Patna High Court
Case Details
IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.569 of 2011 ====================================================== 1. M/S Naturals Dairy Pvt. Ltd., a company registered under the Companies Act, 1956 having its registered Office At 225, Ashoka Place, Exhibition Road, P.S.- Gandhi Maidan, Town and Distt.- Patna through its Managing Director Sri Hemant Kumar Das, S/O Sri Awadhesh Kumar Das, R/O 504, White House Block-A, Budha Marg, P.S.- Kotwali, Town and Distt.- Patna. .... .... Petitioner/s Versus 1. The Bank of Baroda, a Banking Company Constituted Under the Banking Companies (Acquisition and Transfer Of Undertakings) Act, 1970 Having its Head Office at Mandvi, Baroda, through its Managing Director. 2. The Sr. Branch Manager, Bank of Baroda, S.K. Puri Branch, Patna 3. The Assistant General Manager, Bank Of Baroda, Regional Office, West Boring Canal Road, Patna. 4. The Authorized officer Bank of Baroda, Sri Krishnapur Branch, Nawal Arcade, Boring Road, Patna. .... .... Respondent/s ======================================================
Legal Reasoning
CORAM: HONOURABLE MR. JUSTICE KISHORE KUMAR MANDAL ORAL ORDER 7 29-08-2013 Heard Mr. Sanjay Singh for the petitioner and Mr. Vivek Prasad for the respondent- Bank of Baroda ( for short ‘Bank’). The petitioner is the borrower of the respondent Bank. Having received the loan/cash credit facility the petitioner failed to pay off the loan amount. Resultantly, the respondent Bank being the secured creditor initiated action for recovery of loan under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( for short ‘SARFAESI Act’) and issued notice (Annexure-1) under Section Patna High Court CWJC No.569 of 2011 (7) dt.29-08-2013 2 13(2) thereof to the petitioner. Assailing the aforesaid notice the present writ petition has been filed. Learned counsel for the petitioner made diverse submissions to impress upon this Court that the respondent Bank has not set out the details of statements of accounts enabling the petitioner to pay off the dues. In the light of the order passed by this Court, the Deputy General Manager of the respondent- Bank filed an affidavit stating details of the outstanding dues against the petitioner. The petitioner has filed a supplementary affidavit to show apparent discrepancy in those statements. I have heard the parties. There is no controversy that the impugned action has been taken under Section 13(2) of the SARFAESI Act. Section 13 of the SARFAESI Act in its relevant part reads thus:- 13. Enforcement of Security interest.- (1) Notwithstanding anything contained in section 69 or section 69-A of the Transfer of Property Act, 1882 ( 4 of 1882), any security interest created in favour of any secured the creditor may be enforced, without 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 or any repayment of secured debt instalment in respect of such debt is classified by the secured creditor as non-performing asset, thereof, and his account Patna High Court CWJC No.569 of 2011 (7) dt.29-08-2013 3 if (2), 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). (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. [(3-A) if, on receipt of the notice under sub- section the borrower makes any representation or raises any objection, the consider such secured creditor shall representation or objection and the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate receipt of such within one week of 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 17-A.] (4) In case the borrower fails to discharge period his liability in full within the 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 secure assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset; (b)take over the management of the business of the borrower including the right to Patna High Court CWJC No.569 of 2011 (7) dt.29-08-2013 4 transfer by way of lease, assignment or sale for realizing 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.] ©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.” It , thus, appears that the respondent Bank is obliged to issue a notice setting out the details of the amount which includes details of statement of accounts disclosing the principal instalments and calculation of interest thereon, calling upon the petitioner to pay back those dues within a time frame. Section 13(A) vests the borrower a right to file objection thereto which the respondent Bank has to consider and dispose of setting out reasons therefor. If the petitioner defaults in making payment of the dues in the light of the said order to be passed by the Patna High Court CWJC No.569 of 2011 (7) dt.29-08-2013 5 respondent Bank then secured creditor is obliged to proceed further in terms of Section 13(4) of the SARFAESI Act. The borrower, if aggrieved by any action taken subsequent thereto can file appeal before the Tribunal in terms of Section 17 thereof Considering the submissions of the parties, this Court would direct the respondent Bank to issue fresh notice under Section 13(2) of the SARFAESI Act to the petitioner setting out in detail the dues payable by the petitioner ( the borrower). The petitioner shall be at liberty to pay off those dues and/or file objection thereto under Section 13(3-A) of the SARFAESI Act within the stipulated time. The respondent Bank in that event will consider said objection of the petitioner and pass an appropriate orders in accordance with law. The respondent Bank shall thereafter proceed to realize the dues, if any, in accordance with law.
Decision
The application is, accordingly, disposed of. (Kishore Kumar Mandal, J) Shyam/-