Page 22 - Banking Finance October 2019

LEGAL UPDATE

Muslim women's body Banks have no lien over deposit by debtor to show
bonafides for loan settlement: SC
seeks muslim civil law
The Supreme Court has said a deposit made by a debtor to show his bonafides
A Mumbai-based Muslim women’s
in a case of loan settlement cannot
body has urged the government to be considered a secured asset under
bring in a Muslim family law to “up-
the SARFAESI Act and has to be re-
hold gender justice and gender
funded.
equality” for women in the commu-
nity and also take measures to ef- “The deposit was not towards satis-
fectively implement the law that faction of the debt in question, and
made triple talaq a criminal offence. that is precisely why the High Court
had directed that the deposit would
The Bhartiya Muslim Mahila be treated (as) a deposit in the Reg-
Andolan (BMMA), which made the istry of the High Court,” the SC said in Kut Energy Pvt Ltd versus PNB.
demand, was one of the co-petition-
Referring to an earlier ruling in the case of Axis Bank, the SC noted that a se-
ers with Shayara Bano against triple
cured creditor would be entitled to proceed only against the secured assets
talaq in the Supreme Court, which
mentioned in the notice under Sec 13(2) of the SARFAESI Act, 2002.
in 2017 declared the practice un-
constitutional. In a letter sent to “In the instant case also, the money was expressly to be treated to be with the
Union law and justice minister Ravi Registry of the High Court,” said the bench comprising justices UU Lalit and
Shankar Prasad last week, the Vineet Saran, and directed that ?40 crore deposited by the appellants be re-
women's organisation said even as funded. It was hearing an appeal against an order passed by the High Court of
the campaign against the abolition Himachal Pradesh in Shimla in March this year. In 2008, Kut Energy, along with
of triple talaq was successful with others, entered into an agreement to set up a 24 MW Kut Hydro Electric Project
the passage of the Muslim Women in Shimla. It took a loan from a consortium of banks, including Punjab National
(Protection of Rights on Marriage) Bank (PNB), Corporation Bank, and Central Bank of India.
Bill, issues such as polygamy, halala The account was declared NPA in September 2015, and a demand notice for
and age of marriage still remained Rs. 106.07 crore was issued by PNB in March 2017 under Sec 13(2) of the
“unsolved”. SARFAESI Act. Three proposals for one-time settlement were made by the ap-
pellants. In August 2017, the bank issued a possession notice for the project,
"We believe that the Parliament of
and then issued a sale notice for e-auction with a reserve price of Rs. 120 crore.
India must pass a Muslim family law
to uphold gender justice and gender The appellant then sought interim relief from the Debt Recovery Tribunal,
equality for Muslim women," said Chandigarh, which was rejected. It then revised its offer for OTS to Rs. 140 crore,
the letter. As much as 91.7% and filed a civil writ petition in the High Court. They submitted during the hear-
women who had responded to a ing in October 2017 that to establish their bonafides, they were willing to de-
BMMA survey had spoken out posit Rs. 140 crore with the bank.
against polygamy, and 72.9% had The HC said the deposit will be treated as a deposit in the Registry of the Court.
said polygamy should not be allowed The appellant then deposited Rs. 40 crore, but the bank rejected the revised
with or without consent from the proposal for OTS.
first wife, the organisation’s founder,
In May 2018, PNB filed a writ petition for appropriation of Rs. 40 crore, while
Zakia Soman, wrote in the letter.
the appellants filed a writ for refund of the money. These applications were dis-
The survey, she said, covered posed off by the High Court, which noted that the “prayer made by the bank
Maharashtra, Gujarat, West Ben- deserves to be accepted in part to the extent that let the amount of Rs. 40
gal, Karnataka, Bihar, Tamil Nadu, crore lying deposited with the bank without any lien be deposited with DRT”. It
Madhya Pradesh, Rajasthan, also directed the DRT to keep it in a nationalised bank to fetch maximum rate
Jharkhand and Odisha. of interest.

22 | 2019 | OCTOBER | BANKING FINANCE