IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH

CWP-435-2022

Reserved on: 20.07.2022

Date of Decision:03.08.2022

Kotak Mahindra Bank Ltd.

. . . . Petitioner

Vs.

The District Magistrate and another

. . . . Respondents

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CORAM:

HON9BLE MR JUSTICE M.S. RAMACHANDRA RAO

HON9BLE MR JUSTICE H.S. MADAAN

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Present: -

Mr.Manish Jain, Advocate, Mr. Mayur Kanwar, Advocate, and

Mr.Siddhant Jain, Advocate, for the petitioner.

Mr.Vaibhav Sharma, Advocate, for respondents No.2(ii) & 2(iv).

Mr.Sandeep Vermani, Addl. A.G., Punjab.

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M.S. RAMACHANDRA RAO, J.

Backgrounds of the case

This Writ Petition is filed by the petitioner-Bank to quash the

order dt.15.12.2021 passed by the District Magistrate, Ludhiana ( respondent

No.1) rejecting petitioner9s request to pass orders under Section 14 of the

Securitisation and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002 [for short 8the SARFAESI Act9] for delivery of

possession of a secured asset owned by respondent No.2 and also mortgaged

by him to the petitioner-Bank.

M/s Oswal Spinning and Weaving Mills limited ( for short 8the

Company9) had been granted certain credit facilities by UCO Bank and other

financial institutions. In order to secure the credit facilities sanctioned, the

Company created security interest by way of creation of mortgage in favor of

the lenders on it9s moveable and immoveable assets. The said financial

VIVEK PAHWA

2022.08.04 11:48

I attest to the accuracy and

integrity of this document

facilities were also secured by the Personal guarantees of respondent No.2

Raj Pal Oswal and 2 others.

On

account

of

continuous

defaults

made

by

the

Company/Guarantors/Mortgagors to discharge the dues, the lenders classified

the account of the Company as NPA.

The petitioner Bank acquired the debts/debentures of the lenders

under 6 deeds of assignment/transfer dt.6.11.2007 and these assignments

were confirmed by the Company and the Guarantors vide Letter of

Acceptance dt.26.12.2007.

Pursuant to the assignment of debts/transfer, the petitioner also

extended financial facilities to the Company and the Company created a

charge on it9s moveable and immoveable properties for securing the financial

facilities assigned in favor of the petitioner Bank. The said financial facilities

were also secured additionally by personal guarantees of respondent No.2 and

others.

But on 17.12.2013, the accounts of the Company were declared

as NPA by petitioner. So it issued notice dt.4.4.2014 under Section 13(2) of

the SARFAESI Act to the Company and guarantors including respondent

No.2. calling upon them to pay 63,42,83,420.68 as on 04.04.2014 together

with interest on contractual rates from 05.04.2014 till payment and/or

realization.

Objections to the said notice were filed by the Company and Raj

Pal Oswal ( respondent No.2) on 29.05.2014 and were also replied by the

petitioner on 16.06.2014/25.8.2014 and the amount claimed was modified as

Rs.63,37,21,410/-.

VIVEK PAHWA

2022.08.04 11:48

I attest to the accuracy and

integrity of this document

The Company filed CWP-10957-2014 before this Court to set

aside the notice dt.04.04.2014 issued to it under Section 13(2) of the

SARFAESI Act. The said Writ Petition was dismissed as withdrawn on

23.03.2015 with liberty to submit a representation. It then filed a Review

application No.160 of 2015 which was also dismissed on 01.04.2015.

The Company again filed CWP-13888-2015 challenging the

initiation of proceedings under the SARFAESI Act against the petitioner but

the same was dismissed on 11.04.2016 and Review Application No.256 of

2016 seeking review of the said order was also rejected on 16.09.2016. SLP

(Civil) No.7124/7125 of 2017 filed by the Company before the Supreme

Court was also withdrawn.