M/s. Coastal Andhra Agri Feed Technologies v. The Assistant General manager, Regional Office, Syndicate Bank, Vijayawada, Krishna District

(Per Hon’ble Sri Justice A. Gopal Reddy) On declaring the loan account of the petitioner-firm as non- performing asset and on issuing notice contemplated under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘Act’) on 5.12.2006 followed by final notice under Section 13(4) of the Act on 7.6.2007 and publication of notice putting the secured property and machinery of the petitioner-firm for sale to be held on 7.9.2009, the present writ petition is filed contending that though the respondent-Bank sanctioned the loan in 1999 and the commercial production of the petitioner-firm started in 2001, the Running Capital was not disbursed, and that due to the internal problems in 3rd respondent-Bank, CBI enquiry was ordered and the then Manager was suspended, and that after the investigation was completed, as there is huge delay in disbursing the Running Capital, the 3rd respondent-Bank announced the Rehabilitation Package on

3.11.2004 and disbursed the amounts only in the month of February, 2005 and within one year i.e. on 5.12.2006 proceedings under the Act are initiated without giving breathing time to the petitioner-firm and therefore, the impugned proceedings are illegal and arbitrary. In paragraph 7 of the affidavit filed in support of the writ petition, it is also stated that though various amounts were paid by the petitioner-firm on different dates totaling to Rs.12,64,000/- for crediting the same to all the accounts, the 3rd respondent-Bank credited all the amounts to only one account and thereby the petitioner-firm was burdened with penal interest and those accounts were declared as non-performing assets. Meanwhile, the petitioner-firm received a caveat filed by the 3rd respondent-Bank before the Debts Recovery Tribunal, Visakhapatnam in the month of July, 2009 stating that the possession notice, dated

7.6.2007 was issued and symbolic possession of the property was taken, which, according to petitioner-firm was not received at all. Thus the petitioner-firm filed the above writ petition raising many factual aspects which are required to be considered by a Tribunal constituted under the Act to which the appeal lies against the impugned notice passed under Section 13(4) of the Act and the sale notice issued on 29.8.2009 by the respondent-Bank. This Court by order, dated

8.9.2009 while ordering notice before admission stayed the auction notification on condition of petitioner-firm depositing a sum of Rs.20 lakhs. Now, it is represented by the learned counsel for the petitioner- firm that the said amount has not been deposited so far but the petitioner made a representation to the respondent-Bank seeking one time settlement and the Bank is also agreeable for the said scheme. If that be the case, filing the present writ petition appears to be only a pressure tactic resorted by the petitioner to force the Bank to come for the terms of the petitioner-firm for one time settlement. Suffice it to say, in view of the alternative remedy available to the petitioner and inasmuch as various disputed questions of facts are raised, which cannot be gone into by this Court sitting under Article 226 of Constitution of India, the writ petition deserves to be dismissed. The writ petition is accordingly dismissed granting liberty to the petitioner to approach the respondent-Bank with its proposal for one time settlement and it is for the respondent-Bank to consider the same. No order as to costs. _________________ (A. GOPAL REDDY, J.) ____________________ (SAMUDRALA GOVINDARAJULU, J.) NOVEMBER 06, 2009 TSR