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2015 Supreme(Del) 636
High Court of Delhi
RAJIV SHAKDHER, J.
Yashwant Singh & Another – Appellant
Versus
Indian Bank & Another - Respondent
WP(C)No. 4021 of 2015 & CM No. 7192 of 2015
Decided On : 23-04-2015
For the Petitioners:Mohit Chaudhary, Damini Chawla, Advocates.
For the Respondents:Brijesh Kumar Tamber, Arshad Chaudhary, Quaisar Ali, Advocates.
The 2002 Act provides a comprehensive framework for addressing infractions by borrowers, and court intervention should be minimal, with statutory remedies being the primary recourse.
Headnote:
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act - Jurisdictional facts, NPA classification, and notice issuance - Section 13(2) - 2002 Act
Fact of the Case:
The petitioners challenge the classification of their loan account as a Non-Performing Asset (NPA) by the Indian Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (2002 Act). The petitioners argue that the NPA regime could not be triggered until the loan account was classified as an NPA, citing provisions of Section 13(2) of the 2002 Act and RBI Master Circulars.
Finding of the Court:
The court found that the loan accounts were correctly declared as NPAs as per the provisions of the 2002 Act and RBI guidelines. The court held that the petitioners' contentions were unsustainable and dismissed the writ petition.
Issues: The main issues were the classification of the loan accounts as NPAs, the validity of the notice issued under Section 13(2) of the 2002 Act, and the petitioners' challenge to the revised statement of accounts by the bank.
Ratio Decidendi: The court held that the 2002 Act provides a complete code for addressing infractions committed by borrowers, and intervention by the court should be minimal. The court emphasized that the petitioners' contentions should be examined by the forum conferred with the requisite authority under the 2002 Act, and not in writ jurisdiction.
Final Decision: The writ petition was dismissed, and the court found no merit in the petitioners' challenge. The court's observations were not to hinder the petitioners from availing statutory remedies under the 2002 Act.
1. There are several reliefs sought for in the present writ petition. Shorn of verbiage the main grievance of the petitioners is, that the respondent no.1, i.e., the Indian Bank, has taken recourse to the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short 2002 Act), [as amended by the Act of 2012] without the jurisdictional facts obtaining in the matter. In other words, the petitioners claim that the regime provided under the 2002 Act could not be triggered till such time the subject loan account was classified as a Non-Performing Asset (in short NPA).
1.1 This submission is based on the provisions of Section 13(2) of the 2002 Act. As to when an asset can be declared as an NPA, reliance is placed by the petitioners on the two Master Circular issued by the Reserve Bank of India (RBI) dated 30.06.2012 and 30.06.2013.
1.2 This plea is supported by the petitioners based on the fact that in an earlier round, it had approached this court for the same purpose by way of a writ petition under Article 226 of the Constitution. The said writ petition was numbered as WP(C) 2961/2013. This writ petition was withdrawn by the petitioners who are represented by the very same counsel, who appears for them today, i.e., Mr Mohit Chaudhary, with liberty to approach the Debt Recovery Tribunal (DRT).
2. Undoubtedly, the petitioners thereafter approached the DRT, which according to the petitioners passed an order dated 23.10.2013 in their favour. By this order, the DRT, inter alia, held that the classification of the account as NPA, was bad, and consequently directed the respondent no.1 bank to revise the statement of account; by deleting all objectionable entries; taking away capitalization effect on penal interest; and re-scheduling the instalments and, in that process fix the tenure of re-payment upto 31.05.2019, with current rate of interest, sans penal interest.
2.1 The entire exercise was to be carried out within a period of thirty days, with the obligation put on the petitioners, to continue to make payments as per the revised schedule.
3. It is the case of the petitioners that the loan account was re-structured on 10.09.2014, whereby they were asked to make payments by 15th day of each month. Therefore, according to the petitioners, the first quarter would have ended on 31.12.2014 and, thus, if this date is taken to be the correct date, in terms of clause 2.1.3 of Master Circular dated 30.06.2012, the said account could be declared as an NPA only at the end of the ninety day period, which, would end on 31.03.2015 and, that too, only if, the interest due and charged was not serviced fully, within the said time frame.
3.1 The other contention is, that in any event the revised amount calculated by respondent no.1 bank, pursuant to the order of the DRT dated 23.10.2013, is wrongly calculated. In this behalf, it is contended that respondent no.1 bank has not taken into account the contractual rate of interest and furthermore, has not given credit for amounts paid till 01.12.2009, when it was declared as an NPA for the first time.
3.2 The grievance is also made that the respondent bank had not disclosed their Bench Prime Lending Rate (BPLR) subsisting since the date of the disbursement of the loan, i.e. 04.03.2005, which according to the petitioners is the rate applicable for calculation of interest.
4. It is in this context that the petitioners have contended that respondent no.1 bank, via its authorized officer, i.e., respondent no.2, could not have issued a notice dated 23.01.2015 under Section 13(2) of the 2002 Act. I may only note that the petitioners also say that they came to know about the said notice only on 10.03.2015, that too, via a third party, one, M/s Aggarwal & Associates, who offered their services with respect to the proceedings initiated against them by respondent no.1 bank under Section 13(2) of the 2002 Act.
4.1 What is not in dispute though, is that,
