Point of law: If a particular case falls in the exceptions carved out and there are no disputed questions of facts arising for consideration, it is not necessary to relegate the parties to avail the alternative remedy and there is no bar for entertaining a writ petition and granting relief, if the party approaching this court is aggrieved by the arbitrary action of the other party.

ORDER :

T. Vinod Kumar, J.

1. This writ petition is filed assailing the action of the respondent bank in issuing demand notice dated 23.01.2020 under Section 13(2) and possession notice dated 24.09.2020 under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the SARFAESI Act'), as being illegal, arbitrary, violative of principles of natural justice and contrary to the provisions of the SARFAESI Act and the Rules made thereunder.

2. Heard learned counsel for the petitioners and Sri A. Krishnam Raju, learned counsel appearing for the respondent bank.

3. It is contended that the 5th petitioner is in the business of buying, selling and manufacture of gold jewelry, and had availed credit facility in the form of financial assistance and other facilities from the respondent bank. Initially the credit facility was availed by the 5th petitioner in the year 2008 in a sum of Rs. 35 crores and having regard to the regularity in repayment, the respondent bank enhanced the said financial facility over a period of time by periodical renewal and stood at Rs. 80 Crore as on 01.03.2018. In respect of such financial facility extended, 1st to 4th petitioners stood as guarantors. The said credit facility extended to the 5th petitioner was secured by creating mortgage of gold and jewelry; mortgage of immovable properties by the 1st to 4th petitioners by deposit of title deeds and equitable mortgage. The value of the assets of the petitioners which are secured for the financial facility of Rs. 80 crore extended are worth over Rs. 120 crores. It is contended that though the respondent bank during the year 2018-19 had reduced the limit of financial assistance extended to Rs. 65.00 crores, the assets secured remained the same and the value of such secured assets of the petitioners are worth more than double the financial facility extended to the 5th petitioner.

4. It is further contended that the 5th petitioner made regular payments towards its account till 31.03.2019; its only due to untimely seizure of assets by the Enforcement Directorate (ED) in April, 2019, the 5th petitioners business activities were shut down and the bank accounts frozen and as such no fault can be attributed either to the 5th petitioner or its director who stood as guarantors to the financial assistance extended. The respondent bank was fully aware of the various proceedings pending before the Appellate Authority against the proceedings initiated by the ED authorities, as the respondent bank is also a party in all the said proceedings. Further, as the respondent bank has adjusted the Fixed deposit of Rs. 1.51 crore as on 31.12.2019 by exercising right to set off, the 5th petitioner account became regular account. Thus, the respondent bank could not claim that the 5th petitioner account as having become Non Performing Asset (NPA) much less from 29.05.2019 as claimed in Notice dated 23.01.2020 issued under Section 13(2) of the SARFAESI Act. It is also contended that the action of the respondent bank in classifying the 5th petitioner account as NPA within 60 days is contrary to the norm of 90 days prescribed by Reserve Bank of India (RBI). Since, classifying the 5th petitioner account as NPA and issuing notice u/s. 13(2) of the SARFAESI Act, being invalid, the subsequent notice dated 24.09.2020 issued u/s. 13(4) is also invalid and both the proceedings have been issued in a mechanical manner.

5. In the course of arguments, though no plea is taken in the affidavit, it is contended that the 5th petitioner, upon being issued with arrangement letter dated 01.03.2019 reducing the existing sanctioned limit of Rs. 65.00 crores to Rs. 55.00 crores by the respondent bank, has addressed letter dated 12.03.2019 for phased reduction of the sanctioned limit over a period of one year and also gave two proposals therein in relation to the reduction of limits and sought for favourable consideration of the same by the r