The court's decision highlighted the importance of considering representations for repayment within a specified time frame under the SARFAESI Act.

JUDGMENT

Joymalya Bagchi, J. - Petitioner has approached this Court assailing the notices dated 05.06.2021 and 20.07.2021 issued by 3rd respondent under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act').

2. Petitioner had availed two loans of Rs.1,42,50,000/- under loan Account No.HLLAVJW00293076 and Rs.1,22,50,000/- under loan Account No.HLLAVJW00293085 vide loan agreements dated 24.09.2016 against collateral security mortgaged by one Smt.Noorjahan Begum and Sri P.V.Krishna Kumar, one of the directors of the petitioner's company respectively. The accounts of the petitioner became Non-Performing Assets (NPA) and accordingly impugned notices dated 05.06.2021 and 20.07.2021 came to be issued by the 3rd respondent financial institution.

3. Learned counsel appearing for the petitioner submits that by letter dated 20.03.2021, a prayer was made to the 3rd respondent to delink the aforesaid accounts from other accounts and permit the petitioner to clear off the outstanding loans within 90 days. By letter dated 30.06.2021, the 3rd respondent agreed to the proposal to delink the secured assets and provide No Objection Certificate for the loans subject to compliance of the following conditions:

(i) Clearance of overdue amount of not less than Rs.8,39,713/- by today i.e. 30th June, 2021.

(ii) Will keep the loan regular by clearing EMIs every month without fail.

(iii) As discussed the loan is expected to be closed within the next 45-60 days.

While the petitioner was agreeable to conditions Nos.(ii) and (iii), it sought waiver of payment of Rs.8,39,713/- proposed by the 3rd respondent financial institution.

4. Learned counsel for petitioner submits, ignoring such negotiations, 3rd respondent financial institution has proceeded against the secured assets under the provisions of the SARFAESI Act. He further contends, in response to the aforesaid notices issued, the petitioner has submitted an extensive representation dated 29.07.2021 which has not been considered by the 3rd respondent till date. He also contends that condition (i) proposed by the 3rd respondent for clearance of overdue amount of Rs.8,39,713/- by 30th June, 2021 was highly arbitrary and unrealistic in the factual backdrop of the case.

5. We have considered the materials on record in the light of the aforesaid submissions.

6. Admittedly, the accounts of the petitioner became NPA. In the meantime, the petitioner made a proposal to delink the aforesaid accounts from other accounts and permit it to sell the secured assets to repay the liability. Such proposal was considered and by letter dated 30.06.2021, the 3rd respondent permitted the petitioner to do so, subject to the aforesaid conditions. The petitioner was unable to comply with condition (i) i.e., clearance of outstanding dues by the even day on which the proposal was made. In the meantime, notices under Section 13(2) of the SARFAESI Act came to be issued. As the loan accounts had already been declared NPA, we are of the view issuance of notices under Section 13(2) of the SARFAESI Act cannot be said to be illegal.

7. Although certain letters relating to negotiations for repayment of the dues have been placed on record, it is pertinent to note that the petitioner did not respond to the notices under Section 13(2) of the SARFAESI Act within the stipulated time as prescribed under Section 13(3A) of the SARFAESI Act thereof. However, belatedly a representation dated 29.07.2021 has been made in similar lines as in earlier letter dated 20.03.2021 which had been dealt with by the 3rd respondent in its response dated 30.06.2021. However, as the petitioner still desires to liquidate its dues under mutually agreed terms and since in our view, clearance of overdue amount by the self same day i.e., 30th June 2021 on which date the proposal was accepted by 3rd respondent appears to be onerous, we direct the 3rd respondent to consider the repr