JUDGMENT

Madan B. Lokur, J. –

1. Petitioner No.1 (Devi Ispat) is engaged in the manufacture and trade of iron and steel products while petitioner no.2 is one of its Directors.

2. Devi Ispat had availed of credit facilities from the State Bank of India with an overall limit of Rs. 29.5 crores. This credit facility was enhanced from time to time to Rs. 68.5 crores and Devi Ispat sought a further enhancement to Rs. 93 crores but that was not sanctioned.

3. While the Bank was processing the request of Devi Ispat, it issued a letter to it on 10th January 2013 informing that its cash credit account is irregular inasmuch as the outstanding was about Rs.11.7 crores against the permissible limit of Rs. 5.6 crores. Devi Ispat was also informed that it was not servicing the interest of cash credit, Foreign Currency Non – Resident Bank Account etc. It was also informed that its account was heading for becoming a non – performing asset (NPA) and Devi Ispat was requested to regularize all its accounts by 14th January 2013 failing which there would be no alternative but to call up the advance.

4. Devi Ispat replied to the above letter but since the response was not satisfactory another letter was issued by the Bank on 14th January 2013 calling upon Devi Ispat to regularize its accounts position failing which the Bank would be constrained to take appropriate action.

5. Since there was again no positive response from Devi Ispat, the Bank issued a letter on 18th January 2013 intimating Devi Ispat that its account had been classified as an NPA on 16th January 2013 and it was requested to regularize the accounts position within seven days.

6. Instead of regularizing its accounts, Devi Ispat sent a reply on 22nd January 2013 pointing out that the cash credit account had been operated on 19th October 2012 and therefore its declaration as an NPA on 16th January 2013 (that is on the 90th day instead of on completion of 90 days) was in violation of the guidelines issued by the Reserve Bank of India.

7. The Bank then issued a notice to Devi Ispat under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act) on 28th January 2013 demanding payment of the outstanding liabilities due to the extent of about Rs. 17.9 crores, $ 1.11 crores (of the FCNB account ) and interest.

8. Devi Ispat reacted by filing a writ petition in the Calcutta High Court challenging, inter alia, the declaration of its being an NPA and for setting aside the previous letters issued by the Bank.

9. The learned Single Judge hearing the writ petition dismissed it by an order dated 19th March 2013 on the sole ground that Devi Ispat had an alternate statutory remedy under Section 13(3A) of the SARFAESI Act to make a representation against the letter issued under Section 13(2) thereof.

10. Section 13(3A) of the SARFAESI Act reads as follows:

“13. Enforcement of security interest.

1) , (2) and (3) xxx

(3A) If, on receipt of the notice under sub – section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he 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.

Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A.”

11. After the dismissal of its writ petition, Devi Ispat made a representation to the Bank under Section 13(3A) of the Act on 22nd March 2013. This was followed almost immediately thereafter by an intra court appeal filed against the order of the learned Single