LINGARAJ OIL INDUSTRIES PVT. LTD. v. STATE BANK OF INDIA
2009-02-17
B.S.CHAUHAN, I.MAHANTY
body2009
DigiLaw.ai
JUDGMENT : I. Mahanty, J. - This Writ Petition has been filed seeking the following relief: A) For quashing the notice dated 26.4.2008 vide Annexure-5 and the reply dated 9.7.2008, vide Annexure-8. B) To declare the consequential action on the basis of the impugned notice vide Annexure-5 as illegal and arbitrary. C) To restrain the Opp. Parties/SBI from taking action against the Petitioners in view of the statutory bar u/s 22 of SICA. 2. The facts and circumstances giving rise to the case in brief are that the Opposite Party - Bank had sanctioned a cash credit loan in November, 1997 to the Petitioner - company to the tune of Rs. 3.80 crores and the term loan Rs. 1.315 crores. The amount was not paid as per the terms of the agreement and thus vide letter dated 11.02.2002 the loan was recalled. Immediately thereafter Petitioner-company tried to registered with the Board for Industrial and Financial Reconstruction (BIFR) vide case No. 159 of 2002 on 3.4.2002, but the said case was dismissed being time barred. The Opposite Party - Bank filed O.A. No. 21 of 2002 before the Debts Recovery Tribunal (DRT) on 11.04.2002. The DRT vide Order Dated 24.5.2002 stayed the proceeding of recovery due to pendency of the proceeding u/s 15(1) of the Sick Industrial Companies (Special Provision) Act, 1985 (hereinafter called 'the SICA'). Reference u/s 15 of the SICA registered with BIFR on 26.11.2002. The Opposite Party - Bank issued notice u/s 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter called the Securitisation Act') on 28.02.2003:, Petitioner-company claims to have submitted his reply u/s 13(3) of the Securitisation Act on 14.04.2003, which was rejected by the Bank. Being aggrieved Petitioner-company preferred W.P.(C) No. 4436 of 2003 before this Court challenging the notice u/s 13(4) of the Securitisation Act dated 28.2.2003. This Court admitted the Writ Petition and passed an interim order on 25.5.2003. Thereafter, the BIFR declared the unit as sick vide Order Dated 29.9.2005. On 27.4.2006 this Court disposed of the said W.P.(C) No. 4436 of 2003 directing the DRT to-proceed with O.A. No. 21 of 2002 expeditiously. Subsequent thereto, the BIFR directed for winding up the unit vide Order Dated 31.8.2006. Petitioner-company filed appeal No. 275 of 2006 before the AAIFR.
Thereafter, the BIFR declared the unit as sick vide Order Dated 29.9.2005. On 27.4.2006 this Court disposed of the said W.P.(C) No. 4436 of 2003 directing the DRT to-proceed with O.A. No. 21 of 2002 expeditiously. Subsequent thereto, the BIFR directed for winding up the unit vide Order Dated 31.8.2006. Petitioner-company filed appeal No. 275 of 2006 before the AAIFR. The appeal was allowed vide Order Dated 11.2.2008 remanding the matter back to the BIFR for fresh consideration. The present Writ Petition is being filed challenging the fresh notice u/s 13(2) of the Securitisation Act dated 26-4.2008 (Annex.-5) issued to Petitioner-2 - guarantor and for quashing the reply to the objections submitted by the Opposite Party - Bank dated 9.7.2008 (Annex.-8). 3. Shri Pitambar Acharya, Learned Counsel appearing for the Petitioners submitted that as the matter is pending before the BIFR and the unit has been declared sick, the Opposite Party-Bank or DRT cannot make any recovery either against the company or the guarantor. 4. On the other hand Shri D.P. Sarangi, Learned Counsel appearing for the Bank vehemently opposed the petition contending that no such protection is available in law and merely because the industry become sick, it cannot submit that it is not liable to pay the loan and even if such a protection is available to the company being sick, such protection cannot be granted to the guarantor. 5. The matter has been heard several times at length. This Court has granted interim relief vide Order Dated 11.02.2009 and the protection granted by the interim order is available to the Petitioner No. 2, who is the Director of the Company happens to be the guarantor. Shri Acharya had earlier taken time to clarify the legal position, particularly, in view of the law laid down by the Hon'ble Supreme Court in Kailash Nath Agarwal and Others Vs. Pradeshiya Industrial and Investment Corporation of U.P. Ltd. and Another. Today, when the matter has come up for hearing, Shri Acharya straight away submitted that his case may be restricted exclusively to the company and he does not want to press relief against the guarantor.
Pradeshiya Industrial and Investment Corporation of U.P. Ltd. and Another. Today, when the matter has come up for hearing, Shri Acharya straight away submitted that his case may be restricted exclusively to the company and he does not want to press relief against the guarantor. At this juncture, the question does arise as to whether the petition, in the manner it has been filed, is maintainable granting protection only to the company, as the matter under challenge is the notice dated 26.4.2008 (Annex.-5), which is a notice to the guarantor and not to the company. The second relief sought is for quashing the reply given by the Bank in reply to the notice dated 26.4.2008 (Annex.8).The relief restricted by Shri Acharya is only in favour of the company and not in favour of the guarantor. 6. It is the settled proposition of law that an order which is not the part of the record cannot be quashed by the Court, vide Surinder Singh Vs. Central Government and Others, . 7. In view of the above fact that there is not a single document on record pertaining to the company directly for recovery and the demand notice etc. as has been produced is not to the company. More so, even if it is assumed that notice dated 26.4.2008 (Annex.8) is treated as an order u/s 13(3) of the Securitization Act, it is no one's case that the Opposite Parties -have passed any order u/s 13(4). Thus, on that count, petition seems to be premature. Therefore, we are of the view that the Writ Petition is not maintainable as to relief restricted in favour of the company. The petition is accordingly dismissed. B.S. Chauhan, C.J 8. I agree. Final Result : Dismissed