S.MANIKUMAR ,V.BHAVANI SUBBAROYAN,JJ. - (1.) The petitioners are praying to issue a Writ of Certiorarified Mandamus, to call for the records on the file of the 1st respondent in the impugned order in Crl.M.P. No. 8583 of 2017 dated 25.04.2017 and quash the same as illegal, arbitrary and permit them to raise their objections before the 1st respondent.
(2.) The brief facts of the case of the petitioners as averred in the Writ Petition are as follows:- 2. 1 The first petitioner is a proprietorship concern represented by the 2nd petitioner. The 3rd petitioner is the wife of 2nd petitioner. They are doing business in Iron and Steel for past 40 years and they being a SME unit, they were granted a loan of Rs. 100,00,000/- (Rupees one crore only) in the nature of Cash Credit Facility to meet the working capital requirements, by M/s.Axis Bank Limited, Kodambakkam Branch, Chennai. The third petitioner is the guarantor to the above loan amount. They had been paying interest and other charges from 2007 to 2016, without any default. 2. 2 They have also mortgaged the properties in the year 2011. The 2nd respondent classified the loan account as NPA without giving any information to them and it was as per the guidelines issued by the Reserve Bank of India. On 16.02.2016, the 2nd respondent issued a demand notice under Section 13(2) of the SARFAESI Act, in which, they claimed a sum of Rs. 1,30,28,176.78. Since the claim of interest at the rate of 15.75% was exorbitant, the petitioners have requested the 2nd respondent to withdraw the above notice and to regularise the account by removing the classification as NPA. Subsequently, the 2nd respondent withdrew the demand notice dated 16.02.2016, but on 21.03.2016 issued a second demand notice with the reduced interest at the rate of 15.65% from 15.75%, and arrived at a total demand of Rs. 1,12,12,709.39. 2. 3 The petitioners have requested the bank to give them 10 days time to pay a sum of Rs. 15,00,000/- and the same has also been acknowledged by the 2nd respondent. On 05.07.2016 the 2nd respondent sent a possession notice under Section 13(4) of the SARFAESI Act to take symbolical possession of the property. Subsequently, the petitioners have paid a sum of Rs. 5,00,000/- on 29.09.2016. The petitioners also gave a letter dated 06.10.2016 to the 2nd respondent, requesting waiver of interest and also for one time settlement of Rs. 90,00,000/-.The 2nd respondent did respond, but issued a Notice Prior to Intimation dated 13.10.2016 to Reserve Bank of India as a Wilful Defaulter. Later, the petitioners have given a suitable reply dated 28.10.2016. The 2nd respondent has sent a Rejoinder dated 22.11.2016 and simultaneously, approached the learned Chief Metropolitan Magistrate, Allikulam, Egmore, Chennai-3 under Section 14 of the SARFAESI Act and got an order for taking physical possession of the properties mortgaged by the petitioners. A Commissioner was also appointed by the learned Chief Metropolitan Magistrate, Allikulam, Egmore, Chennai-3. On 15.06.2017, the Advocate Commissioner informed the petitioners about the said order and the petitioners have received the order copy on 17.06.2017 and filed SARFAESI Appeal before the Debts Recovery Tribunal-II, Chennai in S.A. No. 128 of 2017 for the following relief:- a) Set aside the order dated 25.04.2017 received by the Appellants on 17.06.2017 passed by the Hon'ble Chief Metropolitan Magistrate, Allikulam, Egmore, Chennai in Crl.M.P. No. 8583 of 2017 and quash the same as null and void; and b) Grant such other or any other reliefs that this Hon'ble Tribunal may deem fit and proper under the circumstances of the above case and thus render justice. 2.4 The petitioners have also stated that their intention is to challenge the Possession Notice dated 05.07.2016 but inadvertently they have been advised so, and therefore, they have filed the said Sarfaesi Appeal only to challenge the order passed by the learned Chief Metropolitan Magistrate, Allikulam, Egmore, Chennai-3 in Crl.M.P.No. 8583 of 2017 dated 25.04.2017 which they received on 17.06.2017 and now they have been advised to challenge the Possession Notice dated 05.07.2016 issued by the 2nd respondent under Section 13(4) of the SARFAESI Act, 2002. They had filed a Change of Vakalath on 15.07.2017 along with applications to condone the delay in preferring the appeal challenging the Possession Notice dated 05.07.2016 and to amend the prayer in the above SARFAESI Appeal for the following relief, instead of the earlier relief: a) to set aside and quash the entire proceedings initiated by the 2nd respondent under Section 13(4) of the SARFAESI Act, 2002 and consequently, restore possession; and b) to award the cost of the application and to grant compensation under Section 19 of the Act and such other relief's as this Hon'ble Tribunal may deem fit and proper in the circumstances of the case and thus render justice. 2. 5 The above S.A. No. 128 of 2017 is posted for hearing on 07.08.2017. The possession is still with the petitioners and the 2nd respondent has neither issued notice under Section 13(4) of the Act nor passed any order under Section 13(3) of the Act, so as to proceed against the petitioners for taking possession. 2. 6 The petitioners were victims of the mala fide conduct of the 2nd respondent, though they were ready to settle the loan amount and offer one time settlement, the 2nd respondent ought to have given an opportunity to settle the loan amount and passed an order in accordance with Section 13(3) of the Act. Therefore, the proceedings of the 2nd respondent under Section 14 of the SARFAESI Act is misconceived, mala fide and excess exercise of powers and the 2nd respondent has no authority to invoke section 14 of the Act. Hence, the petitioners are before this Court challenging the order dated 25.04.2017 passed by the learned Chief Metropolitan Magistrate, Egmore, Chennai-3 made in Crl. M.P. No. 8583 of 2017.
(3.) Heard the learned counsel for the petitioner and perused the materials available on records.;