Case BriefsHigh Courts

Jharkhand High Court: Rajesh Shankar, J. dismissed the petition on grounds of non-maintainability.

The facts of the case are such that the petitioner took a loan to the tune of Rs 4, 25,000 from the respondent bank namely Allahabad Bank. Due to default in payment of money, a notice was issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 [“SARFAESI Act”] to pay the outstanding amount of Rs 7, 89, 420 within 60 days from the date of the notice, failing which, the respondent-Bank will exercise the power conferred under Section 13(4) of the SARFAESI Act. There has been another notice dated 28-11-2019 issued for possession of her property by the Respondent Bank and cautioned the public in general to not deal with the property under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (“Rules, 2002”) by the respondent 2. Aggrieved by the same, instant petition in the nature of certiorari has been filed to quash both the notices.

Counsel for the petitioner Rajiv Nandan Prasad submitted that the petitioner is a disabled lady and also the owner of the property in question in one of the impugned notice, she took a loan and has already paid Rs 8, 00,000 inclusive of the interest but later a huge amount was spent on her treatment at Vellore and as such, she was not able to pay EMI of the said home loan due to which her loan account became irregular and was subsequently declared as N.P.A.

Counsel for the respondent P.A.S. Pati raised an objection on grounds of maintainability as an alternative remedy under Section 17 of the SARFAESI Act is available.

 ISSUE 1: Availability of Alternative Remedy

  The Court relied on the judgment titled United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 which held:

“The expression “any person” used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.”

 The Court also relied on the judgment titled Standard Chartered Bank v. Noble Kumar, (2013) 9 SCC 620 which held:

“The “appeal” under Section 17 is available to the borrower against any measure taken under Section 13(4).”

“We are of the opinion that by whatever manner the secured creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 17 is available.”

 ISSUE 2: Invoking Writ Jurisdiction in Matters relating to Realization of Loans

The Court relied on the judgment titled Authorized Officer, State Bank of Travancore v. Mathew K.C. (2018) 3 SCC 85 which held :

“Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same.”

Taking into account the provisions of the SARFAESI Act and judicial pronouncements, the Court held the petition to be non-maintainable directing liberty to the petitioner to take recourse before the appropriate forum.

In view of the above, petition stands dismissed. [Uma Pandey v. Allahabad Bank, 2020 SCC OnLine Jhar 819, decided on 18-06-2020]


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Case BriefsHigh Courts

Andhra Pradesh High Court: Battu Devanand, J., while addressing the instant matter, observed that,

The government is not supposed to spend public money as per their whims and fancies as public money is accrued from the payment of the taxpayers.

Discontinuation of Pensions

175 Petitioners filed the petition seeking direction declaring the action of respondents in discontinuing pensions to them as illegal, arbitrary, discriminatory and against the rules governing the distribution of pensions and direct all the respondents to distribute arrears of pension to the petitioners and continue to pay them thereafter.

Another petitioner consisting of 5 petitioners filed the petition against the respondent’s action to stop old aged/widow pensions.

Decision

The Government of Andhra Pradesh vide its order said that the Government of Andhra Pradesh is implementing various pension schemes as part of its welfare programmes for most needy and vulnerable people i.e., the persons in old age, widows, people with disabilities and weavers to provide them some succor.

Court stated that on perusal of the Government Order, it is clear that as part of welfare programmes the Government is implementing various social security pension schemes for the benefit of needy and vulnerable sections of the people to provide them some succor.

“…attempt of the government to implement these “Social security pension schemes” to provide the people belong to vulnerable sections to provide some succor is undoubtedly laudable.”

Bench emphasized the fact that the Government is the trustee of public money and is empowered to utilize the public money in a proper manner for the benefit of the public at large.

Supreme Court’s decision in Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489 was also referred, wherein the following was held:

“The discretion of the government has been held to be not unlimited in that the government cannot give or withhold largess in its arbitrary discretion or at its sweet will.”

Public Money

Further, the High Court also noted the fact that earlier crores of public money was spent on different activities in the State of Andhra Pradesh.

In view of the above Court stated that,

Did any person in the State ask the State Government to spend a thousand crores of rupees for organising “Godavari and Krishna Pushkaralu”? 

Did any Christian ask for “CHRISTMAS KANUKALU ?”

Did any Muslim request for “RAMJAN THOFA?”

At present, thousands of crores of rupees are being sent under various pogrammes stating that it is for the welfare of the people. 

One has to question himself whether the public money is being utilized properly as it seems to be.

Unreasonable to stop payment of meager amount

Hence, the Bench held that Court is of the opinion that while spending crores of rupees of public money for all the programmes as stated above, it is unreasonable to stop payment of meager amount being paid towards social security pension in favour of the petitioners.

Court to fortify its view cited the Supreme Court decision in, Raghunath Thakur v. State of Bihar, (1989) 1 SCC 229, wherein the following was held:

“…a person adversely affected by order has right of being heard and making representations against order, even though rules do not provide so expressly”.

Social Security

Concluding with its’ analysis, Court held that stopping payment of social security to the petitioners without conducting any enquiry or without issuing any notice is illegal, arbitrary, discriminatory and against the object of the social security pension scheme and against the principles of natural justice.

Two directions have been passed by the Bench in the above petitions:

  • Respondents are directed to make payment of pension to the petitioners from the month when it was stopped to till date within a period of 15 days.
  • Respondents are directed to continue the payment of the pension every month.

[Seepana Govindamma v. State of Andhra Pradesh, WP No. 21104 of 2019, decided on 08-09-2020]

Case BriefsHigh Courts

Rajasthan High Court: A Division Bench comprising of Pradeep Nandrajog, CJ. and G R Moolchandani, J., disposed of writ petitions against the misuse of public money for political agendas.

A PIL was filed to spouse a public cause claiming the misuse of public money by the respondent in order to cater their political motives during the Gaurav Yatra i.e direct contact with the voters by means of road-shows during which the Hon’ble Chief Minister would address public meetings for which tent, sound system and stage would be provided by the Public Works Department.

The respondents contended that whenever the Chief Minister travels (official/personal) protocol and security arrangements were to be borne by the State and thus it cannot be given the colour of expenditure incurred towards a political rally and additionally taking advantage of the presence of the Chief Minister, the respondent was organizing exhibitions to educate the general mass regarding social welfare schemes of the respondent.

Taking into consideration Common Cause v. Union of India, (2014) 6 SCC 552 and Common Cause v. Union of India, W.P (Civil) No.13 of 2003, order dated 13-05-2015 wherein it was held that, “Under the garb of communicating with the people, undue political advantage and mileage was sought to be achieved by personifying individuals and crediting them as being responsible for various Government achievements”; the High Court concluded by saying that, so intermingled are the State-sponsored d State-financed programmes with the Gaurav Yatra that it would be impossible to segregate one from the other. It is trite that the impact of an act was to be understood from the viewpoint of a mythical common man because to him if during the Gaurav Yatra, the Chief Minister inaugurates public functions, the understanding would be the glorification of the political party and not of the respondent.

It was declared by the Court that henceforth no public functions sponsored and financed by the state funds would be held during Gaurav Yatra. [Sawai Singh v. State of Rajasthan, 2018 SCC OnLine Raj 1746, order dated 05-09-2018]