MADURAI: The Madras High Court has dismissed a batch of writ petitions filed by loan defaulters seeking to restrain LIC Housing Finance from publishing their names in newspapers. Justice K. Chandru recalled that the High Court in K.J. Duraisamy Vs. Assistant General Manager, State Bank of India, (2003) had approved the action of banks in publishing the photographs of loan defaulters.
“It was held that increasingly persons taking loan from financial institutions are finding novel methods to defraud such institutions and hence, the lending institutions can also find new methods in making recoveries,” the Judge said.
Mr. Justice Chandru also dismissed another writ petition filed by a tenant who claimed that he could be evicted only under Tamil Nadu Buildings (Lease and Rent Control) Act and not under other laws for the default committed by his house owner.
The Judge said that financial institutions were entitled to take possession of assets from the borrower or any person under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act.
He recalled that dealing with a similar issue, a Division Bench of the High Court in Sree Lakshmi Products Vs. State Bank of India (2007) had held that any party aggrieved by such dispossession would have to approach the Debt Recovery Tribunal.
The Bench had further said that Section 13(3) of the SARFAESI Act operated as an attachment/injunction restraining the borrower from disposing of the secured assets and therefore, any tenancy created after such notice would be null and void.
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