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2019 Supreme(Gau) 795
IN THE HIGH COURT OF GAUHATI
Ajai Lamba, Achintya Malla Bujor Barua, JJ.
Friends Distillery And Bottling Industry Pvt. Ltd. And Ors. - Appellants
Vs.
State of Assam And Ors. - Respondents
Writ Petition (Civil) No. 7446 of 2017
Decided On : 01-11-2019
S. Sancheti, Adv., T.C. Chutia, Adv., K. Kashyab, Adv., D. Musahary, Adv.
The court's decision was influenced by the seriously disputed questions of fact raised by the petitioners, highlighting the importance of addressing such disputes before the appropriate legal forum.
Headnote:
Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 - Writ Petition - Section 13(2) - 18.8.2017, 31.3.2017, 9.11.2017 - The court discussed the issuance of notices under Section 13(2) of the Act of 2002, the challenge to the notices, the show-cause notice issued by the Deputy Commissioner, and the subsequent order deputing a Sub-Divisional Magistrate to oversee the possession of secured assets by the creditor Bank.
Fact of the Case:
The petitioners sought a writ to quash orders issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. The petitioners challenged the notices and subsequent show-cause notice issued by the Deputy Commissioner.
Finding of the Court:
The court found that seriously disputed questions of fact had been raised by the petitioners regarding the loan documents and the alleged fraud committed by the Bank's Branch Manager. The court dismissed the petition but granted the petitioners liberty to avail appropriate remedies as provided in law.
Issues: The issues involved the validity of the notices issued under Section 13(2) of the Act of 2002, the challenge to the show-cause notice issued by the Deputy Commissioner, and the disputed facts regarding the loan documents and alleged fraud by the Bank's Branch Manager.
Ratio Decidendi: The court's decision was based on the finding of seriously disputed questions of fact raised by the petitioners, which could be addressed before the Debt Recovery Tribunal.
Final Decision: The petition was dismissed, but the petitioners were granted liberty to avail appropriate remedies as provided in law.
JUDGMENT :
Ajai Lamba, J.
Friends Distillery and Bottling Industry Pvt. Ltd and 2 others have preferred this petition for issuance of a writ in the nature of certiorari for quashing order dated 31.3.2017 issued under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for short, the Act of 2002).
The petitioners also seek quashing of order dated 18.8.2017.
2. We have heard learned counsel for the petitioners and have gone through the documents available on record. The sequence of events, in brief, is required to be noticed. It appears that the petitioner No.1 is a Private Limited Company incorporated under the Companies Act, 1956. It appears that petitioner company took some financial assistance from the respondent No.4, Langpi Dehangi Rural Bank. It further appears that the amount due towards creditor/respondent No.4 bank was not repaid as per the schedule. In such circumstance, notice under Section 13(2) of the Act of 2002 was issued vide the notice dated 5.7.2016 which is placed on record as Annexure-VII.
3. The petitioner company appears to have given a reply to the said notice dated 7.9.2016. Subsequently, the proceedings were challenged vide the Application (SARFAESI) No.96/2016. Order dated 24.2.2017 passed by the Debt Recovery Tribunal (for short, the DRT), Guwahati is available on record as Annexure-XV. Perusal of the order indicates that counsel for the Bank stated that entire action taken under the Act of 2002 and the rules made there under from the stage of issuing Demand Notice under Section 13(2) of the Act of 2002, had been withdrawn.
Consequent to the said statement given on behalf of the creditor Bank, the application filed from the petitioners' side was disposed of as in-fructuous. Symbolic position taken by the Bank was restored to the applicant petitioner.
4. On going through the record, it further appears that a fresh notice dated 31.3.2017 was issued by the respondent Bank under Section 13(2) of the Act of 2002 with the plea that the petitioners owed Rs.102,08,084/- along with interest and incidental expenses etc. Along with the notice schedules were appended to detail the mortgaged properties and the amount owed by the petitioners. The demand notice is appended with the petition as Annexure-XIX.
The demand notice dated 31.3.2017 has been challenged by virtue of this petition.
5. Annexure-Xx is the reply to the notice given on behalf of the petitioner and is dated 5.5.2017.
6. Annexure-Xxi is a letter dated 22.5.2017 issued on behalf of the Bank to the petitioner in context of representation dated 5.5.2017 (supra) received by the Bank on 12.5.2017. The Bank took a stand that the statement made by the petitioners debtor was based on misrepresentation. The petitioners had been wrongly denying the fact that they had not availed cash credit limit. Loan documents executed and available with the Bank indicate that the documents had been signed and executed.
7. Be that as it may, Original Application No.77/2017 (Annexure-XXII) was filed by the Bank which is pending adjudication.
8. Perusal of order dated 18.8.2017 appended as Annexure-XXVI indicates that the Deputy Commissioner issued notice to the petitioners saying that the petitioners had failed to pay the arrears amounting to Rs.1,02,08,084/- along with interest cost and other expenses till the date of realization even though notice dated 31.3.2017 had been issued by the Bank. Vide the document Annexure-XXVI (supra), the Deputy Commissioner asked the petitioners to show cause regarding failure to repay the Bank within 7 days of receipt of the letter failing which necessary steps would be taken for taking over physical possession of the secured assets under Section 14 of the Act of 2002.
This show-cause notice has also been challenged by virtue of this petition.
9. Perusal of Annexure-XXVII dated 23.8.2017 indicates that the petitioners gave reply to the Deputy Commissioner. The stand taken by the petitio
