The mandatory nature of statutory provisions, particularly Section 13(3A), and the non-adjudicatory process for enforcing security interest under the Act, 2002.

Satish K. Agnihotri, J.

1. By this petition, the Petitioner seeks to challenge the legality and validity of the notice dated 21-3-2009 (Annexure P/5) issued by the Respondent bank under the provisions of Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the Act, 2002"). Further to quash the proceedings initiated by the Respondent No. 2 i.e. District Magistrate, Raipur.

2. The indisputable facts, in nutshell, as projected by the Petitioner, are that the Petitioner is carrying on the business in the name and style of M/s. Shyam Rice & Parboiling Unit at Nevra District, Raipur. According to the Petitioner, the Petitioner applied for various loans and credit facilities from the Respondent bank. After completing the necessary formalities, the Respondent bank granted the loan benefit to the Petitioner. However, on account of restriction imposed by the Krishi Upaj Mandi Samiti, Nevra on 28-2-2009 (Annexure P/1) from carrying the business of rice mill and parboiling, the Petitioner committed certain defaults in making the payment of loan to the Respondent bank. The said fact has been brought by the Petitioner to the notice of the Respondent bank. In spite of said information, the Respondent bank compelled the Petitioner to make payment of loan amount. Even the legal notice dated 3-2-2009 (Annexure P/3) has been sent by the Respondent bank and asked the Petitioner to make entire amount of loan along with interest accrued thereon within a period of 15 days. After receipt of the said notice the Petitioner submitted its reply dated 20-2-2009 (Annexure P/4) mentioning all the difficulties faced by it and requested not to initiate any action under the provisions of the Act, 2002.

3. Thereafter, the Respondent bank issued the notice dated 21-3-2009 (Annexure P/5) under Section 13(2) of the Act, 2002. The Petitioner submitted its reply to the impugned notice on 5-5-2009 (Annexure P/6) and sent the same through speed post which has been returned with a remark that (sic) as is evident from Annexure P/7. Thereafter, the Respondent No. 2 invoking the provisions of Section 14 of the Act, 2002 issued a notice dated 28-7-2009 (Annexure P/8) calling upon the Petitioner to appear before him on 24-8-2009 at 3.00 p.m. failing which ex parte action would be initiated against the Petitioner. The said action of the Respondent authorities is illegal, arbitrary and against the provisions of law. Thus, this petition.

4. Shri Sharma learned Counsel appearing for the Petitioner would submit that the action of the Respondent bank, initiated under the provisions of the Act, 2002 for recovery of loan is illegal and arbitrary. The bank authorities ought to have received the reply sent by the Petitioner to the notice under Section 13(2) of the Act, 2002 and they cannot refuse to accept the same from the postal authorities. Shri Sharma would further submit that without deciding the objection raised by the Petitioner, the authorities cannot proceed further. The impugned action of the Respondent authorities is against the provisions of Articles 14, 19 & 21 of the Constitution of India. Thus, the impugned notice dated 21-3-2009 (Annexure P/5) may be quashed and the Respondent may be re-strained from taking any coercive steps against the Petitioner.

5. Ms. Fouzia Mirza, learned Counsel for the Respondent bank, would submit that the Petitioner without availing the alternative efficacious remedy available under the provisions of Section 17 of the Act, 2002, has approached this Court. Ms. Mirza would further submit that the Petitioner has neglected in timely payment of the contractual liability and has committed a breach of terms and condition of loan agreement. In view of the guidelines issued by the Reserve Bank of India, the Respondent bank called upon the Petitioner to clear the entire dues within a period of 15 days from the date of receipt of notice failing which they would exercise th