The SARFAESI Act enables banks and financial institutions to realize long-term assets, manage liquidity, and improve recovery of debts, and there is no prohibition for issuing a second notice under Section 13(2) if the first notice has not been given effect to.

By this petition, the petitioners seek to challenge the validity and legality of the notice dated 28-7-2008 (Annexure-P/4) under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SARFAESI Act"). Further challenge is to the reply dated 10-10-2006 (Annexure-P/6) to the legal notice of the petitioners and intimation-cum-letter demanding possession of securities dated 23-10-2006 (Annexure-P/9).

2. The indisputable facts, in nutshell, as projected by the petitioners, are that the petitioner No. 1 is a public limited company, engaged in the business of milling, sorting and trading of rice and related products. Petitioners Nos. 2 and 3 are the Directors of the petitioner No. 1. According to the petitioners, the petitioner No. 1 was allegedly given financial assets in the shape of packing credit hypothecation limit, foreign bill purchase limit, term loan and foreign letter of credit limit. It was enhanced over the period of time. On 17-7-1997 the petitioners have credited mortgage of their immovable properties situated at Tilda and village Telibandha, District Raipur. For the alleged failure on the part of the petitioners to pay the aforesaid credit facilities, interest and other monies to the Bank, the petitioners were classified as Non Performing Asset (NPA). The respondent No. 1 accordingly issued a notice dated 24-2-2005 (Annexure-P/1) under Section 13(2) of the SARFAESI Act.

3. The petitioners submitted their reply/ representation dated 13-4-2005 (Annexure-P/2) to the above-stated notice issued by the respondents. The said reply was neither considered nor decided. In the meantime, the respondents initiated a recovery proceeding by filing original application No. 94/2005 before the Debts Recovery Tribunal, Jabalpur (for short "the DRT"), which is pending consideration and adjudication. The respondents issued a second demand notice dated 28-7-2006 (Annexure-P/4) under the provisions of Section 13(2) of the SARFAESI Act. The petitioners submitted their reply to the said notice on 4-10-2006 (Annexure-P/5) raising an objection that two parallel proceedings cannot be initiated against the petitioners one before the DRT, which is pending consideration in original application No. 94/2005 and secondly under the provisions of Section 13 of the SARFAESI Act. Thus, the subsequent notice dated 28-7-2006 was bad in law.

4. The respondents Bank sent a reply dated 10-10-2006 (Annexure-P/6) to the legal notice dated 4-10-2008 stating that the notice dated 24-2-2005 under Section 13(2) of the SARFAESI Act should be and ought to be treated as withdrawn and the legal notice was accordingly rejected. It was further observed that pursuant to the notice dated 28-7-2006 under Section 13(2) of the SARFAESI Act to make full payment as required by that notice, at the earliest. Thereafter, the petitioners made one more representation dated 16-10-2006 (Annexure-P/ 7) that no steps be taken in view of the decision of the High Court of Punjab and Haryana in the matter of M/s. Kalyani Sales Company v. Union of India (AIR 2006 P and H 107) wherein it was held that two proceedings cannot go on together. It was further informed that the matter was pending consideration before the Hon'ble Supreme Court with regard to the question of law as to whether two parallel proceedings under the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short "the Act, 1993") and the SARFAESI Act can go on together or not. The respondents Bank sent a reply on 23-10-2006 (Annexure-P/9) to the representation of the petitioners dated 16-10-2006 informing the petitioners that the Bank authorities would take possession of the properties/assets charged to the Bank on 13-11-2006. The petitioners were further restrained from transferring the secured properties by way of sale, lease or otherwise any of the assets hypothecated/mortgaged to the Bank. Being aggrieved,