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2020 Supreme(MP) 1079
IN THE HIGH COURT OF MADHYA PRADESH
(DIVISION BENCH)
Sheel Nagu and Vishal Mishra, JJ.
Maa Peetambra Sugar and Power Limited v. Union of India
Writ Petition No.9893 of 2020 (G);
Decided on 21.12.2020*
Prashant Sharma for petitioner; Praveen Newaskar, Assistant Solicitor General of India for respondent/Union of India, Praveen Surange for respondents No.5, 6 and 7/Bank.
Headnote:
Securitisation and Reconsturction of Financial Assets and Enforcement of Security Interest Act, 2002 -- Ss.13(2), 13(4), 14 and 17 -- Micro Small and Medium Enterprises Development Act, 2006 -- S.10 -- Constitution of India -- Art. 226 -- petitioner/Company was sanctioned loan on 16.12.2015 -- further, financial assistance extended -- term loan also extended -- credit facilities secured by way of submission of title deeds of immovable properties -- petitioner failed to repay -- Bank classified laon account as non-performing asset -- issued notice -- obtained symbolic possession of mortgaged property -- petitioner challenged action of Bank in declaring loan account as non-performing asset -- seeking benefit undert Act, 2006 -- disputed questions of fact involved -- petitioner failed to challenge notice before Debt Recovery Tribunal -- Bank availed statutory remedy under Act, 2002 -- petitioner has remedy of appeal under Act, 2002 -- in limited writ jurisdiction, matter cannot be decided on merits. (2009)8 SCC 257 referred to. [Paras 11 to 13
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ORDER
1. Heard through video conferencing.
2. This petition under Article 226 of the Constitution has been filed praying for following relief :-
“(i) Declare the act of respondent bank of turning the petitioner's account as Non-performing Asset (NPA) as illegal and arbitrary; and/or
(ii) Declare all the consequential acts arising out of the declaration of the petitioner's account as NPA as null and void; and/or
(iii) Direct the respondent bank to refer the matter to the Corrective Action Plan (CAP) committee as per the mandate of framework for revival and rehabilitation of MSME's issued by the RBI on 17 March 2016 and adhere to the provisions of section 10 of MSMED Act, 2006; and/or
(iv) Direct the respondent to abide by the RBI guidelines with respect to lending to MSMEs; and/or
(v) Pass any other appropriate order as this Hon'ble Court may deem fit in the facts and circumstances.”
3. The principal contention of learned counsel for the petitioner is that respondent/Bank without extending the benefit due to the petitioner Company under the RBI guidelines and Micro, Small and Medium Enterprises Development Act, 2006 has acted in an arbitrary and irrational manner by declaring the loan accounts of petitioner to be Non-Performing Asset (NPA).
4. The brief facts unfolded are that the petitioner/Company on 16.12.2015 was sanctioned loan of Rs. 8,85,52,000/- for manufacturing jaggery and jaggery powder. Further, on 28.9.2017 financial assistance under the Union Green Card/Kisan Credit Card to the tune of Rs. 55,63,000/- was extended. The Bank also extended the term loan of Rs. 1,35,00,000/- and cash credit limit of Rs.5,40,00,000/- on 12.12.2017. The said credit facilities were secured by way of submission of title deeds by creation of equitable mortgage against five pieces of immovable properties.
5. The petitioner failed to repay the loan in terms of agreement which impelled the respondent/Bank to classify the loan account as NPA in terms of RBI guidelines on 30.4.2019.
6. Thereafter on 8.5.2019 the respondent Bank issued notice u/s. 13(2) of SARFAESI Act. The petitioner responded by letter dated 27.6.2019 seeking permission of the respondent Bank to sell a part of the mortgaged property for repaying the loan. By letter dated 26.9.2019 the Bank granted permission subject to the condition of depositing Rs.50,00,000/- within a month and the remaining amount of Rs.8,65,00,000/- within six months. When the said condition was not complied with in the given time period of six months, the Bank by letter dated 20.3.2020 reminded the petitioner Company of the said default since only Rs.61,50,000/- was deposited by the petitioner as against total dues of Rs.9,15,000/-. In response the petitioner Company by letter dated 25.3.2020 requested for extension of time for repayment of outstanding amount of loan within further six months by selling part of the mortgage property which the respondent Bank declined by letter dated 16.4.2020. Thereafter petitioner responded by letter dated 18.6.2020 that in case the permission sought by the petitioner for liquidating a part of the mortgaged property is not accorded then large number of farmers to whom the petitioner owes large sum of money for purchase of raw material, may stage an agitation. However, the respondent/Bank invoking the provision of section 13(4) of SARFAESI Act on 24.7.2020 obtained symbolic possession of mortgaged property.
7. Learned counsel for the respondent/Bank has further informed that presently the Bank has approached the District Magistrate Datia for invoking provision of section 14 of SARFAESI Act.
8. Learned counsel for the Bank Shri Surange also contends that the loan in question was sanctioned on 16.12.2015 whereas the petitioner manufacturing unit was registered under MSME Act on 1.3.2017 and thus the benefit under the said Act is not due to the petitioner. The financial assistance was not to a Micro, Small and Medium Enterprises but to a unit in agricultural sector.
