J U D G M E N T

PURUSHAINDRA KUMAR KAURAV, J. (ORAL)

1. Heard learned counsel appearing for the parties on application CM APPL. 1648/2023 seeking a vacation of the stay order dated 19.09.2022.

2. Learned counsel appearing for respondent-bank states that, the instant petition is not maintainable against an order declaring the petitioner a Non- Performing Asset (in short, ‘NPA’). He submits that on the first date of hearing i.e., on 19.09.2022, this court granted an ex-parte stay restraining the respondent-bank from proceeding further with the declaration of the petitioners' assets as NPA, which were already classified as NPA on 29.07.2022. According to him, after taking steps as per Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, ‘the SARFAESI Act, 2002’), the further course of action is provided under the statute itself, and the petitioner was required to approach the concerned bank, making the representation or raising a grievance that was required to be considered by the respondent- bank. He states the petitioner cannot be allowed to halt the proceedings at the stage of section 13(3) of the SARFAESI Act, 2002, itself. While placing reliance on the decision of the Hon’ble Supreme Court in the case of Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir1 he submits that the stay granted by this court vide order dated 19.09.2022, deserves to be vacated. While seeking dismissal of the instant petition, learned counsel has also pointed out that if the averments made in the stay vacation application are pursued, the same would clearly indicate that the petitioner has never

1(2022) 5 SCC 345

made any representation pursuant to an action under Section 13(2) of the SARFAESI Act, 2002.

3. Learned counsel for appearing for the petitioner opposes the aforesaid submission and he stated that the instant writ petition is maintainable and the writ court can still examine the aspect as to whether the petitioner has rightly been treated while declaring his account as NPA. According to him, there are various anomalies, and had the petitioner been put on notice, the petitioner would have clarified that there arises no necessity to proceed under the provisions of the SARFAESI Act, 2002. He, therefore, states that not only the Hon’ble Supreme Court in the case of Phoenix Arc (supra) has clearly held that in appropriate cases the writ court can still entertain the writ petition, but the High Court of Calcutta in the case of The Fabworth Promoters Private Limited and Ors. v. Reserve Bank of India and Ors.2 in Paragraph No. 25, thereto, has under similar circumstances, held that the remedy under writ jurisdiction is discretionary and can be granted by the writ court in the appropriate cases to do justice, which is based on the principle of equality. According to him, the High Court of Calcutta has entertained the writ petition even prior to any actions under section 13(4) of the SARFAESI Act, 2002, and, therefore, he states that the submission made by the respondent-bank is not correct to contend that the writ petition itself is not maintainable.

4. I have heard the submission made by the learned counsel appearing for the parties and perused the record.

5. Section 13 of the SARFAESI Act, 2002 is reproduced as under:

13. Enforcement of security interest.-

2MANU/WB/0676/2021

(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882 ), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act.

(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non- performing asset, then, the secured credit