The court emphasized the applicability of the SARFAESI Act, 2002, to loan repayment disputes, the creation of security interest, the permissibility of simultaneous proceedings, compliance with Section 13(2) requirements, and the availability of statutory remedies.

B.K. Sharma, J.

1. The petitioners, while admitting at least the liability of the repayment of the principal amount of loan amounting to Rs. 1,17,06,398.69 payable to the respondent-bank, and disputing the interest charged to the tune of Rs. 35,51,556.95 have challenged the notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short SARFAESI Act, 2002) on the following grounds:

1. The Act does not apply to the case as per provisions of Section 31(i) of the Act, the security interest created being agricultural land.

2. Not following the pre-requirement of dealing with the objection raised in respect of the impugned notice under Section 13(2) of the Act.

3. The respondent-bank could not have included the amount relating to interest in the demand made by the impugned notice, inasmuch as the Bakijai Officer of the Co-operative Societies has already held the same to be not recoverable.

4. The bank already having invoked the jurisdiction under Bengal Public Demands Recovery Act, 1913, cannot now take recourse to SARFAESI Act, 2002.

2. The basic facts are not in dispute. The petitioners applied for financial assistance to respondent No. 2-bank, i.e., the Assam Co-operative Apex Bank Ltd. in order to facilitate expansion of its tea estates. According to the petitioners the bank delayed the process of disbursement of the amount by about two years. The financial assistance sanctioned by the bank was under the following heads.

a. Working Capital Assistance (hereinafter referred to as 'WCA' for short) amounting to Rs. 95.70 lakh bearing interest at 14.75 per cent, per annum vide sanction letter No. ACAB/HO/ADV. TEA/CC/ 2002/3686-3689 dated May 11, 2002, against the loan proposal for season 2002-2003.

b. Medium term loan (hereinafter referred to as 'MIL' for short) amounting to Rs. 50,47,315 bearing interest at 14.50 per cent per annum vide sanction letter No. ACAB/HO/TEA/MT/2002/4047-60 dated July 8, 2002.

3. It is the case of the petitioners that due to the delay in disbursement of the promised loan, and owing to non-disbursement of the entire sanctioned loan, the petitioners suffered financial loss to the extent of Rs. 75,00,000 in their business resulting in delay in repayment of the instalments towards liquidation of the loan. However, they have asserted that they have the honest intention to repay the loan.

4. On failure of the petitioners in making the timely repayment of the loan, the respondent-bank initiated Bakijai/Certificate proceeding against the petitioners before the Bakijai Officer of the Co-operative Societies as per the provisions of the Assam Co-operative Societies Act, 1949, read with the provisions of the Bengal Public Demands Recovery Act, 1913("BPDR Act"). The proceeding was registered and numbered as Bakijai Case No. B-13/2005 for recovery of the total amount of Rs. 1,57,98,892.64. The break-ups of this total amount are as follows:

Rs.

A. Principal 1,17,06,398.69

B. Interest 40,81,493.95

C. Court fee 11,000

Total Claim 1,57,98,892.64

5. The Bakijai Officer, by his judgment and order dated March 1, 2006, upheld the certificate in respect of the principal amount of Rs. 1,17,06,398.69, but did not pass order for payment of the interest. However, it was provided in the order that the issue regarding the payment of interest by the certificate debtor, i.e., the petitioners could be considered provided the certificate holder, i.e., the banks submitted correct statements of accounts pertaining to interest keeping in mind the observations made in the order. Thus, although the interest was not awarded in the order it was kept open to be decided in due course.

6. Being aggrieved by the aforesaid judgment and order passed by the certificate officer, the petitioners have preferred an appeal under Section 51(1)(a) of the BPDR Act, 1913, and the same is purportedly pending before the Deputy Commissioner, Kamrup.

7. In the meantime, the bank has