Point of Law : It is well-settled that the jurisdiction exercised by the High Court under Article 226 of the Constitution of India is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the writ court must come with clean hands and put forward all facts before the Court without concealing or suppressing anything.

JUDGMENT :

Ujjal Bhuyan, J.

This order will dispose of W.P.Nos.23067 of 2019, 27138 of 2019 and 22195 of 2021.

1. We have heard Sri M. Laxmi Prasad, learned counsel appearing on behalf of Smt. Ch. Vedavathi, learned counsel for the petitioner and Sri Maruthi Jadhav, learned counsel appearing for Pearl Law Associates for the respondents.

2. In W.P.No.23067 of 2019 the prayer made is to set-aside the notice dated 08.01.2018 issued by the respondent State Bank of India (SBI) under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly, ‘the SARFAESI Act’ hereinafter). Petitioner in W.P.No.27138 of 2019 has sought for quashing of letter dated 22.11.2019 issued by the respondent/SBI stating that petitioner is not entitled to the benefit of one time settlement (OTS) scheme and further seeks a direction to the respondent/SBI to grant the benefit of OTS scheme to the petitioner in terms of the Circular of SBI dated 13.08.2019.

3. In the later Writ Petition i.e., W.P.No.22195 of 2021 the prayer made is for a declaration that respondent No.1 i.e., Debts Recovery Tribunal-I, Hyderabad would not have the jurisdiction to entertain an Original Application under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 (briefly “the 1993 Act” hereinafter), if respondent No.2 had first initiated proceedings under the SARFAESI Act.

4. Case of the petitioner is that it is a proprietary concern having its office and place of business at Bengaluru in the State of Karnataka.

5. Petitioner had availed a loan of Rs.5,00,00,000.00 from the second respondent i.e., SBI, Hoskote SME, Bengaluru Rural on 30.05.2015 for its real estate business. It is stated that the said amount was repayable in 36 monthly installments but with a moratorium period of 12 months from the date of sanction of the loan. The moratorium period was subsequently extended for another 10 months and thereafter by another six months. Notwithstanding the same, petitioner was repaying the loan amount regularly.

6. Respondent/SBI had issued notice dated 08.01.2018 under Section 13 (2) of the SARFAESI Act whereby petitioner was informed that its loan account was declared as non-performing asset (NPA) with effect from 29.12.2017.

7. It is this notice dated 08.01.2018 issued by the respondent/SBI under Section 13 (2) of the SARFAESI Act which is under challenge in W.P.No.23067 of 2019. The challenge has been made on the ground that the said demand notice was bereft of any details. Respondent/SBI did not follow the Reserve Bank of India (RBI) guidelines regarding classification of loan account as NPA. As such, classification of the loan account of the petitioner as NPA is arbitrary and illegal. Respondent/SBI acted hastily in issuing the notice under Section 13 (2) of the SARFAESI Act without waiting for the period of two years thirty days from the date of first default to expire. Therefore, respondent/SBI illegally and erroneously assumed jurisdiction under Section 13 (2) of the SARFAESI Act.

8. Thereafter respondent/SBI issued notice dated 16.04.2018 and again on 29.05.2018 under Section 13 (4) of the SARFAESI Act. Petitioner had paid an amount of Rs.25,00,000.00 by way of cheque on 15.02.2019 along with a proposal for OTS. Respondent/SBI encashed the cheque for the aforesaid amount whereafter the possession notices were subsequently withdrawn on 19.02.2019.

9. While representation of the petitioner dated 05.10.2019 for OTS was declined by respondent/SBI on 08.10.2019, subsequent representation of the petitioner dated 16.10.2019 for re-consideration of the OTS proposal was pending consideration.

10. In the meanwhile, petitioner came to know that e-auction notice was issued by respondent/SBI on 26.09.2019 proposing to auction sale the mortgaged movable and immovable assets (schedule properties) of the petitioner on 23.10.2019.

11. It is in such circumstances, the petitioner has been compelled to approach the High Court under