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2011 DIGILAW 1430 (ALL)

Maa Shakum Bhari Synthetic Ltd. v. Canara Bank

2011-06-14

DEVENDRA KUMAR ARORA

body2011
Devendra Kumar Arora, J.:- Notice on behalf of opposite party has been accepted by Sri Vinay Shankar, Advocate. 2. By means of present writ petition, the petitioner has challenged the order dated 31.5.2011, passed by the Debt Recovery Tribunal, Lucknow in S. A. No. 268 of 2011, as contained in Annexure No. 4 to the writ petition by which application for interim relief was rejected by the Debt Recovery Tribunal. Petitioner also challenges the advertisement published by the respondent Bank in daily newspaper Dainik Jagaran it its edition dated 10.5.2011 in so far as the same relates to the auction of the properties of the petitioner company. Petitioner has also prayed for a writ of mandamus commanding the respondent bank not to proceed further in the matter of sale of the property situated at B-56, Sector 10, Noida, Gautam Budh Nagar till the decision of S. A. No. 268 of 2011, pending before the Debt Recovery Tribunal, Lucknow. 3. Submission of learned counsel for the petitioner is that no notice under sub section (2) of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'Act, 2002') was ever served upon the petitioner nor the same was affixed on the residence or on business place of the petitioner nor any paper publication of notice has been made by the respondent. The petitioner approached the Debt Recovery Tribunal by means of S.A. No. 268 of 2011 against the measure taken by the respondent Bank under section 13 (4) of the Act, 2002 alongwith the application for interim relief. The said application was rejected by means of the order dated 31.5.2011and fixed 25.8.2011 for further orders. In the meantime, the respondent Bank proceeded to auction the property of the petitioner-company and got published an advertisement in daily newspaper on 10.5.2011 fixing the last date for submission of the bids on 14.6.2011 and 15.6.2011 for opening of bids. 4. Learned counsel for the petitioner further submits that the petitioner has taken various grounds in his appeal before the Debt Recovery Tribunal which is yet to be adjudicated by the Tribunal and if in the meantime, the property of company is allowed to be auctioned, the pending appeal would be rendered infructuous causing serious prejudice to the petitioner. 5. 4. Learned counsel for the petitioner further submits that the petitioner has taken various grounds in his appeal before the Debt Recovery Tribunal which is yet to be adjudicated by the Tribunal and if in the meantime, the property of company is allowed to be auctioned, the pending appeal would be rendered infructuous causing serious prejudice to the petitioner. 5. A query was put to the learned counsel for the respondent as to whether any notice under section 13(2) of the Act, 2002 was served upon the petitioner. Learned counsel for the respondent drew attention of this Court towards page no. 126 of paper book of writ petition which is a part of counter affidavit filed by the respondent bank before the Debt Recovery Tribunal. A perusal of the same reveals that the notice was served upon M/s R.S.G. Softech Pvt. Ltd.. He has failed to show that any notice under section 13(2) of the Act, 2002 was served upon the petitioner. 6. Learned counsel for the petitioner submits that M/s R.S.G. Softech Pvt. Ltd. is a guarantor of the petitioner and as per requirement of Section 13(2) of the Act notice is to be served on each and every person involved in transaction. 7. Learned counsel for the petitioner, in support of his submissions, has placed reliance upon a decision of Hon'ble Supreme Court reported in (1982) 3 SCC 484 , Mool Chand Yadav and another vs. Raza Buland Sugar Company Ltd., Rampur & others in which it has been held that during pendency of appeal any order having serious civil consequences connected with the appeal must be stayed. 8. Learned counsel for the petitioner has also placed reliance on the judgment reported in AIR 2004 SC 2371 , Mardia Chemicals Ltd. v. Union of India. The relevant portion of the said decision reads as under: Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under section 13 (4) of the Act have been taken, a mechanism has been provided under section 17 of the Act to approach the Debt Recovery Tribunal. The above noted provisions are for the purposes of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows- 1. The above noted provisions are for the purposes of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows- 1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days notice before proceeding to take any of the measures as provided under sub-section (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be, must be communicated to the borrower. In connection with the conclusion we have already held a discussion in the earlier part of the judgment. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debt Recovery Tribunal under section 17 of the Act, at that stage.? 9. Learned counsel for the petitioner has further placed reliance upon a judgment reported in AIR 2009 Orissa 35, Krushna Chandra Sahoo vs. Bank of India & others and submitted that it is obligatory on the part of the authorities to consider and dispose of the objection by a speaking and reasoned order and communicate the order to the person aggrieved. Para 7 of the said decision reads as under: ?A conjoint reading of both the provisions referred to herein above makes it clear that it is obligatory on the part of the authority first to consider and dispose of the objection by a speaking and reasoned order and communicate the order to the person aggrieved i.e. the borrower/guarantor. It is a condition precedent for issuance of notice under Section 13(4) of the Act. The authority cannot ignore the statutory provisions treating them merely to be a decoration piece in the statutes rather they require strict adherence for the simple reason that the financial institutions have been conferred with certain privileges for making expeditious recovery from the borrowers by-passing the onerous and lengthy procedure of civil suits.? 10. I have considered the arguments of learned counsel for parties and gone through the record. 11. 10. I have considered the arguments of learned counsel for parties and gone through the record. 11. Admittedly, appeal of the petitioner is pending before the Debt Recovery Tribunal and the date has been fixed as 25.8.2011 for further orders. In the appeal, petitioner has raised various objections against the respondent bank which are to be adjudicated by the learned Tribunal and if, in the meantime, the respondent-Bank proceeds with the auction of the property of the petitioner-company then the same will cause serious prejudice to the petitioner. 12. Since matter is pending before the learned Debt Recovery Tribunal, therefore, without entering into merits of the case, in order to protect the interest of the petitioner, it is hereby provided that the respondent bank will refrain itself from holding any auction of the property of the petitioner-company in pursuance of the advertisement/notice published on 10th May, 2011 till disposal of the appeal of the petitioner by the Debt Recovery Tribunal. 13. With the aforesaid observations/directions, this writ petition is disposed of finally. 14. Learned counsel for the respondent bank is directed to communicate this order to the authority concerned for its compliance.