The High Court of Calcutta, while allowing a petition challenging the action of the respondent bank whereby it almost completely debited the pension account of the petitioner account, held that the petitioner is justified in arguing that Section 31(g) of the SARFAESI Act clearly provides that any property not liable to attachment falls outside the purview of the SARFAESI Act.
Brief Facts:
The account number that finds a place in the sanction letter of the loan belongs to the son of the petitioner, who was the borrower. However, on the pretext of taking measures under Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for the alleged default of repayment of the loan by the son, the petitioner’s pension account was debited, almost to the full, by the respondent bank.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the Petitioner submitted that applying the principle of Section 60(1)(g) of the Code of Civil Procedure, 1908, read in conjunction with Section 31 of the SARFAESI Act, 2002, the pension of a person cannot be the subject matter of attachment/deduction.
Contentions of the Respondent:
The learned counsel appearing on behalf of the Respondent submitted that due to the availability of equally efficacious alternative remedy in the form of a challenge under Section 17 of the SARFAESI Act itself since the action taken by the bank is a measure under Section 13 of the SARFAESI Act, this Court ought to hold its hands in interfering under Article 226 of the Constitution of India. He also argued that the impugned action of deduction of the amounts in question is not tantamount to attachment as contemplated in Section 60 of the Code of Civil Procedure read with Section 31 of the SARFAESI Act.
Observations of the court:
The court noted that the petitioner is justified in arguing that Section 31(g) of the SARFAESI Act clearly provides that any property not liable to attachment falls outside the purview of the SARFAESI Act. Hence, the argument of the availability of alternative remedy is defeated, as the action taken by the bank cannot count as one under Section 13 of the SARFAESI Act at all.
The court observed that the issue at hand is whether in view of the specific provision in Section 31 (g), a pension account can at all come within the purview of the SARFAESI Act itself; consequentially, the deduction from the pension account of the petitioner/guarantor can be labeled as a measure taken under Section 13 of the SARFAESI Act. The Court said that the definitive answer would have to be a resounding “No”. Since the principle of Section 60 of the Code of Civil Procedure has been incorporated in and kept outside the SARFAESI Act by virtue of Section 31(g) of the latter statute, the defense of the bank that the provisions of Section 60 of the Code of Civil Procedure are not applicable cannot also be tenable in the eye of law.
The decision of the Court:
The Calcutta High Court, allowing the petition, held that the impugned action of the respondent bank in deducting virtually the entire amount lying in the pension account of the petitioner is without jurisdiction.
Case Title: Kashi Chandra Shaw v. UCO Bank & Anr.
Coram: Hon’ble Mr. Justice Sabyasachi Bhattacharyya
Case No.: WPA No. 7639 of 2024
Advocate for the Petitioner: Mr. Rahul Karmakar
Advocate for the Respondent: Mr. Samriddha Sen
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