The Madras High Court has quashed a plea challenging a loan recovery proceeding for recovery of bank loan. The loan was obtained for building the houses in Kanyakumari district under the Rajiv Gandhi rehabilitation package for Tsunami-affected and habituation areas. The district collector has given contract to S Vallinayangam herein the petitioner has obtained loan from Union Bank of India, Vadasery Branch, Nagercoil by mortgaging his property.
Due to the failure on the part of the contactor to fulfill the contract, the district collector has cancelled the contract and in the time being the Bank also moved an application demanding the recovery of the loan. Being multiple applications send by bank for recovery of loan, the bank approached Debt Recovery Tribunal, Madurai in 2012. Meanwhile the district collector ordered to take possession of the property; challenging the said order dated 20 November 2012 filed a petition in the High Court whereby the court has dismissed the petition. The bank declared the loan account of the contractor as non-performing asset and was taken possession of the property in respect to the loan provided as collateral on 18th February.
A petition was filed challenging the orders of the district collector and the recovery of the property by the authorized officer of the bank before the divisional bench of the High Court comprising of Justice G Chockalingama and Justice S Manikumar, order dismissing the petition was passed. Declaring the actions of the District Collector as valid in consistent with the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 whereby the collector ordered to take possession of the property by the tehsildar and handover the same to the authorized officer of the bank. High Court stated, the petitioner has not approached the appropriate forum and the seeking court’s intervention after handing over the possession at this stage cannot be done.