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2020 Supreme(All) 1001
IN THE HIGH COURT OF ALLAHABAD
Naheed Ara Moonis, Deepak Verma, JJ.
M/s Mata Kaila Devi Gangsar Stone Pvt. Ltd. – Petitioner
Versus
State Of U.P. and Others – Respondents
Writ -C No. 11611 of 2020
Decided On : 26-08-2020
Advocate Appeared:
For the Petitioner: Birendra Singh
For the Respondent: C.S.C., Sanjai Singh
Point of Law: Debtor is not entitled for the discretionary equitable relief under Article 226 and 136 of the Constitution of India. In the aforesaid case the Hon'ble Apex Court was of the view that non compliance of sub Section 3A of Section 13 cannot be of any avail to the debtor whose conduct has been merely to seek time and not repay the loan as promised on several occasions
Headnote:
Constitution of India, 1950 – Article 226 – Security Interest (Enforcement) Rules, 2002 – Rule 8 – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Section 13, 17 – Possession Notice – Quashment – Instant petition has been filed invoking extraordinary jurisdiction of this court under Article 226 of the Constitution of India with the prayer to issue a writ, order or direction in the nature of certiorari quashing the Possession Notice and Demand Notice issued by the respondent no.3 – Issue any other suitable writ, order or direction, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case –
Finding of the Court:
Petitioner has failed to make any representation in response to the notice dated 14.2.2019 within 60 days, which has nothing to do with the lock down due to pandemic of Covid-19. – The loan was granted in 2017 the petitioner failed to adhere to the terms and conditions to repay the loan as stipulated. – This compelled the respondent no. 3 to issue demand notice after declaring the account as NPA on 31.1.2019 much prior to the lock down. – Thereafter despite repeated demand the outstanding amount was not paid. The petitioner could not even redeem the secured assets according to sub-section 8 of Section 13 of the Act. – Thus the entire proceeding initiated against loan account declared as NPA prior to the Covid-19 lock down. – After issuance of demand notice the petitioner has started depositing certain instalment from 15.2.2019 uptill September 2019, which in clear violation of the statutory provisions of the SARFAESI Act/Rules. – The petitioner cannot be allowed to sit on the fence and wait and thereafter coming to the writ court for the redressal of his grievance. – Parity with any judgment cannot also be given for all times to come as the circumstance of the present case is quiet distinct. – The writ petition is manifestly not instituted to show any bona fide from any remote corner but only to some how stall further action of the respondent no.3 showing a bald desire to repay loan in instalmentas as may be directed by this court. – Possession Notice issued under Sections 4 and 12 of Section 13 read with Rule 8 (1) and the demand notice dated 4.2.2019 issued under Section 13 (2) of the SARFAESI Act do not suffer from any error or irregularity, which may require any interference, hence we are not inclined to exercise our extraordinary jurisdiction. –
Result:Writ Petition Dismissed
JUDGMENT :
1. Heard the learned counsel for the petitioner Sri Birendra Singh, Sri S. Singh, learned counsel appearing on behalf of the respondent no. 3 and the learned Standing Counsel appearing on behalf of respondent nos. 1 and 2.
2. The instant petition has been filed invoking extraordinary jurisdiction of this court under Article 226 of the Constitution of India with the following prayer;
"I. Issue a writ, order or direction in the nature of certiorari quashing the Possession Notice dated 13.3.2020 and Demand Notice dated 4.2.2019 issued by the respondent no.3 (Annexure No. 1 and 2 to the writ petition).
2. Issue any other suitable writ, order or direction, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.
3. Award cost of the petition to the petitioner."
3. The proceedings initiated against the petitioner by issuing Demand Notice under Section 13 (2) dated 4.2.2019 and Possession Notice dated 13.3.2020 under Section 13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for the sake of brevity hereinafter referred to as 'SARFAESI Act” read with Rule 8 of Security Interest (Enforcement) Rules, 2002. The aforesaid proceeding has been initiated in exercise of power conferred under Sub Section 12 of Section 13 read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 on failure of repaying the loan amount.
4. The contention of the learned counsel for the petitioner is that the petitioner is a private Limited Partnership Company incorporated on 8.7.2016 under the Companies Act 2013, which is carrying out business of importing and exporting, preparing, mining, cutting, polishing and processing for all types of marble and granite and other building materials. For establishment of the unit, which is situated over Khata No.114, Khasara No. 141 in Mauja Ghaskata, Tehsil Kheragarh, district Agra the partners of the petitioner applied for the loan and mortgaged the aforesaid property with the respondent no. 3 Bank of Maharashtra. The Bank granted loan of Rs. 45,00,000/- as a term loan and Rs. 15,00,000/- as cash credit limit, total amounting to Rs. 60,00,000/- in the year 2017. An order was passed on 15.10.2018 by the Regional Officer, U.P. Pollution Control Board, after inspecting the unit on 20.9.2018 that it was being run without obtaining NOC and consent of Air and Water from Pollution Control Board and that the unit comes within the limit of Taj trapezium zone. As closure order was passed on 15.10.2018 the business activities of the unit have been closed as a result of which the deposit of regular instalment of the loan could not be made. However from 15.2.2019 till 30th September 2019 the instalment of the loan amount was paid. The respondent no. 3 has issued the impugned demand notice dated 4.2.2019 under Section 13 (2) of the SARFAESI Act. The possession notice was never served upon the petitioner nor any partners or representatives of the petitioner. The notice was only pasted at the main gate of the unit on the basis whereof the partner of the petitioner came to know about the proceeding initiated under the aforesaid Act.
5. The learned counsel for the petitioner further contended that even no opportunity of hearing was afforded to the petitioner after the issuance of the impugned demand notice dated 4.2.2019 issued under Section 13 (2) of the SARFAESI Act only showing the reason that due to failure to adhere to the terms and conditions and had made default hence the account has been classified by the Bank as NPA on 31.1.2019. However, after the demand notice the petitioner has deposited the loan amount from 15.2.2019 uptill 30.9.2019. As the unit was closed due to the closure order the regular instalment of the loan amount could not be paid thereafter. The respondent no. 3 further proceeded arbitrarily by issuing possession notice dated 13.3.2020 under Section 13 (4) read with Rule 8 of the SARFAESI Act/Rules, 2002.
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