The court held that a reference under the Sick Industrial Companies Act abates when secured creditors, representing three-fourths of the debt, act under the SARFAESI Act, affirming that jurisdictional challenges must be resolved through statutory remedy.

1. These two writ petitions filed by the same petitioners have been heard together and are being decided by this common judgment. Counter and rejoinder affidavits have been exchanged in Writ Petition No. 48250/2013, which is being treated as leading writ petition.

2. Brief facts giving rise to both the writ petitions are: The petitioner No.1 is a registered company under the Companies Act, 1956, and has been carrying out its activities since 1995. The petitioners' company suffered heavy losses in the financial year 2008-09 and 2009-2010. A reference under S.15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter called the "Act, 1985") was made by the petitioners Company before the Board for Industrial and Financial Reconstruction (hereinafter called the "BIFR") in the Month of October, 2010. The reference was registered as BIFR Case No. 53/2010. The Board proceeded with the reference and called for certain information and in its proceedings dated 12/12/2011 recorded that the company has become a sick industrial company under S.3(1) (o) of the Act, 1985. A direction was issued for preparation of Draft Rehabilitation Scheme for the company. The State Bank of Bikaner and Jaipur was appointed as Operating Agency under S.17 (3) of the Act, 1985 who were to prepare a Draft Rehabilitation Scheme. Draft Rehabilitation scheme claims to have been prepared in the month of December, 2012. The petitioners' company was granted various credit facilities by way of financial assistance by consortium of banks. The consortium of banks appointed the State Bank of Bikaner and Jaipur as their Lead Bank for all legal proceedings. The consortium of banks issued a notice dated 01/8/2012, under S.13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter called the "Act, 2002") to the petitioners to discharge in full all liabilities to the consortium of banks within 60 days. The liability owing to the consortium of banks as on 31/5/2012 was mentioned in the notice as Rs.201,90,00,254.45/- (Rupees Two Hundred One Crores Ninety Lakhs Two Hundred Fifty Four and Paisa Forty Five Only). The petitioners having failed to discharge their liabilities within 60 days from the receipt of the aforesaid notice issued under S.13(2) of the Act, 2002, the Bank invoked power under S.13 (4) of the At, 2002 and issued a possession notice dated 12/10/2012. The petitioners filed Writ Petition No. 6853/2013 on 05/2/2013 praying for following reliefs:
"i) Issue, a writ, order or direction in the nature of certiorari quashing the impugned consortium notice dated 1/8/2012 under S.13(2) SARFAESI Act send by respondent No. 2 and consequential recovery proceedings against the petitioner (Annexure - No. 3) of the writ petition.
ii) Issue, a writ, order or direction in the nature of mandamus staying recovery proceedings in pursuance to the impugned notice dated 1/8/2012 during pendency of present writ petition before this Hon'ble Court.
iii) issue any other writ, order or direction which this Hon'ble Court may deem fit and proper under the facts and circumstances of the case."

3. On a request made by the learned counsel for the petitioners the above case was directed to be listed in the next cause list and no other orders were passed in the said writ petition. An application dated 26/12/2012 was filed by the Bank before the BIFR which was registered as Misc. Application No. 103/2012 praying that a direction be issued by the BIFR that proceedings bef