JUDGMENT

Petitioners had borrowed from a consortium of two banks and created separate security interests favouring those banks. The steps initiated to enforce the security interest are under challenge in this writ petition filed under Article 226 of the Constitution of India.

2. When petitioners raised the question of the authority of the banks to enforce the security interest in the manner proceeded with, respondents questioned the maintainability of the writ petition under Article 226 of the Constitution of India. Both questions raise issues of significance.

3. The issues arise from a loan granted by a consortium of two banks - the Canara Bank and the Punjab National Bank, to the first petitioner. Though the initial sanction for the loan was Rs.180 crores, it was enhanced to Rs.200 crores and later pruned down to Rs.190 crores. The first petitioner thus borrowed an amount of Rs.190 crores from the respondents.

4. Subsequently, when respondents noticed diversion of transactions through other banks, contrary to the agreements, notices were issued reminding the defaults. Thereafter, at the request of the petitioners, restructuring of the loan was carried out. Later, when the amounts fel