The court emphasized the importance of complying with legal obligations and the need for safeguards against arbitrary authority.

1. The petitioners had come to this Court before. Petitioners had challenged the action contemplated to be taken in terms of Sec. 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) by the respondent-State Bank of India. During pendency, the petitioners having come to know that in spite of notice of the writ petition the respondent-Bank was trying to precipitate action, the matter was mentioned before this Court on the 11th of July, 2007 and taken up. This Court disposed of the said writ application being CWJC No. 6500 of 2007 on 11.7.2007 (Annexure-5) wherein the respondent-Bank was directed to dispose of the petitioners representation filed on 18.4.2007. receipt whereof was denied by the respondent-Bank. The said representation alongwith receipt showing its despatch by registered post was annexed to the writ petition itself. The petitioners now complain that once an order was passed by this Court (Annexure-5) on the same very day, the authorities of the Bank sealed their office premises and other premises. They have filed the present writ application challenging the proceedings and the action. Mr S.D. Sanjay, learned counsel appearing for the Bank submits that as the Bank had received no representation dated 18.4.2007, the Bank was not obliged to dispose of the same. To the specific averments that the action was taken after the order of this Court restraining coercive action, he referred to the counter affidavit which is a bald denial. In course of hearing, the copy of inventory was produced which clearly shows that the premises in dispute was sealed between 12 noon to 4 pm on 11th July, 2007 that is the sealing started before orders were passed but concluded after orders were passed by this Court.

These documents were not annexed to the counter affidavit. The alleged show cause which was filed by the petitioners and appended to the earlier writ petition itself alongwith postal receipt is, admittedly, yet to be disposed of on the plea that no such letter was received. The question is what is the effect of the order of this Court on the actions taken by the respondents.

2. Under the Act, it is not that the Bank can proceed to take action against any debtor. The Bank has jurisdiction to proceed under the SARFAESI Act only when the debtor has defaulted in discharging his liability. The expression "default" has been defined by Sec. 2 (j) of the Act. It means, inter alia, when the debt becomes "non-performing asset". What is "non-performing asset" is defined under Sec. 2(o) of the Act. That lays down that the object authorized to define non-performing asset. Having defined it so, in absence whereof the definition is to be guided by the guidelines provided by the Reserve Bank of India. It is not in dispute that in accordance with the guidelines of the Reserve Bank of India, State Bank of India has circulated guidelines to its officials. A reference thereto would show that a non-performing asset would be a debt the interest whereof has not been serviced for a quarter after it was due. The respondent-Bank asserts that one of the accounts of the petitioner became NPA on 31.12.2005 and, as such, notice in terms of Sec. 13 (2) of the Act was issued on 8.2.2007. Petitioners state by annexing their show cause or representation dated 18.4.2007 alongwith postal receipt showing despatch by registered post. This is of significant importance as Sec. 13 (3-A) of the Act mandates upon the Bank to respond to the said show cause/ representation against action proposed before it gets the jurisdiction to enter any premises or take action in terms of Sec. 13(4) of the Act. Therefore, disposal of such a representation is an action which confers jurisdiction on the Bank.

3. Here, in the first writ proceedings, the petitioners had annexed that representation alongwith postal receipt showing despatch by registered post. Apart from a bald denial of having received it nothin