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2019 DIGILAW 72 (AP)

Vishnutek Engineers Pvt. Ltd. v. Authorised Officer, ASREC (India) Ltd.

2019-06-04

A.V.SESHA SAI, A.V.SESHA SAI, U.DURGA PRASAD RAO, U.DURGA PRASAD RAO

body2019
JUDGMENT : U. Durga Prasad Rao, J. 1. The petitioner seeks writ of certiorari calling for the records pertaining to order, dated 20.4.2017, in SA No. 278 of 2016 on the file of Debts Recovery Tribunal (for short, 'the DRT'), Visakhapatnam, and the order, dated 8.2.2019, in Appeal No. 209 of 2017 on the file of Debts Recovery Appellate Tribunal (for short, 'the DRAT') at Calcutta, In-charge Debts Recovery Tribunal, Allahabad, and quash the same and consequently set-aside all the proceedings initiated against the petitioner by respondent Nos. 1 and 2 under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the SARFAESI Act') as arbitrary, illegal and violative of principles of natural justice. 2. The petitioner's case, succinctly, is thus: (a) The petitioner is a private limited company carrying on business in sales and service of earth moving and material handling machinery and equipment and their lubricants. For their business purpose, the petitioner availed credit facilities from respondent No. 3 (R3) to an extent of Rs. 500.00 lakhs. The Directors of the petitioner company also constituted a Partnership Firm and carrying separate business in the name and style of 'M/s. Vishnu Tek Logistics' a Partnership Firm and the said firm also availed certain finance from R3. The petitioner and the partnership firm went into rough weathers and therefore they defaulted in repaying the loans availed from R3. The loan repayable to R3 is secured by 6 properties narrated in the writ petition, out of which the property shown in Item No. 2 was released in favour of the petitioner by R3 and the property shown as Item No. 5 was subsequently sold by respondent Nos. 1 and 2 (R1 & R2) highhandedly and the same is subject-matter of litigation in SA No. 232 of 2016, pending on the file of DRT, Visakhapatnam. (b) The further case of the petitioner is that in view of the default committed by the petitioner as well as the partnership firm, R3 initiated proceedings against the petitioner under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, 'the RDDB Act') and the SARFAESI Act. R3 issued notice, dated 12.5.2009, under Section 13(2) of the SARFAESI Act, demanding the petitioner to pay a sum of Rs. 7,14,45,950.03 as on 11.5.2009. R3 issued notice, dated 12.5.2009, under Section 13(2) of the SARFAESI Act, demanding the petitioner to pay a sum of Rs. 7,14,45,950.03 as on 11.5.2009. The petitioner along with the partnership firm approached R3 for settlement of the loan account under One Time Settlement (OTS) Scheme, as per the norms issued by the Reserve Bank of India. R3 accepted the proposal and agreed to settle the loan account of both the petitioner and partnership firm for a sum of Rs. 640.00 lakhs and communicated the same to petitioner vide letter bearing No. 1729/45/90, dated 30.9.2013. The petitioner and partnership firm, in order to avail the concessions granted under OTS Scheme, together paid rupees one crore immediately. R3 had granted time till 19.12.2013 for payment of balance of Rs. 5.40 crores. (c) It is further submitted that since the petitioner and its partnership firm were facing financial crunch, they along with R1 & R2 approached R3. The petitioner, R2 and R3 entered into a Tripartite Memorandum of Understanding (MOU) to clear the balance OTS amount. As per the terms of MOU, the balance amount Rs. 5.40 crores under the OTS was agreed to be paid by R2 to R3 and in turn R3 was obligated to assign the financial assets to R2 along with with security interest. In terms of the aforesaid tripartite MOU, R3 after realizing its debt in terms of OTS, executed an Assignment Deed, dated 16.12.2013, in favour of R2 and transferred the loan and securities. Since R3 had recovered all its dues under OTS from the petitioner and the partnership firm, it closed the loan account as on 17.12.2013. After closure of the loan account, R1 & R2 developed an evil intention to knock away the valuable security available with them. They sought to initiate proceedings under Section 13(4) of the SARFAESI Act without issuing pre-mandatory notice under Section 13(2) of the SARFAESI Act in a mala fide manner. Thus, without issuing a fresh demand notice, R2 sought to rely on Section 13(2) notice, dated 12.5.2009, issued by the R3, and pursued further remedies under Section 13(4) against the petitioner and its partnership firm. They had surreptitiously managed to sell Item No. 5 of the property and same is subject-matter of litigation in SA No. 232 of 2013, pending on the file of DRT, Visakhapatnam. They had surreptitiously managed to sell Item No. 5 of the property and same is subject-matter of litigation in SA No. 232 of 2013, pending on the file of DRT, Visakhapatnam. Inspite of petitioner intimating them to secure better offers by its email dated 9.3.2016, R2 finalized the sale at an absurdly low price. Prior to OTS, R3 classified petitioner's account as Non-Performing Asset (NPA) but after OTS and closure of the loan account by R3, the petitioner's account can no longer be treated as NPA. The petitioner requested R2 to furnish the details of outstanding amount by its email, dated 16.9.2016. However, R2 refused petitioner's request through its email, dated 17.9.2016. (d) Further case of the petitioner is that R2 issued possession notice, dated 20.10.2016, as against the properties mentioned in Item Nos. 3 and 4. However, the possession of Item No. 4 is still with the petitioner. In order to effectively protect itself from the high-handed and illegal acts of R2, the petitioner and the partnership firm filed SA No. 278 of 2016 before the DRT, Visakhapatnam. However, without appreciating the contentions raised by the petitioner in proper perspective, the DRT, Visakhapatnam, dismissed SA No. 278 of 2016, vide its order dated 20.4.2017. Aggrieved, the petitioner filed Appeal No. 209 of 2017 before the DRAT, Calcutta. However, the said appeal was mechanically dismissed by the DRAT, Calcutta, vide its judgment, dated 8.2.2019. Hence, this writ petition. 3. Heard the arguments of Sri S. Ravi, learned Senior Counsel representing on behalf of J.N. Bhushan, learned Counsel for petitioner, Sri D. Prakash Reddy, learned Senior Counsel, representing on behalf of Sri M. Srinivas, learned Counsel for respondents 1 and 2 and Sri M. Balasubramanyam, learned Counsel for the 4th respondent. 4A. While severely fulminating the orders of the Tribunals below, the main plank of argument of learned Senior Counsel S. Ravi is that the possession notice dated 20.10.2016 issued by R2 under Section 13(4) of the SARFAESI Act is per se unsustainable under law because the said notice was not preceded by a demand notice under Section 13(2) of SARFAESI Act. He would contend, Section 13(4) notice could be issued only when the borrower failed to discharge his liability within the period specified in Section 13(2) of the SARFAESI Act. He would contend, Section 13(4) notice could be issued only when the borrower failed to discharge his liability within the period specified in Section 13(2) of the SARFAESI Act. Therefore, without issuing a notice under Section 13(2) calling upon the petitioner to discharge its liability within sixty days from the date of such notice and thereby giving an opportunity to the petitioner to put forth its objections if any in terms of Section 13(3-A) of the SARFAESI Act, R2 cannot straight. away issue possession notice under Section 13(4) of SARFAESI Act. Precisely, his contention is that without issuing a statutory notice under Section 13(2) of the Act, R2 is not entitled to issue notice under Section 13(4) of the Act straight away, which is hit by law. 4B. Secondly, learned Counsel would contend that notice dated 12.5.2019 earlier issued by R3 under Section 13(2) of the SARFAESI Act cannot be taken advantage by R2 for the reason that after treating the account of the petitioner as NPA and issuing Section 13(2) notice by R3, many incidents have transpired which culminated in discharge of the loan amount to R3 and its closure of the loan account of petitioner. In expatiation, learned Counsel would submit, after issuance of demand notice dated 12.5.2019 under Section 13(2) of the SARFAESI Act by R3, the petitioner and its partnership firm had requested R3 for OTS, which effort fructified and R3 agreed to receive Rs. 6.40 crores in terms of the said settlement. In fact the petitioner and its partnership firm have paid Rupees one crore upfront and for payment of balance amount of Rs. 5.40 crores, R3 gave time till 19.12.2013. To clear the said amount, the petitioner requested R2 to finance and it agreed. Pursuant thereof, a tripartite MOU dated 16.12.2013 was entered into by R3 as first party, petitioner as second party and R2 as third party. R2, as financier of petitioner, agreed to pay Rs. 5.40 crores to the bank which in its turn, agreed to assign the financial assets of the petitioner/borrower to R2. The balance amount under OTS was accordingly paid to R3 and it closed the loan account of petitioner. The NPA stigma to petitioner's loan account and the mandatory notice under Section 13(2) of the SARFAESI Act were thus given a legal quietus and they are no more extant. The balance amount under OTS was accordingly paid to R3 and it closed the loan account of petitioner. The NPA stigma to petitioner's loan account and the mandatory notice under Section 13(2) of the SARFAESI Act were thus given a legal quietus and they are no more extant. Learned Counsel would argue, therefore, R2 who is only a financier of petitioner, cannot revive the NPA classification, and also Section 13(2) notice and proceed from the subsequent stage under Section 13(4) of the SARFAESI Act. Necessarily, it must issue a mandatory notice under Section 13(2) afresh and then follow the procedure contemplated under Section 13(4) of the SARFAESI Act. Due to issuance of Section 13(4) notice by 2nd respondent at once, the petitioner lost valuable opportunity to submit his objections under Section 13(3-A). 4C. Thirdly, he would argue that for another reason also, the impugned notice under Section 13(4) is unsustainable. Learned Counsel would argue, on payment of OTS amount to R3, the contractual obligation under loan agreement between the petitioner and R3 became ceased and what remained is a fresh contract between the petitioner and R2 regarding the payment of Rs. 5.40 crores. As per the letter dated 28.11.2013, the petitioner and R2 came to an understanding regarding the mode of payment of aforesaid amount. Petitioner agreed to pay margin amount of Rs. 50 lakhs to R2 even before acquisition. Balance of Rs. 490 lakhs was agreed to be paid within twelve months from the date of acquisition of petitioner's account by R2 with interest @ 25% per annum at quarterly rests on reducing balance. It was further agreed that the lockup period of interest should be three months. Added to it, an amount of Rs. 2,00,000/- was agreed to be paid by petitioner to R2 towards due diligence charges. Referring the above terms and conditions, learned Counsel sought to argue that in the place of loan agreement between petitioner and R3, a new contract with new terms and conditions was novated between petitioner on one hand and R2 on the other. By virtue of such novation, the NPA classification and notice issued under Section 13(2) of the SARFAESI Act which were part of previous loan agreement were substituted by a fresh contract between petitioner and R1 & R2. By this reason also, the respondents cannot rely upon the notice earlier issued under Section 13(2). 4D. By virtue of such novation, the NPA classification and notice issued under Section 13(2) of the SARFAESI Act which were part of previous loan agreement were substituted by a fresh contract between petitioner and R1 & R2. By this reason also, the respondents cannot rely upon the notice earlier issued under Section 13(2). 4D. Learned Counsel for petitioner further argued that as per the guidelines issued by the Reserve Bank of India also R2 is required to declare the petitioner's account as NPA and issue fresh notice under Section 13(2). Learned Counsel lamented that both the Courts below have not considered the facts and their legal implications in a proper perspective and erroneously rejected the case of the petitioner. He thus prayed to allow the writ petition. 5A. In oppugnation, learned Senior Counsel D. Prakash Reddy, would argue that R2 is not only a financier of petitioner to enable him to pay off the debt under OTS to R3 - bank, but it is also an assignee of financial assets in terms of Section 5 of SARFAESI Act and thus, stepped into the shoes of R3. He strenuously argued that R2 entered the arena after the bank declared the loan account of petitioner as NPA and issued demand notice under Section 13(2) of the SARFAESI Act. At that stage, there was OTS between the petitioner and R3, as per which, the bank agreed to receive Rs. 6.40 crores, but the petitioner could pay only one crore. For payment of the balance amount, the petitioner requested R2 for financial help and also requested the bank to assign the financial assets along with underlying security interest in favour of petitioner. Referring to MOU dated 16.12.2013, learned Senior Counsel would submit that the MOU is clear in its terms that the petitioner is not a mere financier to petitioner but on paying Rs. 5.40 crores on behalf of petitioner to R3, R2 became the assignee of financial assets along with underlying security interest, which is evident also from another document i.e., Assignment agreement dated 16.12.2013 entered into by the bank and R2. By virtue of aforesaid assignment, learned Senior Counsel would emphasize, R2 became a "deemed lendor" with all the rights which the bank enjoyed over the financial assets till redemption of its debt. As such, R2 can continue the proceedings from the stage at which the bank departed. By virtue of aforesaid assignment, learned Senior Counsel would emphasize, R2 became a "deemed lendor" with all the rights which the bank enjoyed over the financial assets till redemption of its debt. As such, R2 can continue the proceedings from the stage at which the bank departed. Learned Senior Counsel proposed a logical statement that if the bank was not required to give a fresh notice under Section 13(2) for enforcement of security, R2 - the deemed lendor, who stepped into its shoes also does not require to do so. The main plank of his contention is that since R2 entered the scene post classification of petitioner's account as NPA and issuing Section 13(2) notice, he can. as well take advantage of those mandatory requirements for the enforcement of security interest from the stage of Section 13(4) onwards. He placed reliance on Meragani Appa Rao v. IDBI Bank, 2018 (3) ALD 206 (DB), to buttress his argument that fresh notice under Section 13(2) was not required. 5B. Commenting on the novation propounded by the petitioner's Counsel, D. Prakash Reddy, would argue that by virtue of novation under tripartite MOU, the petitioner may not required to pay himself the debt of R3 anymore, but that does not mean his liability towards R2 is also wiped out. R2 can enforce the security interest as per the provisions of the SARFAESI Act and therefore, the impugned possession notice dated 20.10.2016, issued under Section 13(4) of the SARFAESI Act, is legally sustainable. He, thus, prayed to dismiss the writ petition. 6. We gave our anxious consideration to the submissions of both the Counsel. The admitted facts in nutshell are that after R3 bank classified petitioner's account as NPA and issued Section 13(2) notice, dated 12.5.2009, demanding a sum of Rs. 7,14,45,950.03 ps from the petitioner, a one time settlement took place between R3 and petitioner, as per which the bank addressed letter dated 30.9.2019 to petitioner agreeing to accept Rs. 640 lakhs in full quits. Out of the said agreed amount, the petitioner could pay only the upfront amount of one crore and on his request, the bank extended time for payment of balance amount under OTS till 19.12.2013 vide its Letter No. 690/45/42, dated 13.12.2013. The petitioner there upon, vide its letter dated 28.11.2013 requested R2 for assets reconstruction by extending financial assistance to liquidate the loan of bank. The petitioner there upon, vide its letter dated 28.11.2013 requested R2 for assets reconstruction by extending financial assistance to liquidate the loan of bank. The petitioner agreed to repay Rs. 5.40 crores to R2 with interest under different spells as narrated in the said letter. R2 agreed and thereafter a tripartite MOU was entered on 16.12.2013 by R3 as first party, petitioner as second party and R2 as third party. It is agreed by the parties that (i) R2 shall pay the balance OTS amount of Rs. 5.40 crores on behalf of borrowers to bank on or before 19.12.2013; (ii) on receipt of the full OTS amount, the bank shall assign the financial assets of the borrowers alongwith its right, title, claim and interest together with all underlying security interest in favour of R2 by executing an assignment agreement. On the same day, R2 & R3 entered into an assignment agreement, whereby R3 assigned its right, title, interest in the financing documents, agreements, deeds along with underlying security interest in favour of R2. Since the petitioner failed to repay the outstanding amount due, R2 issued a possession notice under Section 13(4) of SARFAESI Act to petitioner which was unsuccessfully challenged before the Tribunals below by the petitioner. 7. In the light of the above facts, the point for consideration is: whether the impugned possession notice dated 20.10.2016 issued by 2nd respondent is legally unsustainable' for want of a fresh notice under Section 13(2) of the SARFAESI Act? Point: 8. The Statement of Objects and Reasons of SARFAESI Act would reveal, it was felt there were certain areas in which the banking and financial, sector do not have a level playing field as compared to other participants in the financial markets in the world. There was no legal provision for facilitating securitization of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. The existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms, which has resulted in slow pace of recovery of defaulting loans and mounting levels of Non-Performing Assets of Banks and Financial Institutions. The existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms, which has resulted in slow pace of recovery of defaulting loans and mounting levels of Non-Performing Assets of Banks and Financial Institutions. Keeping the drawbacks in view, SARFAESI Act, 2002 was enacted with one of the main objects to facilitate reconstruction of financial assets by assets reconstruction companies with a power to enforce the securities; change the management and exercise other incidental powers. 9. This Act is a special legislation and self contained code which is evident from a perusal of some of the important provisions. (i) Section 2(b) defines 'asset reconstruction' as acquisition by any assets reconstruction company of any right or interest of any bank or financial institution in any financial assistance for the purpose of realization of such financial assistance. Thus, the term assets reconstruction chiefly involves in the act of acquisition of any right or interest held by bank or financial institution in the matter of any financial assistance for realization of such financial assistance. (ii) Section 2(ba) defines 'asset reconstruction company' means a company registered with Reserve Bank under Section 3 for the purposes of carrying on the business of asset reconstruction or securitization, or both. (iii) Section 2(f) defines the term 'borrower'. It shows that the borrower who obtained financial assistance from a bank or financial institution will be attorned to asset reconstruction company consequent upon its acquisition of the rights or interests of the bank or financial institution. (iv) Section 3 deals with the procedure for registration of asset reconstruction companies and Section 4 deals with cancellation of certificate of registration. (v) Section 5 is an important section, which deals with the acquisition of financial assets of bank or financial institution by asset reconstruction company and consequences of such acquisition. Section 5(2) lays down that if the bank or financial institution is a lendor in relation to any financial assets, upon acquisition of such financial assets by the assets reconstruction company, such company shall be "deemed to be the lendor" and all rights of such bank or financial institution shall vest in such company in relation to such financial assets. Section 5(2) lays down that if the bank or financial institution is a lendor in relation to any financial assets, upon acquisition of such financial assets by the assets reconstruction company, such company shall be "deemed to be the lendor" and all rights of such bank or financial institution shall vest in such company in relation to such financial assets. Thus, one of the important consequences of acquisition of financial assets is that, since after acquisition, the assets reconstruction company shall become a deemed lendor and all the rights relating to such financial assets hitherto exercised by the banks and financial institutions shall vest in the assets reconstruction company. (vi) Section 9 envisages the different measures which can be adopted by assets reconstruction company for realization of the financial assets. One of such measures is the enforcement of security interest in accordance with the provisions of SARFAESI Act. (vii) Enforcement of security interest is dealt with in Chapter-III under Sections 13 to 18. Section 13 says that a secured creditor may without the intervention of the Court or Tribunal enforce the security interest in the manner provided in that section. Under sub-section (2), if the borrower commits default in respect of secured debt, the secured creditor may classify his account as Non-Performing Asset and then issue a notice to him to fulfill his liability within 60 days from the date of notice. Under sub-section (3-A), the borrower in response to the notice may raise his objections, in which case, the creditor shall consider the same and communicate within 15 days of receipt of such representation or objections, the reasons for non-acceptance of the representation or objections to the borrower. Sub-section (4) lays down that if the borrower fails to discharge his liability within the stipulated time, the creditor may take recourse to recover the secured debt by taking possession of the secured asset of the borrower with a right to lease, assignment or sale. It can also take over the business management of borrower. Sub-section (8) says that where the amount due to the creditor is paid at any time before the date of publication of notice for public auction or inviting quotations or tender, the secured asset shall not be transferred. It can also take over the business management of borrower. Sub-section (8) says that where the amount due to the creditor is paid at any time before the date of publication of notice for public auction or inviting quotations or tender, the secured asset shall not be transferred. (viii) Section 14 facilitates the act of taking possession of secured asset by a secured creditor to enable him to sell or transfer the same for realization of his dues. It lays down that the secured creditor by way of affidavit may request the Chief Metropolitan Magistrate or the District Magistrate to take possession of the secured asset and forward the same to him and the aforesaid authority can pass order to that effect. 10. Thus the gamut of Act, which is narrated supra, shows that on acquisition of financial asset from a bank or financial institution, the assets reconstruction company becomes a "deemed lendor" with all the rights till then exercised by the former. On failure of the borrower to pay the amount, the assets reconstruction company, who is the deemed lendor, can enforce the financial security by following the provisions of the Act i.e., Sections 13 and 14. 11. With the above jurisprudential inputs when the facts are scrutinized, R2 by virtue of MoU dated 16.12.2013 and Assignment agreement dated 16.12.2013, stepped into the shows of R3 and became the deemed lendor in terms of Section 5(2) of SARFAESI Act in relation to petitioner with regard to financial assets assigned by the bank. So in the normal course, in order to enforce the security interest, R2 has to follow the procedure contemplated under Sections 13 and 14. However, the crucial question is whether R2 is required to issue a fresh notice under Section 13(2) before pressing into service Section 13(4). In our considered view, R2 does not require to issue a fresh notice under Section 13(2) because the previous lendor whom R2 succeeded and became lendor under the deeming provision of Section 5(2), had already declared petitioner's account as NPA and issued a demand notice under Section 13(2). We are aware of the fact that subsequent to such measures being taken by the R3, OTS had intervened and R3 agreed to receive Rs. 6.40 crores in full quits from petitioner within specified time and subsequently, R2 came to the rescue of petitioner and paid Rs. We are aware of the fact that subsequent to such measures being taken by the R3, OTS had intervened and R3 agreed to receive Rs. 6.40 crores in full quits from petitioner within specified time and subsequently, R2 came to the rescue of petitioner and paid Rs. 5.40 crores to R3 on behalf of petitioner and balance of rupees one crore was paid by petitioner himself. By virtue of these intervening circumstances, it must be said, the flame of loan existed between the petitioner and R3 might be doused, but such circumstances will not extinguish the liability of petitioner towards R2 under the novated contract. Similarly, the NPA classification and Section 13(2) notice earlier issued by R3 also will not be exterminated for the reason that while approving the OTS proposed by petitioner, R3 in its letter dated 30.9.2013, put forth certain conditions. Condition No. 3 is thus: "3. If the approved compromise amount is not paid within the stipulated time or breach of any of the terms and conditions of the sanction, bank is at liberty to continue its further action under SABFAESI Act, 2002 (Emphasis supplied) and the part payment made by under the compromise shall be treated as part recovery and will be appropriated as per the rules and principles laid down by the bank." The above condition shows that R3 reserved its right to continue the SARFAESI proceedings in case the petitioner failed to honour the OTS. No doubt, the balance amount under OTS was paid to R3 and R3 closed the loan account of petitioner. However, since R2 paid the said amount, it became the "deemed lendor". As rightly put it by D. Prakash Reddy hypothetically, in the event of failure to honour OTS by petitioner, R3 would have the right to proceed against him under Section 13(4) onwards and there would be no necessity for R3 to issue a fresh notice under Section 13(2) merely because of intervention of OTS after issuing of said notice. It was so held by the Division Bench of this Court in Meragani Appa Rao's case (supra). As such, when R3 was not required to issue a fresh 13(2) notice, equally R2, who is the 'deemed lendor', is not required to issue a fresh notice under the said provision. It was so held by the Division Bench of this Court in Meragani Appa Rao's case (supra). As such, when R3 was not required to issue a fresh 13(2) notice, equally R2, who is the 'deemed lendor', is not required to issue a fresh notice under the said provision. It can take advantage of the classification of NPA and issuance of Section 13(2) notice by R3 and proceed from the stage of 13(4). Therefore, we find no legal aberration in the act of R2. 12. The novation is concerned, it is true that by virtue of tripartite agreement among the three parties, the liability of petitioner towards R3 was discharged and in its place, a new liability was created towards R2. However, that will not in any way effect the right of R2, who stepped into the shoes of R3 as 'deemed lendor' by acquisition of financial assets from R3 under Section 5 of SARFAESI Act. Hence, it can as well take advantage of the notice earlier issued under Section 13(2). Therefore, we are unable to countenance the contra arguments put forth by the learned Counsel for petitioner. We find no illegality in the orders of the Tribunals below. 13. The contention of petitioner with regard to the guidelines issued by RBI is concerned, the said argument has been adequately dealt with by the appellate Tribunal. As against the contention of the petitioner that as per the guidelines of RBI, R2 was required to declare petitioner's account as NPA and commence the proceedings afresh by issuing notice under Section 13(2), R2 contended that the guidelines of 2003 issued by RBI with regard to the NPA are procedural guidelines to be followed by ASREC for the purpose of their own books and in that view, mere was no necessity to issue fresh demand notice. Considering the arguments of both sides, the appellate Tribunal held thus: "9. The guidelines of 2003 referred to by the learned Counsel for the appellant was issued by the Reserve Bank of India laying down the procedure to be followed and the records to be maintained by ASREC. The Clause 12 of the said Guidelines reflects that every Securitization or Reconstruction Company shall classify the assets 'held in its own books' into the categories narrated in that clause. The Clause 12 of the said Guidelines reflects that every Securitization or Reconstruction Company shall classify the assets 'held in its own books' into the categories narrated in that clause. The term 'held in its own books' was inserted on 21.4.2010, which goes to show mat these guidelines are only for the ASREC for maintaining of their books of account and are not applicable in the proceeding undertaken under the SARFAESI Act by the Bank or ASREC for recovery of dues. Thus, the Tribunal below has rightly observed that no fresh demand notice was required to be issued to the appellant." We find no reason to differ with the above finding of the appellate Tribunal. 14. Accordingly, this writ petition is dismissed. No order as to costs. As a sequel, miscellaneous petitions pending, if any, shall stand closed.