Nooty.Ramamohana Rao, J.

The Writ Petitioner is an industrial machinery manufacturing company. It seeks to challenge the validity of the notice issued by the respondents under Sub-Section 2 of Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short, referred to as SARFAESI Act henceforth).

2. According to the petitioner, it had been manufacturing engineering machinery, particularly, process boilers and industrial power boilers. It has earned name for itself for the precision and skill employed by it in making boilers as well as for the quality of the products manufactured. It has, in fact, started earning foreign exchange to the country by exporting the machinery manufactured by it to Thailand. It has reached a peak turnover of Rs.210 crores by 2010-2011. During the year 2010-2011, it has entered into an export order for supplying process boilers to a sugar industry in Thailand. It has erroneously considered that EURO is more stable than US$ and hence negotiated for payment in Euros. Unfortunately, the economic conditions in Europe have started taking a downward slide resulting in the Euro losing much of its value. As a consequence of fluctuation of value of foreign currency, the petitioner company, it is, averred, has sustained losses. The turnover has just fallen to Rs.98 crores. But, still, it has a 140 crore worth export order in its hands. But, unfortunately, because of the accumulation of losses for the past over three years, the company has become a sick company.

3. In this backdrop, the Writ Petitioner has challenged the notice served under Sub-section 2 of Section 13 of the SARFAESI Act. According to the writ petitioner, the petitioner-company has filed for a reconstruction arrangement before Board for Industrial and Financial Reconstruction (BIFR). It was registered. In that view of the matter, the action initiated by the respondent bank has to be withheld.

4. Heard Sri AR.L. Sunderesan, learned Senior Counsel appearing for the petitioner, and Sri E.Omprakash, learned counsel appearing for the respondent bank.

5. It is urged by Sri Sunderesan that apart from State Bank of India, the writ petitioner had availed benefit of financial arrangements with IDBI. Put together, the liability of the writ petitioner company to both these banks is to the tune of little more than 100 Crores, out of which nearly 64% to 68% is due and payable to State Bank of India, while the remaining is due and payable to IDBI. Thus, to the State Bank of India alone, the total dues payable are less than 75% of the outstanding liabilities. On the strength and basis of the financial arrangement made by the petitioner with SBI, the State Bank of India alone could not have initiated the recovery proceedings without the express consent of IDBI, is the contention that is canvassed before this Court.

6. It is contended that the petitioner company has filed a reference before BIFR seeking for rehabilitation of the Sick Industrial Unit and since the reference was taken on file as Case No.129 of 2015, Section 22 of SICA would come to the rescue of the Writ Petitioner company and hence the proceedings initiated under SARFAESI Act had to be withheld.

7. In the counter affidavit filed on behalf of State Bank of India by its Assistant General Manager/Authorised Officer (Stressed Assets Management Branch), Coimbatore, the financial assistance extended to the writ petitioner company and the resultant default committed by it in properly recycling the debt has been brought out in detail in the following manner :

"6. I further submit that, as far as the factual background of this case, the writ petitioner company (Veesons Energy Systems Pvt.Ltd.) was established in the year 1981 and the company was a private limited company which was originally manufacturing package type boilers and now manufacturing all types of boilers. The boilers manufactured by the writ petitioner company are used in The