M/S VETERAN SECURITY SERVICE & 2 ORS v. UNION BANK OF INDIA & 4 ORS

Advocate for the Petitioner : MR. A SARMA Advocate for the Respondent : SC, UBI - B E F O R E - HON’BLE THE CHIEF JUSTICE MR. R.M. CHHAYA HON’BLE MR. JUSTICE SOUMITRA SAIKIA ORDER Date : 03-08-2022 (R.M. Chhaya, CJ.) Heard Mr. A. Sarma, learned counsel for the petitioner. Also heard Mr. S. Dutta, learned counsel appearing for all the respondents. By way of this petition under Article 226 of the Constitution of India, the petitioner inter alia has prayed for the following reliefs:- “It is, therefore, prayed that this Hon’ble Court may be pleased to admit this Writ Petition, call for the Records and issue Rule calling upon the Respondents to show cause as to why a writ of and/or in the nature of Certiorari and/or any other Writ, order or direction of like nature shall not be issued declaring the impugned Notice dated 12.07.2022 (Vide Annexure-v) as well as the impugned decision to conduct i.e. auction sale to be illegal, arbitrary, improper, unfair and unreasonable and/or as to why a writ of and/or in the nature of mandamus and/or any other writ order or direction of like nature should not be issued directing and commanding the respondents to withdraw, recall, cancel the public notice dated 12.07.2022 (vide Annexure-v) and/or afford the petitioner further opportunity extending 180 days time to repay their outstanding dues in respondent bank. -AND- Pending disposal of the rule, further be pleased to pass interim order staying the public notice dated 12.07.2022 (Annexure-v) and/or also be pleased to pass any other or further suitable interim order/orders as to this Hon’ble Court may deem fit and proper. The record indicates that the respondent Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets Page No.# 3/6 and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and has followed the procedure as prescribed under the provisions of the SARFAESI Act. What is predominantly challenged in this petition is the possession notice issued under Rule 8(1) read with Section 13(4) of the SARFAESI Act. The petitioners have an efficacious alternative remedy by way of filing an appeal under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal and, therefore, no interference is called for in this petition. We are fortified in our view by the binding decision of the Hon’ble Apex Court in the case of Authorized Officer, State Bank of Travancore & Anr. –vs- Mathew K.C., reported in AIR 2018 SC 676, wherein it was observed as under: “9. The statement of objects and reasons of the SARFAESI Act states that the banking and financial sector in the country was felt not to have a level playing field in comparison to other participants in the financial markets in the world. The financial institutions in India did not have the power to take possession of securities and sell them. The existing legal framework relating to commercial transactions had not kept pace with changing commercial practices and financial sector reforms resulting in tardy recovery of defaulting loans and mounting non-performing assets of banks and financial institutions. The Narasimhan Committee I and II as also the Andhyarujina Committee constituted by the Central Government Act had suggested enactment of new legislation for securitisation and empowering banks and financial institutions to take possession of securities and sell them without court intervention which would enable them to realise long-term assets, manage problems of liquidity, asset liability mismatches and improve recovery. The proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the DRT Act’) with passage of time, had become synonymous with those before regular courts affecting expeditious adjudication. All these aspects have not been kept in mind and considered before passing the impugned order.