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UJJAL BHUYAN, CHILLAKUR SUMALATHA
Tandra Impex Pvt. Ltd. – Appellant
Versus
Punjab National Bank – Respondent
ORDER :
Ujjal Bhuyan, J.
Heard Mr. V. Murali Manohar, learned counsel for the petitioners and Mr. Muddu Vijay, learned counsel for the respondent.
2. By filing this writ petition under Article 226 of the Constitution of India, petitioners seek quashing of the decision of the respondent dated 31.03.2020 classifying the loan account of the petitioners as Non-Performing Asset (NPA) and further seek quashing of demand notice dated 31.07.2020 issued by the respondent under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly referred to hereinafter as the ‘SARFAESI Act’).
3. It is stated that first petitioner is a company of which petitioner No.2 is a Director. Petitioner No.1 is a Micro, Small and Medium Enterprise (MSME) carrying on business of trading in stone and granite blocks. Petitioner No.1 had availed cash credit facilities from the respondent in September, 2019. Repayments were made in the form of installments and the last installment was paid on 29.02.2020. However, because of the outbreak of COVID-2019 pandemic and the resultant lock down, petitioner No.1 defaulted in repayment. Consequently, responden
The legislative intent to prevent judicial or quasi-judicial intervention at the stage of issuance of demand notice under Section 13(2) of the SARFAESI Act.
Borrowers have remedies under Section 13(3A) and Section 17 of the SARFAESI Act, 2002 to challenge NPA classification and appeal actions taken by the bank.
Classification of an account as NPA under SARFAESI Act is not subject to judicial review and requires the borrower to seek recourse through statutory appeal under Section 17.
The High Court should not adjudicate on the classification of NPA, and recovery proceedings should not be halted by exercising power under Article 226 of the Constitution of India.
The SARFAESI Act prevails over the MSME Act, and the classification of accounts as NPA is not justiciable at the stage of objection rejection under Section 13(3A).
The classification of loan accounts as NPAs and the subsequent actions taken by the bank are not justiciable at the writ stage, and the petitioners should avail the remedy under Section 17 of the SAR....
The statutory scheme of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act, 2002) does not provide for a legal remedy until the Section 13(4....
Point of Law - Section 13 of the SARFAESI Act deals with enforcement of security interest. Sub-section (2) provides for issuance of notice by the secured creditor to the borrower for discharge of lia....
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