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SCA/9945/2008 6/ 6 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 9945 of 2008
=========================================================
PAREKH
PLATINUM LIMITED - Petitioner(s)
Versus
INDUSTRIAL
FINANCE CORPORATION OF INDIA & 15 - Respondent(s)
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Appearance :
MR
RAHUL K PANDYA for Petitioner(s) : 1,
MR ANIP
A GANDHI for Respondent(s) : 1,
MR MAULIK G NANAVATI for
Respondent(s) : 1, 4,
None for Respondent(s) : 2,
SINGHI &
CO for Respondent(s) : 3,
NOTICE SERVED BY DS for Respondent(s) :
5, 7, 10, 12,15 - 16.
MR NR PARIKH for Respondent(s) : 6,
MR
DHARMESH V SHAH for Respondent(s) : 6,
MR CZ SANKHLA for
Respondent(s) : 8,
NOTICE SERVED for Respondent(s) : 9, 11,
MR
SS PANESAR for Respondent(s) : 9,
MR ASPI M KAPADIA for
Respondent(s) : 11,
DS AFF.NOT FILED (N) for Respondent(s) :
13,
MR MAULIK J SHELAT for Respondent(s) :
14,
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CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 20/10/2008
ORAL
ORDER
The
petitioners by this petition have challenged the action of the
respondent No.1 under Section 13(4) read with Section 14 of the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (‘the Act’ for short) and
the consequent notice dated 23.07.2008 issued by the respondent
No.2.
Heard
Mr.Kavina for Mr.Gandhi for the petitioners. Mr.Kamal Trivedi,
learned Counsel for Mr. Nanavati for respondents Nos. 1 & 4,
Mr.Singhi for respondent No.3, and Mr. Shelat for respondent No.4.
Upon
hearing the learned advocate appearing for both the sides, it
appears that it is an admitted position that the notice under
Section 13(2) of the Act was issued on 29.04.2003 and the present
action in furtherance thereto under Section 13(4) is in the year
2008 and there is a gap of about 5 years period for the action under
Section 13(2) and Section 13(4) of the Act. It is not the case of
the respondent secured creditor that the proceeding under Section
13(2) of the Act were stayed by any competent forum known to law
except that there was a talk of one time settlement or the pendency
of the proceedings before the BIFR etc.
Similar
issue came to be considered by this Court (Coram:D.A.Mehta, J.) in
Special Civil Application No. 13426 of 2007 in the case of Ghanshyam
Forms Pvt. Ltd. Vs. Bank of Baroda decided on 20.09.2007 and it was
observed by the Court from paras 2 to 4 as under:
2. The
undisputed facts are that a Notice under Section 13(2) of the
Securitisation Act came to be
issued on 20.06.2005. The petitioners tendered their reply thereto on
16.07.2005 as required by provisions of Section 13(3A) of the
Securitisation Act. On 28.07.2005, the respondent-Bank rejected the
objections as required by Section 13(3A) of the Act. Thereafter, it
appears the parties entered into prolonged correspondence on various
dates in relation to the recovery of the outstanding dues and the
various proposals for settlement mooted by the petitioners.
Ultimately, it appears that once again on 09.04.2007, the
respondent-Bank informed the petitioners that the objection /
representation of the petitioners were not acceptable and thereafter,
issued the impugned Notice dated Nil which was received by the
petitioners on 07.05.2007. The Notice called upon the petitioners
that in the event the petitioners failed to discharge their liability
possession of the secured assets shall be taken over on 29th
May, 2007. Thereupon the petitioners have approached this Court.
3. The
aforestated facts make it apparent that for a period of almost two
years after issuance of Notice under Section 13(2) of the
Securitisation Act and rejection of the objections / representation
under provision of Section 13(3A) of the Securitisation Act the
respondent-Bank did not take any steps pursuant to such rejection of
objections raised by the petitioners. The position in law is well
settled that any action wherein limitation is not provided has to be
initiated within reasonable period. Thus action under Section 13(4)
of the Act has to be initiated within a reasonable period from the
date of rejection of the objections / representation under Section
13(3A) of the Securitisation Act.
4. Thus,
the respondent-Bank cannot be permitted to take possession of the
secured assets on the basis of Notice dated 20.06.2005 issued under
Section 13(2) of the Securitisation Act. However, that by itself does
not mean that there is any prohibition in so far as respondent-Bank
is concerned to initiate fresh action in accordance with the
provisions of the Act and it is always open to the respondent-Bank to
undertake such an exercise by issuance of fresh Notice under Section
13(2) of the Securitisation Act, if the facts and circumstances so
warrant.
Ultimately,
the said petition was allowed.
As
the action under Section 13(2) of the Act is after a long period of
5 years, and in view of the above referred decision of this Court,
the present action would not survive, but at the same time, it would
be open to the lead secured creditor to initiate the action afresh
under Section 13(2) of the Act and thereafter to proceed in
accordance with law under the Securitisation Act.
Mr.Trivedi,
learned counsel appearing for Mr.Nanavati for the secured creditor
Bank voiced the grievance that if fresh action is taken under
Section 13(2) of the Act, the petitioners may transfer the mortgaged
property and it may create irreversible situation.
Mr.Kavina,
learned counsel appearing for the petitioners has not been able to
make any statement as to whether the petitioners are desirous to
transfer the property or otherwise.
Mr.Trivedi,
learned counsel appearing for the lead creditor Bank attempted to
submit that no further purpose would be served in initiating afresh
action under Section 13(2) of the Act since there is no change in
the circumstance and the respondent Bank is still holding the
consent of the creditors representing 75% and more over the secured
assets.
Whereas,
such aspect is not admitted by Mr.Kavina, learned counsel appearing
for the petitioners.
In
my view, as per the above referred decision of this Court, since
action is not taken within reasonable time, the notice under Section
13(2) of the Act, which is the basis of the action under Section
13(4) of the Act can be said as beyond reasonable period and a stale
action. Therefore, whether there is any change in the circumstance
or not would have mattered after the period from the period under
Section 13(2) of the Act.
In
the present case, the period is more than 5 years and therefore, I
find it proper not to take a different view than the view taken by
the coordinate bench of this Court, referred to hereinabove and
therefore, the attempt on the part of learned counsel for the
respondents cannot be countenanced.
Under
these circumstances, except for routine business purpose, period of
60 days from today, the petitioners shall not transfer or alienate
the property over which the security interest is created of the
respondent Bank.
Subject
to the aforesaid observations, the petition is disposed of with the
clarification that the action under Section 13(4) of the Act, shall
not survive.
(JAYANT PATEL, J.)
*bjoy
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