IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.02.2010 CORAM: THE HONOURABLE Mr. JUSTICE F.M.IBRAHIM KALIFULLA and THE HONOURABLE Mr. JUSTICE N.KIRUBAKARAN WRIT PETITION No.588 OF 2010 and M.P.Nos.1 and 2 of 2010 -----
M/s.Precision Fastenings
represented by its
Managing Partner
“Siddharti”
7, Natesan Colony,
Chennai 600 018. .. Petitioner.
/versus/
State Bank of Mysore,
T.Nagar Branch,
Chennai 600 017. .. Respondent.
Writ Petition filed under Article 226 of the Constitution of India praying for the issue of a writ of certiorarified mandamus to call for the records of the respondent pursuant to the notice dated 8.6.2009 under Section 13(2) of the Securitisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 and the possession notice issued on 23.11.2009 under Section 13(4), Rule 9 of the said Act, quash the same and direct the respondent to restore the possession.
For petitioner : Mr.K.Shahul Hameed
For respondent : Mr.J.Radhakrishnan.
(ORDER OF THE COURT WAS MADE BY F.M.IBRAHIM KALIFULLA,J.)
—–
The petitioner seeks for issuance of a writ of certiorarified mandamus to call for the records pursuant to the notice dated 8.6.2009 under Section 13(2) of the Securitisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act (in short “SARFAESI Act”) and the possession notice dated 23.11.2009 issued under Section 13(4) of the SARFAESI Act, quash the same and to direct the respondent to restore possession of the petitioner.
2. The petitioner in his supporting affidavit would contend that the petitioner approached the respondent/ Bank for credit facilities. On 7.1.1995, the credit facilities sanctioned by the respondent were cash credit limit for Rs.30 lakhs; over and above facility against the supply of bills for Rs.5 lakhs and Rs.5 lakhs towards Bank guarantee, apart from Rs.10 lakhs towards Letter of Credit to procure raw materials.
3. In respect of the action of the petitioner, there was a claim by the respondent before the Debts Recovery Tribunal-II, Chennai, in O.A.No.28 of 2008 for recovery of a sum of Rs.33,18,464/- with interest at 15% per annum from 23.04.2003 with quarterly rests till realisation with costs. The petitioner is stated to have filed a suit before this Court in C.S.No.791 of 2003 which was transferred to the Debts Recovery Tribunal-I, Chennai and thereafter, to the Debts Recovery Tribunal-II, Chennai, and renumbered as Counter Claim No.1 of 2009. There was a notice initially issued under Section 13(2) of the SARFAESI Act on 19.9.2003. The petitioner sent his objection to the said notice on 17.12.2003. The petitioner also filed a Writ Petition, W.P.No.46951 of 2002 which was dismissed by this Court on 29.4.2003 giving liberty to the respondent/ Bank to proceed with its claim. The respondent’s claim in O.A.No.28 of 2008 and the petitioner’s Counter Claim No.1 of 2009 were disposed of by a common order by the Debts Recovery Tribunal-II, Chennai, on 4.2.2009. The Debts Recovery Tribunal in its ultimate conclusion held that the respondent/Bank is entitled for recovery certificate to recover a sum of Rs.33,18,464/- with interest at 15% per annum with quarterly rests from 23.4.2003 till realisation apart from costs of the O.A. Such recovery was directed as against defendants 1 to 4 personally and by sale of mortgaged and hypothecated properties scheduled to the O.A. Necessary direction for issuance of Recovery Certificate was also ordered. It is in the above stated background, the petitioner has come forward with the writ petition with a prayer couched above.
4. Mr.K.Shahul Hameed, learned counsel appearing for the petitioner in his submissions contended that the respondent/ Bank having issued a notice under Section 13(2) of the SARFAESI Act earlier on 19.9.2003 to which the petitioner sent his objection on 17.12.2003, is not entitled in law to issue another notice under the same provision as has been now issued under the impugned notice dated 8.6.2009. According to the learned counsel for the petitioner by virtue of the petitioner’s objection dated 17.12.2003 it will have to be taken that the notice dated 19.9.2003 issued by the respondent stood closed and the respondent/ Bank is estopped from issuing any notice under the provisions of the SARFAESI Act. Learned counsel also contended that entertaining a fresh notice under Section 13(2) of the SARFAESI Act would otherwise, revive a time barred claim of the respondent which cannot be permitted. Learned counsel also contended that since the impugned notice issued under Section 13(2) of the SARFAESI Act dated 8.6.2009, is patently illegal and since the petitioner has no other remedy, the petitioner seeks to quash the said notice.
5. As against the above submissions, Mr.J.Radhakrishnan, learned counsel appearing for the respondent/Bank after bringing to our notice the substantive claims of respective parties which were considered by the Debts Recovery Tribunal-II, Chennai, in O.A.No.28 of 2008 and Counter Claim No.1 of 2009, contended that the claim of the respondent is not time barred, that there is no statutory prohibition for the respondent to invoke Section 13(2) of the SARFAESI Act and consequently the steps taken under Section 13(4) of SARFAESI Act, by relying upon the earlier notice dated 19.9.2003 was valid. Learned Standing Counsel appearing for the Bank also points out to us the prevaricating statement of the petitioner himself made in the affidavit in paragraph Nos.19,20,23 and 24 and contended that the petitioner has not approached this Court with clean hands and therefore, the writ petition should be dismissed by awarding exemplary costs.
6. Having heard learned counsel appearing for the respective parties as well as having perused the papers placed by the parties before us, we find force in the submissions of the learned counsel for the respondent. As rightly pointed out by the learned Standing Counsel for the respondent/ Bank relating to the liability of the petitioner to the Bank, it has been dealt with in detail in the common order dated 4.12.2009 passed in O.A.No.28 of 2008 and Counter Claim No.1 of 2009. Therefore, as on date, there is a decree as against the petitioner for a sum of Rs.33,18,464/- with interest and costs. The petitioner though would contend that his intention to file an appeal against the decree dated 4.12.2009, there are no details as to whether any appeal has been filed at all as on this date. That apart in paragraph Nos.19,23 and 24 of the affidavit of the petitioner, there is a categoric statement made by the petitioner to the effect that he has filed an appeal apparently invoking Section 17 of the SARFAESI Act challenging the notice issued under Section 13(4) of the Act. This Court has repeatedly held in a number of decisions right from the decision in DIGVISION ELECTRONICS LTD. v. INDIAN BANK (DB) Markandey Katju,C.J., (2005(3) C.T.C.,513), that the remedy of the aggrieved party as against the notice issued under Section 13(4) of SARFAESI Act is to approach the appropriate Tribunal and the writ petition is not maintainable. The same position has been succinctly stated by the Hon’ble the Supreme Court in TRANSCORE v. UNION OF INDIA (2006 (5) C.T.C.,753) in paragraph No.26 wherein the Supreme Court has held as under:-
“The Tribunal under the DRT Act is also the Tribunal under the NPA Act. Under Section 19 of the DRT Act read with Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (1993 Rules), the applicant bank or FI has to pay fees for filing such application to DRT under the DRT Act and, similarly, a borrower, aggrieved by an action under Section 13(4) of NPA Act was entitled to prefer an Application to the DRT under Section 17 of NPA.” (Emphasis added)
Therefore, when there is an efficacious remedy available in law to the petitioner and the petitioner having stated in uncontraverted terms that he has invoked the SARFAESI Act by filing necessary appeal before the Debts Recovery Tribunal, the claim of the petitioner to seek for the very same relief in this writ petition cannot be entertained.
7. The only other contention to be considered is as to whether the respondent/ Bank is entitled to invoke Section 13(2) of SARFAESI Act once on 19.9.2003 and again by issuing subsequent notice on 8.6.2009. In the first place, the said contention need not be gone into in this writ petition since the petitioner is stated to have chosen to challenge the subsequent notice issued under Section 13(4) of SARFAESI Act, dated 23.11.2009 by approaching the Debts Recovery Tribunal. In any event, we do not find any statutory prohibition in law from issuing any fresh notice. Reliance placed upon by learned counsel for the petitioner the decision of a learned single Judge of Jharkhand High Court in STAN COMMODITIES PVT. LTD. v. PUNJAB & SIND BANK (A.I.R.2009 JHARKHAND,14) cannot be applied inasmuch as that was a case where after the issuance of notice under Section 13(2) of SARFAESI Act and after receipt of objection, there was no further proceeding even by issuance of any notice under Section 13(4) of SARFAESI Act. After a gap of about three years, in continuation of the earlier notice issued in the year 2002 when the notice under Section 13(4) of SARFAESI Act was sought to be issued in the year 2007, the learned Judge took the view that without filing any reply to the objection of the borrower to the notice issued under Section 13(2) of SARFAESI Act, the Bank cannot take recourse to the provisions as provided under Section 13(4) of the SARFAESI Act. The facts involved in the said case are entirely different to the facts referred to herein.
8. In the case on hand, after issuance of earlier notice under Section 13(2) of the SARFAESI Act, dated 19.9.2003, though the petitioner is stated to have sent his objection on 17.12.2003, at the instance of the petitioner there was a writ petition in the year 2002 which was dismissed on 29.4.2003. That apart the petitioner also filed a suit in C.S.No.791 of 2003 to declare the classification of the respondent’s bank account as NPA as illegal and null and void and also for an injunction restraining the respondent from giving effect to the classification of the respondent’s account as NPA, apart from claiming damages. It is stated that in those circumstances as the proceedings were pending in this Court as well as before the Debts Recovery Tribunal, initial issuance of notice under the provisions of the SARFAESI Act could not be pursued. Since the Debts Recovery Tribunal has now disposed of the petitioner’s Counter Claim as well as respondent’s O.A. the Bank has chosen to issue the impugned notice. In such circumstances, the action of the respondent in having issued the present notice, cannot be faulted. The petitioner also relied upon a decision of a Division Bench of the Orissa High Court in KRUSHNA CHANDRA SAHOO v. BANK OF INDIA (AIR 2009 ORISSA, 35). The facts involved in that case are totally unconnected to the issue involved in this case. In that case, the challenge was to the notice under Section 13(4) of the SARFAESI Act, on the ground that the objections raised by the borrower to the notice under Section 13(2) of the SARFAESI Act was not considered in the notice under Section 13(4) of the SARFAESI Act. Such is not the case here. We therefore, do not find any support to the petitioner on that decision. In any event, we do not find any merit in the writ petition. The writ petition fails and the same is dismissed. No costs. Consequently, miscellaneous petitions are closed.
Index: Yes. (F.M.I.K.J.) (N.K.K.J.) Website: Yes. 01.02.2010. sai To State Bank of Mysore, T.Nagar Branch, Chennai 600 017 F.M.IBRAHIM KALIFULLA,J. and N.KIRUBAKARAN,J. W.P.588/2010 01.02.2010 sai