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IN THE HIGH COURT AT CALCUTTA
DEBANGSU BASAK, MD.SHABBAR RASHIDI
Punjab National Bank – Appellant
Versus
Atibir Industries Co. Ltd. – Respondent
JUDGMENT :
DEBANGSU BASAK, J.
1. Appeal is at the behest of Punjab National Bank and directed against order dated May 15, 2023 passed in WPA 11422 of 2023.
2. Impugned order is interim in nature.
3. By the impugned order, learned Single Judge restrained the appellant from taking steps in terms of a web notice dated April 29, 2023 in respect of the e-bidding.
4. Learned senior advocate appearing for the appellant submits that the writ petitioner obtained both fund based as well as non-fund based credit facilities from the appellant. He submits that, the credit facilities were classified as Non Performing Assets (NPA) with effect from June 6, 2021. A notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was issued on January 18, 2022. Despite receipt of the same, the writ petitioner did not respond thereto. Writ petitioner, however, submitted a proposal for one time settlement dated April 13, 2023. Such one time settlement was not accepted.
5. Learned senior advocate appearing for the appellant submits that, appellant thereafter decided to issue a web-notice dated April 29, 2023 in order to transfer the accoun
Debt Recovery and monetary Laws - Defaulted in payment of instalments in respect of the overdraft facility - Section 13(2) of SARFAESI Act and measures taken under Section 13(4) thereof were only nec....
The court held that classification of an account as NPA without meeting specific RBI criteria is arbitrary and violates statutory obligations.
The statutory scheme of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act, 2002) does not provide for a legal remedy until the Section 13(4....
The court's discretionary jurisdiction under Article 226 is not absolute and should be exercised judiciously.
Classification of an account as NPA under SARFAESI Act is not subject to judicial review and requires the borrower to seek recourse through statutory appeal under Section 17.
The classification of loan accounts as non-performing assets must be borrower-wise, not facility-wise, and a guarantor cannot evade liability due to another borrower's defaults.
The classification of MSME loan accounts as NPAs without addressing the restructuring proposals violates RBI directives, mandating banks to consider such proposals before classification.
The classification of loan accounts as borrower-wise under the SARFAESI Act is upheld, emphasizing that a guarantor cannot evade liability due to another borrower's NPA status.
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