ORAL JUDGMENT

Date : 31.01.2022 (Per Hon’ble Mr. Justice Ahsanuddin Amanullah)

Heard Mr. Ponnari Bala Dastagiri, learned counsel for the petitioner and Mr. Bachina Hanumantha Rao, learned Standing Counsel for the respondents-Punjab National Bank.

2. The petitioner has moved the Court, for the following relief:

“….to issue an appropriate Writ order or direction more particularly one in the nature of Writ of Mandamus:

a) declaring the classification of the account of the Petitioner-

Sri Vamsee Krishna Traders with the account numbers 1) 4238008700001492 2) A.C.No 423800IL00000314 and 3 A C No 423800cf0000132 Credit facility of the Punjab National Bank, Gudavalli Vari Street, Besant Road Cross, Governerpet Branch, Vijayawada as NPA dated 31-03- 2021 to be illegal against to the guidelines issued by RBI against the interest norms of RBI without jurisdiction and against to the guidelines of revival and rehabilitation of MSME Scheme of the Government.

b) Consequentially quash and suspend the notice DATED

10.05.2021 issued by the 1st respondent under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Act)

c) Consequentially quash and suspend the notice dated

30.11.2021 issued by the 1st respondent under Section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Act), d) restrain the respondents by way of granting the order of stay from proceeding further concerning the account of the Petitioner-Sri Vamsee Krishna Traders with the account numbers 1) 4238008700001492 2) A.C.No 423800IL00000314 and 3 A C No 423800cf0000132 Credit facility of the Punjab National Bank, Gudavalli Vari Street, Besant Road Cross, Governerpet Branch, Vijayawada, in accordance with the provisions of the SARFAESI Act, till pending disposal of the writ Petition, e) and pass such other order or orders…..”

3. The loan account of the petitioner became NPA on 31.03.2021 and the respondents issued notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act’) on 10.05.2021. Thereafter, notice under Section 13 read with Rule 3 of the Security Interest (Enforcement) Rules, 2002 was issued on 30.11.2021.

4. The petitioner has challenged both the notices in the present writ petition.

5. Learned counsel for the petitioner submitted that the declaration of the account to be NPA is without following the requirement prescribed under the SARFAESI Act and further that the Hon’ble Supreme Court has also granted a moratorium against such declaration. In support thereof, learned counsel drew the attention of the Court to order dated 04.09.2021 of a Single Judge Bench of the Rajasthan High Court in Shiv Singh Versus Punjab National Bank (S.B. Civil Writ Petition No.9581 of 2021), for the proposition that the Hon’ble Supreme Court has also granted moratorium with regard to declaration of NPA w.e.f 23.03.2021 and only if the borrowers’ accounts become NPA after 90 days then alone the Bank or the Financial Institution would declare the account as NPA.

6. Learned counsel for the respondents submitted that that the conduct of the petitioner has not been bona fide as despite having a due of over Rs.72 lakhs, he has not shown any genuine desire to repay the loan.

7. Learned counsel for the petitioner submitted that he has been approaching the Bank and requesting them to restructure the loan but was given false assurances and now the respondents have taken action under the SARFAESI Act.

8. It was submitted that the petitioner has paid Rs.3,50,000/-, after the account having been declared NPA on the assurance given by the respondents that the loan would be restructured, but they have not kept their assurance.

9. Learned counsel for the respondents submitted that there was no such concrete p