Sai Rishik Interiors vs Canara Bank

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2022 Supreme(AP) 253

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
C.PRAVEEN KUMAR, V.SUJATHA, JJ.
M/ s Sai Rishik Interiors Appellant
Versus
The Canara Bank, - Respondent
Writ Petition No.26924 of 2021
Decided on : 31-03-2022

Important Points

Disputed representations under the SARFAESI Act require adjudication by the proper authority in accordance with Section 13(3A) of the Act.

Subject

Civil Law - Writ Petition under Article 226 of the Constitution of India

Act Referred

CONSTITUTION OF INDIA : Art.226
SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT : S.13(4), S.13(3)(a)

Headnote

SARFAESI Act - Representation Dispute - The court directed the petitioner to provide copies of representations to the authorities for adjudication in accordance with law, setting aside the notice issued by the respondent bank under Section 13(4) of the SARFAESI Act and the consequential proceedings.

Fact of the Case:

The petitioner filed a writ petition under Article 226 of the Constitution of India seeking to declare the orders of the respondent bank as contrary to the provisions of the SARFAESI Act and the Security Interest Rules, specifically challenging the notice issued under Section 13(4) of the SARFAESI Act.

Finding of the Court:

The court directed the petitioner to provide copies of representations to the authorities for adjudication in accordance with law, setting aside the notice issued by the respondent bank under Section 13(4) of the SARFAESI Act and the consequential proceedings.

Issues: Disputed representations under Section 13(3A) of the SARFAESI Act, lack of response from the respondent bank, and the proper authority to adjudicate the dispute.

Ratio Decidendi: The court found that the disputed representations required adjudication by the proper authority in accordance with Section 13(3A) of the SARFAESI Act, and due to the non-functioning of the Debts Recovery Tribunal, directed the petitioner to provide copies for further action.

Final Decision: The Writ Petition was allowed, setting aside the notice issued by the respondent bank under Section 13(4) of the SARFAESI Act and the consequential proceedings, with no order as to costs. Miscellaneous petitions pending in the Writ Petition were closed.

Advocates Appeared:
For the Appellant : KARUMANCHI INDRANEEL BABU
For the Respondent: G V S KISHORE KUMAR

ORDER :

C.Praveen Kumar, J.

Heard Sri Karumanchi Indraneel Babu, learned counsel for the petitioner, and Sri G.V.S.Kishore Kumar, learned counsel for the respondents.

2. The present writ petition came to be filed under Article 226 of the Constitution of India seeking the following relief:-

“……. to issue a writ, order or direction more particularly one in the nature of a writ of Mandamus declaring the orders of the respondent issued vide Ref:84/8370/SARFAESI-PN/2377/773/2140 dated 1.10.2021 and subsequent paper publication dated 09.11.2021 under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 contrary to the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Security Interest Rules made thereunder and illegally locking the property as illegal, arbitrary and contrary to the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Enforcement Rules, 2002 and without jurisdiction and set aside the same and to pass….”

3. Though various grounds are raised in the writ petition, learned counsel for the petitioner submits that pursuant to a notice, dated 01.06.2021, issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for short, “SARFAESI Act”), the petitioner has submitted representations on 28.07.2021 and 13.09.2021. According to him, in spite of receipt of the said representations, there is no response from the respondent bank, which is in violation of Section 13(3A) of the SARFAESI Act.

4. A counter-affidavit came to be filed by the respondent bank opposing the same.

5. Learned counsel for the respondent bank would submit that it is the plea of the bank that no such representations are received by the respondent bank and as such, responding to the said representations does not arise.

6. Having regard to the disputed question of fact and since the Debts Recovery Tribunal, Visakhapatnam, which is the proper authority to adjudicate the dispute, is not functioning, we hereby direct the petitioner to give a copy of the representations, dated 28.07.2021 and 13.09.2021, by 06.04.2022 in which event, the authorities shall deal with the same in accordance with law, more particularly, in terms of Section 13(3A) of the SARFAESI Act.

7. Accordingly, the Writ Petition is allowed setting aside the notice, dated 01.10.2021, issued by the respondent bank under Section 13(4) of the SARFAESI Act and the consequential proceedings which are under challenge. There shall be no order as to costs.

Miscellaneous petitions pending, if any, in this Writ Petition shall stand closed.