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SCA/18688/2006 6/ 6 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 18688 of 2006
For
Approval and Signature:
HONOURABLE
MR.JUSTICE D.A.MEHTA
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
JAYANAND
K SHETTY - Petitioner
Versus
ANYONYNA
SAHAKARI COOPERATIVE BANK LTD, - Respondent
=========================================================
Appearance
:
MR
MANISH R BHATT for
Petitioner.
MR KM PARIKH for
Respondent.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
Date
: 03/09/2007
ORAL
JUDGMENT
1. RULE.
Considering the narrow scope of the controversy between the parties,
the petition is taken up for final hearing and disposal today. The
learned advocate for the respondent-Bank waives service of rule.
2. The
principal contention raised on behalf of the petitioner is that the
notices issued under Section 13(2) and Section 13(4) of the
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 (`the Securitisation Act’) are bad in
law. However, the learned advocate for the petitioner has
concentrated on challenging the action of the respondent-Bank under
the provisions of Section 13(4) of the Securitisation Act on the
ground that the objections dated 1st February, 2005 tendered by the
petitioner in response to the notice under Section 13(2) of the
Securitisation Act have not been dealt with by the respondent-Bank in
accordance with the requirement of Section 13(3-A) of the
Securitisation Act. Elaborating on the contention, it was submitted
that the provision requires dealing with the
representation/objections within a period of one week from the date
of receipt of such representation/objections, but, admittedly, the
respondent-Bank has not dealt with the same till 19th February, 2005.
He, therefore, urged that in the circumstances the action under
Section 13(4) of the Securitisation Act be declared to be bad in law.
3. The
learned advocate for the respondent-Bank stated, on verification of
the record, that the representation/objections dated 1st February,
2005 had been received by the respondent-Bank on 3rd February, 2005,
but, have, admittedly, been responded to only on 19th February, 2005.
However, he hastened to add that there was substantial compliance
with the provisions of Section 13(3-A) of the Securitisation Act and
Court must permit the respondent-Bank to proceed pursuant to notice
under Section 13(4) of the Securitisation Act without permitting the
petitioner to raise technical objections.
4. The
facts, as accepted by both the sides, are not controverted. The facts
go to show that compliance, if any, under Section 13(3-A) of the
Securitisation Act by the respondent-Bank is belated. This Court has
already, in the case of Pan Pipes Resplendents Ltd. v. Stressed
Assets Stabilization Fund vide judgment dated 14.06.2007 rendered
in Special Civil Application No. 4045 of 2007, dealt with the scheme
of the Act in the following words:
“Section
13(3A) of the Securitisation Act requires that the secured creditor
shall consider the representation or objections made by the borrower
on receipt of notice under sub-section (2) of Section 13 of the
Securitisation Act and in the event the secured creditor comes to the
conclusion that such representation or objection is not acceptable or
tenable the secured creditor shall communicate within one week of
receipt of such representation or objection the reasons for
non-acceptance of the representation or objection to the borrower.
Admittedly, in the present case, the objections were raised on
22.08.2006. Though exact date of receipt of the said objections by
the respondent-financial institution is not available on record it is
equally an admitted position that the said objections have been dealt
with only on 28.02.2007, namely, after filing of the petition.
Therefore, the respondent-financial institution has, while conveying
the non-acceptance of the representation or objection, gone beyond
the prescribed period of one week from the date of receipt of
representation or objection. In the circumstances, the action under
Section 13(4) of the Act initiated vide notice dated 03.02.2007 is
definitely in violation of the provisions of Section 13(3A) of the
Securitisation Act. The said notice, therefore, cannot be permitted
to operate and is hereby quashed and set aside”.
5. Applying
the aforesaid ratio to the facts available on record, the impugned
notice dated 22.08.2006 issued under Section 13(4) of the
Securitisation Act is hereby quashed and set aside.
6. An
incidental submission was made on behalf of the petitioner that the
petitioner has already approached the respondent-Bank with a proposal
of settlement and the same is under active consideration of the
respondent-Bank. The learned advocate for the respondent-Bank has
submitted that the petitioner has been informed by the
respondent-Bank to revise the offer and in case such upward revision
is made, the respondent-Bank shall consider the same in accordance
with law. It is not necessary for the Court to deal with the
aforesaid submission. Suffice it to state that it is always open to
the parties inter se to renegotiate the terms of the contract, and
the Court is not required to issue any direction in this regard.
7. In
the circumstances, the petition is allowed on the limited count.
Needless to state that in the event the respondent-Bank intends to
initiate any fresh action in accordance with law, it is always open
to the respondent-Bank, subject to right of the petitioner to
challenge any such proposed action in accordance with law. Rule made
absolute. There shall be no order as to costs.
[D.A.MEHTA,J.]
(patel)
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