THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment delivered on: 22.08.2007

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WP(C) No.1508/2007

SHRI RAJAN GUPTA

...Petitioner

- versus -

BANK OF INDIA AND ANOTHER

...Respondents

With

WP(C) No.1592/2007

ASHA SINGLA

...Petitioner

- versus -

BANK OF INDIA AND ANOTHER

...Respondents

And

WP(C) No.23014/2005

KAMAL GUPTA

...Petitioner

- versus -

BANK OF INDIA

...Respondent

Advocates who appeared in this case:

For the Petitioners

: Mr A.K. Singla, Sr Advocate with Mr Pankaj

Gupta and Ms Promila Dhar

For the Respondents

: Ms Manjula Gandhi with Ms Neeru Sharma

CORAM:-

HON'BLE MR JUSTICE BADAR DURREZ AHMED

2007:DHC:975

1.

Whether Reporters of local papers may be allowed

to see the judgment ?

Yes

2.

To be referred to the Reporter or not ?

Yes

3.

Whether the judgment should be reported in Digest ?

Yes

BADAR DURREZ AHMED, J

1.

These three petitions raise common issues and were,

therefore, heard together and are being disposed of by this common

judgment. The issue is with regard to the meaning of the word

“borrower” as appearing in Section 13 (2) of the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Interest

Act, 2002 (hereinafter referred to as 'the said Act').

2.

According to the petitioners, the word “borrower” as

appearing in the said Section 13 (2) and as defined in Section 2 (f) of the

said Act cannot extend and does not extend to include legal

representatives of the original borrower. According to them, the

expression relates only to the persons who took the loan or who were

guarantors for the loan. It does not extend to their heirs or successors or

legal representatives.

2007:DHC:975

3.

On the other hand, the learned counsel for the respondents

contends that the expression “borrower” not only includes the persons

who originally took the loan or the persons who originally stood

guarantee, but also their legal representatives and heirs.

4.

The present controversy is in connection with financial

assistance to the extent of Rs 650 lacs taken by ROM Industries Limited

from the respondent [Bank of India] for opening import letters of credit.

One Smt. Parvati Devi, amongst others, stood guarantee for the said

financial assistance. She also allegedly created an equitable mortgage in

respect of her immovable property situated at 16/73, Punjabi Bagh, New

Delhi. In October, 1996, the account of M/s ROM Industries Ltd was

declared as a Non-Performing Asset (NPA) by the Bank of India. On

19.08.2000, the said Smt. Parvati Devi passed away. In November,

2003, the Bank of India filed a recovery application [OA 91/2003] in

respect of the said loan before the Debts Recovery Tribunal. Although,

Smt. Parvati Devi had already expired on the date on which the said

application was filed, she was named as a party. Subsequently, on

04.12.2003, an amendment was sought to implead her legal

representatives which include her son [Girdhari Lal Gupta] and daughter

2007:DHC:975

[Asha Singla] amongst others. The said Girdhari Lal Gupta also passed

away on 02.05.2004 and his legal representatives which include Kamal

Gupta and Rajan Gupta were substituted. The said Kamal Gupta and

Rajan Gupta are the sons of Late Shri Girdhari Lal Gupta. The present

writ petitions have been filed by the said Asha Singla, Kamal Gupta and

Rajan Gupta who are all legal representatives, directly or indirectly, of

Late Smt. Parvati Devi. On 05.10.2005, the respondent [Bank of India]

also issued notices under Section 13 (2) of the said Act against, inter

alia, the petitioners in their capacity as legal heirs of Smt. Parvati Devi.

Since these petitions are essentially directed against the issuance of the

said notice dated 05.10.2005 and the invocation of provisions of Section

13 (2) of the said Act, it would be appropriate if the relevant portions of

the said notice are set out