Per Smt. Ranjana Desai, J.

1. The petitioner is a body corporate incorporated under the provisions of the Banking Companies Act, 1949, having its head office at 10, BTM, Sarani, Kolkata, and branch offices all over India, including one at Churchgate.

2. Respondent 1 is a partnership firm constituted under the provisions of the Indian Partnership Act and, the rest of the respondents are its partners.

3. The respondents have availed various loan facilities from the petitioner's various branches as per the details given in paragraph 3 of the petition. For securing the said loans, the respondents had mortgaged their two flats situate at Malbar Hill, Mumbai (for convenience, “the secured assets”).

4. It is the case of the petitioner that the loan account of the petitioner became irregular despite the efforts of the petitioner to regularise it and, hence, the petitioner declared the account of the respondents as Non Performing Asset (for convenience, “NPA”) on 31/3/2005.

5. According to the petitioner, on the date of declaring the account of the respondents as NPA, the outstanding amount payable by the respondents to the petitioner was Rs.1,59,79,460/- with further interest at contractual rate w.e.f. 1/4/2005 with Churchgate Branch and Rs.38,44,738.91 with further interest at contractual rate w.e.f. 1/1/2005 with Queens Road Branch of the petitioner.

6. After declaring the account of the respondents as NPA as on 31/3/2005 for the sake of recovering the outstanding amount, the Bank initiated proceedings under the Securitization and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (for convenience, “the NPA Act”). Churchgate Branch of the petitioner issued notice dated 7/4/2005 and the Queens Road Branch issued notice dated 11/6/2005 to the respondents under section 13(2) of the NPA Act and demanded the payment of the outstanding amount and warned the respondents that if they failed to repay the loan, they would proceed further under the provisions of section 13(4) of the NPA Act.

7. The respondents replied to the said notices and the petitioner duly rejoined to the same under the provisions of section 13(3)(A) of the NPA Act. 8. According to the petitioner, despite notice, the respondents failed to repay the amount within a period of 60 days as provided under section 13(2) of the NPA Act. The petitioner, therefore, initiated proceedings under section 13(4) of the NPA Act. The petitioner took symbolic possession of the secured assets by pasting notice on the door of the secured asset, by giving notice to the borrower in person on 15/7/2005. The learned Chief Metropolitan Magistrate offered assistance to the petitioner to take physical possession of the secured assets. The petitioner took physical possession of the secured assets on 13/3/2006. The petitioner invited offers from public at large for holding auction for selling the secured assets.

9. The respondent then filed an application under section 17 of the NPA Act, inter alia, praying that notice dated 7/4/2005 and notice dated 11/6/2005 be quashed and set aside; that the petitioner be restrained from selling, disposing of, alienating, transferring and creating any third party rights in the secured assets and that the respondents be permitted to bring the prospective purchasers in respect of the secured assets and be allowed to sell the said flats at market rate to the prospective purchasers and the sale proceeds be deposited with the respondents and for that, the petitioner be ordered and directed to cooperate with the respondents.

10. The petitioner opposed the application on various grounds. The petitioner raised a preliminary contention that the application filed by the respondents was time barred taking into consideration the fact that it had been filed almost nine months after the petitioner initiated action under section 13(4) of the