Mr. Rajiv Nayyar and Mr. Ashish Mohan, Senior Advocates with Mr. Samarth Chowdhury, Advocates v. PUNJAB NATIONAL BANK & ORS

Judgment

1. By way of present petition under Article 226/227 of Constitution of India, the petitioners seek the following prayers:- A. Direct Respondents No. 1 to 3 to adhere to and implement the binding terms of the One Time Settlement recorded in the Joint Lenders Meeting dated 28 March 2025; B. Restrain Respondent No. 3, UCO Bank, from taking any coercive measures concerning the Secured Assets of the Petitioners in furtherance of Sale Notices issued on 28 March 2025 and 05 May 2025; C. Quash and set aside the auctions/sale carried out pursuant to the Sales Notices issued on 28 March 2025 and 05 May 2025 in breach of the OTS recorded in the Joint Lenders Meeting dated 28 March 2025;…

2. The facts in a nutshell are that from 2010-2019, petitioners No.1 and 2 availed various credit facilities from Respondents No. 1 to 3 (‘Consortium of lenders’) which they were unable to fully repay. Consequently, their accounts were declared as Non-Performing Assets (‘NPA’) on 31.03.2021. A recall notice was issued by the consortium on 28.02.2022. The petitioners’ case is that they made a number of efforts to settle the dispute, and brought on board respondent No.4, who was willing to settle the dues for Rs 300 Crores in an OTS. A Joint Lenders Meeting (JLM) was conducted on

28.03.2025 wherein the respondents No.1-3 agreed to the terms of the OTS. But later on, respondent No.3 has unilaterally proceeded with securitisation proceedings and issued Sale Notices dated 28.03.2025 and 05.05.2025, and hence the petitioners have filed the present petition.

3. A preliminary objection has been raised on behalf of the respondent Banks as to the maintainability of the present petition by contending that it is the DRT and DRAT which, in exercise of their powers under Section 17 and 18 of the SARFAESI Act respectively, have the requisite jurisdiction to Signature Not Verified Signed By:GAUTAM ASWAL Signing Date:31.05.2025 05:56:49 W.P.(C) 7939/2025 entertain the reliefs sought herein.

4. Learned Senior Counsels for the petitioner seeks a sympathetic consideration of the OTS proposal of the petitioners by the respondents No.1 to 3. Reliance is placed on the decision of Supreme Court in Plasto Pack, Mumbai vs. Ratnakar Bank Ltd.1 It is further submitted that the unilateral action of respondents No.3/UCO Bank in issuing Sale Notices dated

28.03.2025 and 05.05.2025 are in breach of the consensus arrived at by the Consortium of Lenders in the JLM. It is further submitted that respondent No.4 through petitioner No.2 has already deposited Rs. 4.95 Crores with respondent No.3 which has already been encashed on 29.04.2025. It is further submitted that a further sum of Rs 30 Crores has also been deposited in the non-lien account of respondent No.1. It is contended that the Sale Notice dated 05.05.2025 pertained to 2 properties in the Samalakha Village, having a reserve price of Rs. 41.80 Crores and Rs. 222.30 Crores

respectively. While for the first property, a solitary offer of Rs 41.25 Crores was received, for the second property no offer was received at all. Learned Senior Counsels state, on instructions, that the petitioners alongwith respondent No.4, in order to show their willingness, are ready and willing deposit another sum of Rs 10-30 Crores with this Court.

5. Learned counsel for respondent No.3/UCO Bank submits that there has been a material suppression of facts by the petitioners. It is submitted that Sale Notices pertaining to the properties at Plot No.42 Rani Jhansi Road and Samalakha Village had already been challenged before the DRT in SA/5/2025 and SA/20/2024 respectively, both of which stand dismissed. It is further submitted that a review of the dismissal order in SA/5/2025 was also Signature Not Verified Signed By:GAUTAM ASWAL Signing Date:31.05.2025 05:56:49 W.P.(C) 7939/2025 unsuccessful, however the petitioners have failed to assail the said dismissal orders before the DRAT, instead choosing to approach this Court. It is submitted that the orders passed in these securitisation applications under Section 17 of the SARFAESI Act have not been disclosed or annexed with the present petition, which is a suppression of material facts. It is submitted that the petitioner, choosing not to pursue the statutory remedies under the SARFAESI Act, cannot now seek the same reliefs by invoking the writ jurisdiction. Reliance is placed on the decisions in Celir LLP vs. Bafna Motors (Mumbai) Pvt. Ltd. and Ors2; Mardia Chemicals Ltd. and Ors. vs. Union of India and Ors. 3 and Bijnor Urban Cooperative Bank Ltd. vs. Meenal Agarwal and Ors.4 It is also submitted that the reliance placed by the petitioners on the decision in Plasto Pack, Mumbai (Supra) is misplaced since the same is prior to the enactment of the SARFAESI Act. Lastly, it is submitted that the OTS relied upon by the petitioner already stands rejected vide email dated 11.04.2025 and as of now there is no OTS before the Bank pending consideration.

6. Learned counsel for the respondent No.1 has also raised an objection as to the maintainability of the present proceedings.

7. Learned Senior Counsel for the respondent No.4 has supported the case of the petitioner and submits that the respondent No.4 is willing to go ahead with the OTS offer.

8. I have heard learned counsel for the parties and gone through the records.