JUDGMENT
K.S. Radhakrishnan, J.
1. Whether Bank can call in aid the provisions of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “Securitisation Act”) against a borrower at a time when the question of liability of the borrower to the Bank and the question relating to the correct amount payable, are pending consideration before the Civil Court between the parties, is the question that has been posed in these cases.
2. Writ Petitioner was served with notice dated 10.2.2004 by the Punjab National Bank Under Section 13(4) of the Securitisation Act calling upon him to pay the amount of Rs. 6,17,058/- towards the outstanding amount under the loan availed of by him in respect of M/s. M.S. Oils and Rs. 7,11,708/- towards the outstanding amount under the loan availed of by him in respect of M/s. S.B. Bricks, within a period of sixty days from the date of receipt of the notice; failing which it was informed that the secured assets would be proceeded with for realisation of the amounts due to the Bank.
3. Appellant – writ petitioner as the proprietor of M/s. S.B.Bricks had availed cash credit facility of Rs. 3,90,000/- from the erstwhile Nedungadi Bank which was later amalgamated with Punjab National Bank on 1.2.2003. Appellant had filed O.S. No. 572 of 2002 before the Munsiff’s Court, Kollam for settlement of accounts contending that he is liable to pay Rs. 76,631/-. Bank has filed O.S.No. 45 of 2003 before the Sub Court, Kollam for recovery of the amount of Rs. 5,08,882/- with interest. There was an order of attachment in O.S. No. 45 of 2003. Both the suits are pending. Appellant, who is the proprietor of M/s.M.S.Qils has also availed of loan of Rs. 5,00,000/- from the erstwhile Nedungadi Bank for settlement of accounts and for refund of Rs. 32,343/-. Nedungadi Bank had also filed suit O.S.No. 47 of 2003 before the Sub Court, Kollam for recovery of
Rs. 5,72,530/- with future interest.
4. Senior Counsel Sri.T.P. Kelu Nambiar appearing for the appellant submitted that since suits have already been instituted by the Bank and also by the appellant, provisions of Section 13(2) cannot be imported. Learned counsel made considerable stress on the words “without the intervention of the Court or Tribunal”. Counsel submitted that since the matter is already seized before the Civil Courts properties are custodia legis and the Bank is not justified in invoking the provisions of the Securitisation Act. Counsel submitted that though such a contention was urged before the learned Single Judge the same was not adverted to.
5. Counsel appearing for the respondent Bank Sri. K.P. Sudheer took us through the various provisions of the Securitisation Act and submitted that the suits pending before the Civil Court is not a bar in invoking the provisions of Section 13 of the Securitisation Act. Placing reliance on Section 37 of the Securitisation Act, counsel submitted that the provisions of the Act shall have the effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having the effect by virtue of any such law. Counsel also referred to Section 34, which states that no Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debt Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Counsel also made reference to the decision of the Apex Court in Mardia Chemicals Ltd. v. Union of India, 2004 (2) KLT 273 (SC) = 2004 (4)’SCC 311.
6. The scope and ambit of the Securitisation Act has been elaborately considered by the Apex Court in the above decision and held that in view of Section 13( 1) of the Act the creditor is empowered to enforce the security himself without intervention of the Court. Senior Counsel contended that since the Court has already intervened, the Bank is not justified in invoking Section 13(1) of the Act. We are of the view, this contention cannot be accepted. Such an interpretation cannot be given to Section 13(1) of the Act. Section 13(1) of the Act confers power on the creditor for enforcement of security interest without the intervention of the Court or Tribunal. No where it is stated in the statute that once the jurisdiction of the Civil Court has been involved the provisions of the Securitisation Act would not apply. Before the coming into force of the Securitisation Act, the remedy open to the Bank was to approach the Civil Court or Debt Recovery Tribunal, as the case may be. The expression “without the intervention of the Court or the Tribunal” was used to show that the option is on the Bank to move the Civil Court or the Tribunal under the Act, but there is no bar under the statute that having approached the Civil Court Section 13(1) of the Act be not invoked.
7. We may in this connection refer to the decision of the Division Bench of this Court in Surendranathan v. Kerala Financial Corporation, 1988 (2) KLT 186. Validity of Sections 29 and 31 of the State Financial Corporations Act was challenged in this case as violative of Article 14 of the Constitution of India on the ground that it gives unguided and uncanalised power to take possession of the property of defaulter and that it can pick and choose any of the three remedies available under the Act. The Division Bench opined as follows:
“It is not the law that there can be only one remedy available for recovery of loans, advances, etc. from defaulters, namely, recourse through the ordinary Courts of land. Any statute may in appropriate cases provide for more than one remedy against the same defaulter for recovery of the dues or it may be that relief for recovery is provided in different enactments. Special remedies may be available in favour of or against particular classes of persons. When these two statutory remedies are available against the same defaulter, the power so conferred under the statute is not arbitrary where there are guidelines to control the discretion to be exercised. Thus guidelines need not necessarily be specifically, enumerated in the very section or provision conferring those powers. The guidelines can be gathered from the other provisions of the Act itself, preamble and the surrounding circumstances etc.”
The conditions to be satisfied before invoking Section 13 have been enumerated therein. Once those conditions are satisfied it is open to the Bank to take recourse to Section 13. Appellant has no case that jurisdictional pre-conditions enumerated in Section 13 have not been satisfied. The only contention raised is that since the Bank has taken recourse to Civil Court, Section 13 cannot be enforced. Unless there is specific bar in the statute it is always open to the Bank to enforce the claim Under Section 13. We may in this connection refer to Section 37 of the Securitisation Act, which reads as follows:
37. Application of other laws not barred. The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 1956 (1 of 1956) the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force.
Above mentioned provision would indicate that the provisions of the Act or the rules made thereunder shall be in addition to, and not in derogation of, the other laws. So the remedy provided under the Act is an additional remedy which is unless barred by the statute can be enforced at any point of time. This is being the legal position, we find no illegality in the Bank taking recourse to the provisions of the Securitisation Act, 2002 even though civil suits are pending concerning the subject matter. The question of law posed by the counsel is answered accordingly. In such circumstances, there is no merit in the appeals and they are accordingly dismissed.