Vilas V. Afzulpurkar, J.

This writ petition is filed questioning the action of the first respondent bank in issuing notice dated 14.06.2006 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (Act 54 of 2002), hereinafter called ‘the SARFAESI Act’.

2. In normal course we would not have entertained this writ petition inasmuch as no measures under Section 13(4) of the SARFAESI Act have been taken by the first respondent bank but we have heard the writ petition at length after permitting the respondent to file a counter affidavit in view of the fact that the petitioner questions the classification of its account, by the first respondent bank, as a Non-Performing Asset (NPA). The foundation of the writ petition and the basic contention of the petitioner, therefore, is that the declaration of the petitioner’s account as NPA is not justifiable and consequently the jurisdictional fact necessary for invocation of Section 13 of the SARFAESI Act is non-existent in this case. The sole question that falls for consideration in this case is whether the first respondent bank is justified in classifying the petitioner’s account as NPA.

3. The facts, in brief, are as follows:

(a) The petitioner is a company incorporated in the year 2002 under the Companies Act, 1956 and is engaged in the business of finishing work of Dal products, which has been enjoying the credit facilities, such as Cash Credit (Hypothecation) to the extent of Rs.96,60,000/- and a term loan of Rs.41,12,000/-, from the first respondent bank from 2002 onwards. The term loan is against mortgage of immovable properties and thus, the overall exposure of the petitioner is to the tune of Rs.1,37,72,000/- and the said loans are said to have been granted by the first respondent bank after satisfactorily fulfilling the due documentation and securities required therefor.

(b) The petitioner submits that the original limit sanctioned by the bank was revised from Rs.85 Lakhs to Rs.137.72 Lakhs vide their letter dated 12.10.2004 that the petitioner company is regular in repayment of the said loans. The petitioner, however, submits that on account of various cash constraints and business exigencies, it could not pay interest for a period of two months whereupon the bank has treated the petitioner’s account as NPA and issued the impugned notice dated 14.06.2006 under Section 13(2) of the SARFAESI Act and demanded an amount of Rs.1,31,57,549.05 as outstanding amount as on 31.05.2006. The petitioner has thereupon filed objections to the said notice through its counsel under their reply dated 14.08.2006, primarily, on the ground that though the petitioner is regular in repayment of amount, the present default has occurred due to delay in receivables from sundry depositors and the company has not lost its viability and as such, the classification of the petitioner’s account as NPA is unjustified. It was also alleged that while in classifying the said account as NPA, the directions and guidelines regarding asset classification issued by the Reserve Bank of India are not followed and therefore, the bank has no jurisdiction to issue notice under Section 13(2) of the SARFAESI Act.

4. The respondent bank alleges that its replied to the said notice under their reply dated 01.09.2006 informing the petitioner that ill operations of the account and weak management resulted in non-consideration of the petitioner’s proposal for enhancement of the cash credit limits. To the extent of classification of the account as NPA, the bank has replied that it has every right to take legal action under the SARFAESI Act, as the account is classified as NPA on 31.05.2006 and as such, the action under the SARFAESI Act is justified.

5. Petitioner, however, alleges in the affidavit that the bank has not communicated any reasons with regard to their objections dated 14.08.2006 and in any case, no reasons are communicated as to why the account