 72.2 P/2) were issued;^befQFe that, the petitioners have not shbwn ehdeavolu'on^iheirpartorattemptedtopayregular^ffl^ mon&w{~!fove^^,WOS, • : ; 10. So ffir as tUeconteritiDn of the petitioners tliat pursuant t6 the notice dated 19.03.2009, therespoadent-Bankought to have waited for a period pf sevendays, the same doesnptdeseryes acceptance as the said nc^es were issued forpayment ofasum ofRs. 2,54,l86/- by each 6f the petitioners as the chequeslOT the said anm were not honoured and as sueh, said noticeswere issued imder sectioh 138 Qf theAc, 1881. TUenoti(;eundertheprQvisionsofsectipB 138^^ 1881 mvolve3difiei^cause;ofactipn,whichis^^^^^ underotherfbrum.'rhus.havingregardtothefactssituafionof'thecase, wheremfhepetitiQnershavefailedtoestablishthMtheywe regute making paymentofthemstallmentsandafterNc^ havetakenanystepformakmgpaymentofth&^ held that the action offflerespdndent-BaakwasilIegaI oriiTegular. II. Clause 10 of tfae toan-eum-hypQtUecation agreement dated 2L06.20C8, reads'aswider: . : i.. • ,..: ::.- :. '11. : ' ;• . ..; ' : 1,^; •1'' ' :1: ''JO^ ^T7ie^Bon'ai^(s) .hereljy<agrees tfiat^ , nalwithsfartding ariytfimgccmt^ m'aiy^othef'^cniments,?the^^fWe^.^ ' then due.'under'fM^aid'^itifies shall^if;^ , . :i&cA^ ^ %e..5^^fie(w ; , K aa^a)^/e ^OK^^'/ia^^i^o^H^ (^^e^^ ^//Qw^iCTe^a?^^e.Ban^^/ia/?6e^n(trierf to enft>ree its secifrity: ^ . ; ' a. Any mstcSlmenf'fff ^^^^ or mterest remammg^Mnpmdand^m arrewsfor aperiod af •'Siw monlk <^w -tl^ Semanded m'wot; .' —• , b. •3^ ^rrawer^ commifting:)any breach or (Sfe/B^iOTi^,ye7^rma e^^^^^^ ^anyfofthe1ermsrc0ntdmeSherewar in the Barrewer(s)'s proposcd or dwy other tlacuments; .' ;/' -" ;'.:.:: • :. : '.;. c. ~^a^,oif,<fewpyesen^?iOTO;or^e atocuniente. furnishedbytheBorrmvw(s)intts application 'arefozcnd'to 6e witrue wfcdsew:mcmrect; d, Upon enfering into any arrangemerit or eompositiori -with its creditors w conmwttmg anyaelofinsolyency; e. Any execution or dther siwtilar process being leviedor enfin'eedagainsttheborrawef'; ^;^aBOi^rKma(feora^e^/M^«,^serfjfcy the 'winding up or a'petUion of'winSing.vp is ftled or notiee of meetmg to pass such d resoluiion is'issiied.; f. A recet\^ bemgappointe^^brallorc^ aftheborrower'spKOperty . g. ff'theibcirrowericeases to carry onbusmeSs or thi'eatens notto cari'yan^usiness; h. Ifcmy circumstances shall occur'which in the cpwiwn ^ ^ &nfe w j'^wrffeia/ to w imperUs^or is likstyfoprejttdiCeorvnperilthe secwity or -which qffects adversely the Bovrewer(s)'s eapacity tq repay any ampunts tmderthe saiti,/heilities; [ ' . ' . ' i. ' If^the ^BorrOwerf^ ^es^ reqvired statements^or^mistctilises/diverts the •.mow^.or^^a%^^efewi^ou?fte^% prwrpermission/knawledge. F efer ^ a^ (^ fe - aSow e^te^^^,^^ happened; or ^rtdt,- tfte decision^ the Bank, 5Aa//Ae'c(wcteive,^Bd/dMc/Z)»!y»2gowfAe Borro\ver(s}f '•'•••.'.^.^,-.'-..-',^ PROWDEDALWAYSTHAyfheBanKMay^ its c£seretion:reftam^om^rthwit 'ertfbr^ its rights'hereunder^mspite qfthe.happenmg iil il lllilll ^!^'^^ K^: ^ Iffl of.ccny of the abave events. and pravided further that any/cltlwe or deiay in exercismg Cmy'right, pcmer or priwilege hereunder or ^(^ S^rwCMrffy dociawente or any .Singfe W' parfial exercise cf such right, pawer, or '••-',, jwn't/e^ steff ^r w^air/CTfm^ {ir'echiSe^the'Bankany ftirther exercise af the sattie m^operate as a •wdiver or'exerCise qf mrK other.pt^er df' rig^^^^ rights ^gnd remeciies af the Barik are only cwmtlative mulnotexchtsive." , 12. On bare perusal of the above-stated agreement, it is clear that the petkioners agreed to the provisions 6f 10 (a) 6f the agreement that in faUure of mstalhnent for a period of ohe month.after fhe due date the Baiik was entitled to enfbrce its security by.taking possession of tfte hypothecated yehicles and other property. There is no dispute that the proyisions of clause 10 ofthe agreement was non-o6sfan?ee clayse and fhe same was applicable unconditionally oh breach of the conditions as enshrinedin 10(a) to 10 (i) ofthe agreement. 13. The petition deserves to be dismissed bn the ground on non-joiader of necessary parties also, as after sale of the said •vehicles third party ^interest faas teen created. The pefitkuiers have nat impleaded the purchasers asparty/respondents. 14.Evenundertheagreement,lhehcwseofthepetUionerswasrm}rtgaged^ The petitionsrs failed t6 deposif the title papers as the petitioners had adnuttedly taken housing loan on fhe said moTtgaged property. This cannot^e faeld as a.fair^iction on the part ofthe petitioners as they could not have takBn loan by mortgagmg the^^^^^p^ bank and thereaflBr loan'was taken on ftie same mortgage from bther llank, without disctosing^fhe faetthatthepropertywasalready^^^^ accaunt ofhousing loan obtamed^&om Indian Bank, Raipur. a KS: '^^^w^^^^^^ Ws:@^'g^K^^ 15. 16. F., «,.,..,...«<.»*..»•.«»«"'"»••»"• «-"'°""&i" andisherebydismissed. There shallbe no order asto cosl;s. Sd/- ^SatishK. Agnihotn Judge Gown 'AB. , .