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2012 DIGILAW 892 (CAL)

Amar Nath Banerjee v. Central Bank of India

2012-09-24

DIPANKAR DATTA

body2012
JUDGMENT : Dipankar Datta, J. 1. The petitioner was served with a demand notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 by the respondent Bank. Representation dated 19th March, 2012 followed at his instance. Soon thereafter, another representation was submitted by the petitioner on 30th April, 2012. These were issued by him exercising the right granted by Section 13(3A) of the Act. It is claimed in the writ petition that without considering and disposing of the said representations, the Bank issued a notice conveying to the general public that it had taken possession of the secured asset. 2. This writ petition was presented on 21st August, 2012 raising the grievance that without disposing of the representations, possession could not be taken. It was first heard on 3rd September, 2012. Mr. Jha, learned Advocate appearing for the Bank sought for time to obtain instructions as to whether the petitioner's representations were disposed of or not. Considering his prayer, hearing of this writ petition was adjourned till 10th September, 2012. Limited interim order was passed protecting the petitioner's possession in respect of the mortgaged property. 3. An affidavit-in-opposition was filed on behalf of the Bank on 13th September, 2012 annexing thereto a copy of the response of the Bank dated 7th May, 2012. Since in course of hearing learned Advocate appearing for the petitioner did not dispute the response of the Bank, this Court had made an order to the effect that on the ground of overcharging of interest, the Bank should not be restrained from taking further action. This order was passed considering the decision of the Supreme Court Indian Bank Vs. Blue Jaggers Estates Ltd. and Others, (2010) 8 SCC 129 Hearing was adjourned till 20th September, 2012 allowing the petitioner the liberty to offer terms of a onetime settlement to the Bank. 4. Today, when the writ petition is taken up for consideration, Mr. Dutta, learned Advocate representing the petitioner produces before the Court the envelope that he claims contained the response of the Bank dated 7th May, 2012. It appears therefrom that the said response was dispatched on 5th September, 2012 and received by the post office concerned, which was to deliver the envelope to the petitioner, on 17th September, 2012. 5. Mr. Dutta, learned Advocate representing the petitioner produces before the Court the envelope that he claims contained the response of the Bank dated 7th May, 2012. It appears therefrom that the said response was dispatched on 5th September, 2012 and received by the post office concerned, which was to deliver the envelope to the petitioner, on 17th September, 2012. 5. Mr. Jha was called upon by the Court to explain as to why the response dated 7th May, 2012 was dispatched to the petitioner after the writ petition had been filed. He had no answer. It is, therefore, clear that to frustrate the writ petition, the response was dispatched after the writ petition came to be presented before this Court. Strange enough, the response did not bear any official memo number. Mr. Jha again failed to explain why the response did not bear such number. The Bank is a nationalised Bank and it is difficult to believe that letters would be issued by its authorised officer without maintaining any official memo number. If indeed the response dated 7th May, 2012 had been issued, the same could have been produced before the Court on 3rd September, 2012, when it was first heard. To the mind of this Court, the response was ante dated to highlight that the petitioner's representations had been considered long before and that his claim is absolutely baseless. 6. Mr. Jha referred to two decisions of the Supreme Court, one Satyavir Singh Rathi Vs. State thr. C.B.I., (2011) CriLJ 2908 and the other United Bank of India Vs. Satyawati Tondon and Others, AIR 2010 SC 3413 , in support of his contention that interference on the writ petition would be unwarranted since the petitioner has a remedy u/s 17 of the Act. 7. Referring to the decision in Kanaiyalal (supra), he contended that disputed questions of fact were not to be adjudicated by the Writ Court and 4 since an efficacious statutory remedy of an appeal u/s 17 was available to the petitioner, the Court may decline to exercise its jurisdiction. 8. The Court had called upon Mr. Jha to demonstrate which of the facts are disputed by the Bank. He faintly referred to the fact of non-receipt of the response dated 7th May, 2012 by the petitioner prior to presentation of the writ petition. 8. The Court had called upon Mr. Jha to demonstrate which of the facts are disputed by the Bank. He faintly referred to the fact of non-receipt of the response dated 7th May, 2012 by the petitioner prior to presentation of the writ petition. According to him, the petitioner must have received the response before the writ petition was presented. The Court called upon Mr. Jha to produce evidence to the effect that a prior dispatch of the response dated 7th May had been made. Needless to record, Mr. Jha could not come up with any such evidence. This Court is therefore not inclined to hold that the writ petition involves any disputed question of fact, which would warrant an order relegating the petitioner to the remedy available u/s 17 of the Act. 9. The decision in Satyawati Tondon (supra) has been considered. There, the Allahabad High Court had entertained the writ petition and granted ad interim relief to a guarantor on the ground that the secured creditor had not taken any action against the borrower. In such fact situation, the Supreme Court held that having regard to the remedy available u/s 17 of the Act, the High Court ought not to have entertained the writ petition since the secured creditor was entitled to proceed against the guarantor also. 10. While allowing the appeal and setting aside the order impugned, the Supreme Court held as follows: 44. While expressing the aforesaid view, we are conscious that the power conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. 11. The decision does not lay down the law that in no case should the High Court in exercise of writ jurisdiction interfere against an order passed or action taken by a secured creditor in terms of the provisions of the Act. 11. The decision does not lay down the law that in no case should the High Court in exercise of writ jurisdiction interfere against an order passed or action taken by a secured creditor in terms of the provisions of the Act. What it lays down is that the High Court should exercise its jurisdiction with care, caution and circumspection and within the limits of self-imposed restrictions. It is settled law that existence of an alternative remedy is not an absolute bar for entertaining a writ petition and that the Court would be justified in entertaining the writ petition despite availability of an alternative remedy when it is demonstrated that the action impugned is without jurisdiction. 12. Before a secured creditor seeks to enforce the security interest by taking any one of the measures provided in Section 13(4) of the Act, it is obligatory for it to decide the representation/objection that it might have received from the borrower u/s 13(3A) of the Act. Disposal of the representation/objection is, therefore, a condition precedent before measures in terms of Section 13(4) of the Act could be taken. Measures u/s 13(4) of the Act cannot therefore be taken unless there is existence of the jurisdictional fact. The jurisdictional facts would include issuance of a demand notice u/s 13(2) of the Act and disposal of representation/objection, if received from 6 the borrower, in terms of provisions contained in Section 13(3A) of the Act. Since in the instant case the possession notice was issued on 20th June, 2012 before even the representations u/s 13(3A) were disposed of, this Court holds the action of the respondent Bank to suffer from a gross jurisdictional error. The writ petition is, therefore, entertainable and having regard to the facts and circumstances discussed above, the petitioner is also entitled to relief in the sense that the Bank ought to reconsider the representations submitted by him. 13. In the result, the response dated 7th May, 2012 stands set aside. The authorised officer of the respondent Bank shall proceed to consider the petitioner's representations dated 19th March and 30th April, 2012 in accordance with law and give a fresh decision thereon. Immediately after such decision is given, the same shall be communicated to the petitioner. 13. In the result, the response dated 7th May, 2012 stands set aside. The authorised officer of the respondent Bank shall proceed to consider the petitioner's representations dated 19th March and 30th April, 2012 in accordance with law and give a fresh decision thereon. Immediately after such decision is given, the same shall be communicated to the petitioner. Till such time the decision is communicated, no further effect shall be given to the possession notice dated 20th June, 2012, meaning thereby that the petitioner's possession shall not be disturbed. With the aforesaid direction, the writ petition stands disposed of. There will be no order as to costs. Urgent Photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.