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R.K. Cements vs Punjab National Bank And Ors. on 10 November, 2003

Jammu High Court
R.K. Cements vs Punjab National Bank And Ors. on 10 November, 2003
Equivalent citations: AIR 2004 J K 107, 2004 (2) JKJ 430
Author: S Gupta
Bench: S Gupta


ORDER

S.K. Gupta, J.

1. Petitioner, by means of this petition, seeks to quash communication No. Misc/PA/JB/33A dated 11-3-2003, by issuance of a writ of certiorari, inter alia, alleging that the respondents have threatened to take forcible possession of the secured assets explicitly detailed in the notice for non-payment of the bank dues and that the respondents have resorted to coercive measures in utter disregard of the process of settlement of loan account, being under way, in which the petitioner has been afforded an opportunity to submit his request/proposal for settlement of Non-Performing Assets account up to 30-4-2003.

2. A prayer has” also been made by the petitioner to restrain the respondents through the mandate of the Court in effecting any recoveries under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, till the insurance claim of the firm is finally settled by the Insurance Company.

3. Detailed objections have been filed by the respondents in submitting that the impugned communication has been issued by the competent authority. In absence of any irregularity or illegality committed by the respondents, in issuing such communication, judicial review is not permissible.

4. According to the respondents, the financial assistance of Rs. 3,00,000/- in the shape of cash credit hypothecation facility for retail trading of cement was provided to the petitioner in pursuance of an agreement entered into between the parties and on the basis of various other documents executed by the petitioner. It is further agreed, by the petitioner, to deposit the daily sale proceeds of the business, in the cash credit account. The petitioner, initially though operated his account regularly but after some time stopped to deposit the daily sale proceeds in that account, as a result of which, the petitioner’s account became sticky and the loan account was declared as Non-Performing Assets (NPA) account on 31-3-1998.

5. It is further stated that the outstanding loan amount was demanded from the petitioner but without any positive response. Notice dated 9-12-2002 was also given to the defaulter-petitioner but the situation did not improve. The respondents have also informed the petitioner about the Scheme and the revised guidelines for settlement of the chronic Non-Performing Assets, for compromise and settlement but no application was made by the petitioner to avail the benefits of the said scheme.

6. It is not in dispute that petitioner, having approached the respondents, was provided Cash Credit facility of Rupees 3,00,000/-. Petitioner executed Mortgage Deed, agreement and other documents to secure the loan sanctioned by the Bank. The respondent-Bank, however, under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 intimated the petitioner but, despite notice, the petitioner did not pay the loan amount outstanding against him.

7. Mr. Anil Sethi, appearing on behalf of the petitioner could not point out any illegality or procedural irregularity, in the impugned notice, for payment of the outstanding loan amount or in case otherwise taking possession of the secured assets of the petitioner. It is emphatically stated by the respondents in their reply that till date no application has been made by the petitioner to be desirous to avail the benefits of the scheme floated by the Reserve Bank of India for Settlement and Compromise in case of Non-Performing Accounts.

8. It is pertinent to point that the money deposited with the banks is a public money and it cannot be allowed to be swindled away by the unscrupulous borrowers. Banks are trustees of the public money and, thus, the respondents are well within their right to initiate recovery proceedings against the defaulters. The scheme for settlement of Non-Performing Assets floated by the Reserve Bank of India does not come in the way of the Banking Institutions to initiate action under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 against the defaulters or chronic Non-Performing Assets accounts, notwithstanding the fact that cases are pending before the Courts/Debt Recovery Tribunals/BIFR.

9. The petitioner has not challenged the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 in the writ petition. The challenge has been made only to communication dated 11-3-2003, whereby the respondents are effecting recoveries by taking possession of the secured assets of the petitioner. There is no illegality or procedural irregularity in the order impugned and the respondents under the Act are authorised to initiate recovery proceedings against the defaulters. Now, therefore, in such circumstances, no sustainable cause or enforceable right is created by the petitioner to maintain this writ petition.

10. In the Agreement, the petitioner has undertaken to liquidate the loan amount along with interest due to him on the settlement of the insurance claim. This clearly shows that the amount indicated in the impugned communication is Rs. 5,46,644/-with further interest and this amount claimed by the bank with interest is not admitted by the petitioner, which raises disputed question of fact and, as such, cannot be determined in exercise of the writ jurisdiction under Article 226 of the Constitution.

11. In the facts and circumstances of the case, in my opinion, there is no merit in this petition which is accordingly dismissed.

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