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2022 DIGILAW 764 (GAU)

Pranjal Dutta v. Union of India

2022-07-20

ACHINTYA MALLA BUJOR BARUA, R.M.CHHAYA

body2022
JUDGMENT : R.M. Chhaya, J. Heard Mr. A. Das, learned counsel for the petitioner. 2. Though served, no one appears for the respondents. 3. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the Demand Notice dated 16.05.2022 issued by the respondent No.4 under the provisions of Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, hereinafter referred to as 'the SARFAESI Acf). 4. It is a matter of record that this Court vide order dated 20.06.2022 had issued notice and by an ad interim measure the impugned Demand Notice dated 16.05.2022 came to be stayed. 5. Having heard the learned counsel for the petitioner, at this stage it would be appropriate to refer to the provisions of Section 13 of the SARFAESI Act, which read as under: '13. Enforcement of security interest.-(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4). Provided that- (i) the requirement of classification of secured debt as non-performing asset under this sub-section shall not apply to a borrower who has raised funds through issue of debt securities; and (ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the debenture trustee. (3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower. (3A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within fifteen days of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower: Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A. (4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:- (a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; (b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset: Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt; (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. ......................................................................................' 6. Considering the aforesaid provisions of Section 13(2) of the Act, what is impugned in this petition is a notice in writing to the petitioner to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4). 7. The provisions of Section 13(3A) of the Act gives a right to the borrower to make a representation or to raise an objection and on such representation being made or objection being raised by the borrower, the secured creditor is bound to consider such representation or objection. The said provision inter alia provides that if the decision of the secured creditor is adverse to the borrower, the same has to be communicated to the borrower within a period of fifteen days. 8. The said provision inter alia provides that if the decision of the secured creditor is adverse to the borrower, the same has to be communicated to the borrower within a period of fifteen days. 8. In the light of the aforesaid provision, the petitioner is permitted to file appropriate representation or objection, as provided under Section 13(3A) of the SARFAESI Act and in case any such representation or objection is filed by the petitioner, the same shall be considered by the respondent Bank, respondent No.4 in particular, as provided under Section 13(3A) of the Act. It would be open for the petitioner to raise all available contentions in the representation or objection that may be filed and the respondent Bank shall consider the same in accordance with law. If such a representation or objection is filed within a period of 10(ten) days from today, the respondent Bank shall not proceed further with the impugned notice without considering such representation or objection that may be filed by the petitioner as a borrower. 9. It is further clarified that in case no representation or objection is filed, the respondent Bank will be at liberty to take appropriate action in accordance with law. 10. With the aforesaid observation, the writ petition stands disposed of. 11. Notice is discharged. 12. Ad interim relief granted earlier stands vacated. 13. However, there shall be no order as to costs.