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2008 DIGILAW 197 (CAL)

Aliroma Chemicals Pvt Ltd v. Allahabad Bank

2008-02-15

PRADEEP NANDRAJOG

body2008
Judgment (1.) CHALLENGE in the writ petition is to the notice dated 21.8.07 issued by Allahabad Bank (hereafter the Bank) under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter the said Act) basically on the grounds that the notice lacks transparency, it does not disclose material particulars thereby disabling the petitioners to lodge an effective objection, the security interest sought to be enforced by the Bank does not exclusively belong to it and that the action of the bank is barred by the laws of limitation as also Section 36 of the said Act. (2.) THE writ petition was moved on notice to the Bank before a learned Judge of this Court on 5.12.07. While calling for affidavits, the learned Judge by an interim order stayed the operation of the impugned notice for a limited period. The petitioner was also restrained from encumbering the property any further. (3.) BY filing G. A. No. 3813 of 2007, the Bank has prayed for vacating the interim order by which operation of the impugned notice was stayed. (4.) WHILE hearing the application for vacating interim order, learned Counsel for the parties argued the writ petition itself and consented to disposal of the writ petition at this stage treating the application for vacating interim order as the counter affidavit of the Bank to the writ petition and the counter thereto filed by the petitioners as their rejoinder. This Court has heard learned Counsel for the parties and has perused the materials placed before it. (5.) IT is settled law that a Court of Writ would not ordinarily interfere at the stage of show-cause unless of course the Court is satisfied that it is totally non-est in the eye of law for absolute want of jurisdiction. Whether or not the show cause notice is founded on any legal premises is a jurisdictional issue which can even be urged by the recipient of the notice and such issues can also be adjudicated by the authority issuing the very notice initially before one who is aggrieved could approach the Court [see (2006) 3 SCC 440 : Special Director vs. Mohd. Ghulam Ghouse]. Ghulam Ghouse]. (6.) ON the basis of the materials placed on record, this Court finds that there was no proper objection lodged by the petitioner to the notice issued under section 13 (2) of the said Act availing of the opportunity provided by Section 13 (3a) thereof. At the same time, it is also found that the Bank has made a mess of figures in the application for vacating interim order and to clear such mess has filed a supplementary affidavit. Mr. Chowdhury, learned Counsel for the Bank, while being unable to account for the discrepancies conceded that the writ petition may be disposed of by granting liberty to the petitioners to file an objection against the notice issued under Section 13 (2) of the said Act and the bank may be granted liberty, thereafter, to proceed in accordance with law. (7.) THIS Court on the basis of its appreciation of the notice issued under section 13 (2) of the Act, at this stage, is not minded to hold that the notice is a nullity. Undisputedly, the petitioners obtained loan from the Bank and have failed to repay it. The Government of West Bengal has been trying to revive the small scale unit of the petitioners by granting loan. It also holds a charge on the property of the petitioners. Whether in such circumstances the Bank was at all justified in issuing the notice under Section 13 (2) of the said Act can well be urged by the petitioners in the event a proper objection is lodged by them in response thereto. This Court finds the suggestion of Mr. Chowdhury to be fair and reasonable. When the petitioners have the right of lodging objection under section 13 (3a) of the said Act and the Bank is under a corresponding duty to consider the objection fairly, reasonably and on merits, this Court is disinclined to decide at this stage as to whether the Bank could have issued the impugned notice. (8.) ACCORDINGLY, the writ petition along with the vacating application stand disposed of by granting liberty to the petitioners to lodge an appropriate objection against the notice issued under Section 13 (2) of the said Act within a fortnight from date. Upon receipt of such objection, the bank shall proceed to consider and dispose of the same strictly in accordance with law. Upon receipt of such objection, the bank shall proceed to consider and dispose of the same strictly in accordance with law. Till such time the objection is decided, the Bank shall not take any coercive step against the petitioners. In the event, however, no objection is lodged by the petitioners availing of liberty granted by this order, the Bank shall be entitled to proceed according to law. (9.) BE it recorded that this Court has not decided any of the points raised by the petitioners in this petition on merits and the same are left open for being urged before the Bank. There shall be no order for costs.