The petitioners filed for a civil writ petition for asking the courts to quash the order which was issued by the district magistrate: High court of Punjab & Haryana at Chandigarh
An order was given by the district magistrate to direct the policed for taking over the possession of the mortgaged properties by the petitioners. This judgment and final order were given in the high court of Punjab and Haryana at Chandigarh on 05/07/2021 by the Hon’ble Mr. Justice Jaswant Singh and Hon’ble Mr. Justice Sant Parkash in the case of Gyan Education society, Rohtak, and another versus Punjab national bank, new Delhi and others in a civil writ petition No.4531 of 2021 (O&M).
The following are the facts of the case, the petitioner, an established running school of secondary level situated in the village of Bhalot in the district of Rohtak know a Gyan Education society. They had raised two loans, the first loan Gyan education society raised was a term loan which is a loan from a bank for a specific amount that has a specified repayment schedule and either a fixed or floating rate of interest (not constant). And the second loan they raised was an overdraft facility, “(which is a financial facility or instrument that enables you to withdraw money from your bank account (savings or current), even if you do not have any account balance. Like any other credit facility, the bank levies an interest rate when you avail the overdraft facility.)” They raised it for Rs.5 crores in 2016 from the Punjab national bank in the Rohtak branch. However, Punjab national bank declared the loan account as NPA (non-performing asset) which refers to a classification of loans or advances that are in default or in arrears. This declaration was made because the society was unable to meet the financial discipline.
According to the case Under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 A notice was issued which was dated 2nd April 2019 seeking clearance of the outstanding dues of Rs. 4.10 crores also on 03/05/2019 another notice was issued under section 13(4) of the SARFAESI Act which was seeking for a symbolic possession. The district magistrate Rohtak gave an order on 03/06/2019 to direct the police for claiming and taking over the physical possession of the mortgaged properties which were offered as collateral security for the loans. The case further says that the respondents rejected a one-time settlement proposal made by the petitioners for a sum of Rs. 3.60 lakhs against the outstanding loan of Rs. 4 lakhs on 19/12/2020. Therefore, the petitioners filed for a civil writ petition for asking the courts to quash the order which was issued by the district magistrate.
The court held that “Concededly, as on today, the amount of outstanding loan is around ` 5.50 crores against a realizable value of around ` 8.50 crores (approximately) of the three mortgaged properties. It is also an admitted fact that property No. 1, which houses the school and is stated to be worth above ` 6 crores, could not be auctioned on two attempts by the Bank for want of any bidders.” During the court proceedings, the court held that “learned counsel for the petitioners submitted that his clients are in negotiation with the Bank for an amicable settlement, subject to the petitioners withdrawing the present writ petition, therefore, prays for permission to withdraw the present writ petition.”