M.Katju, J. - (1.) This writ petition has been filed praying for a writ of mandamus declaring Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the Act) as ultra vires and for quashing the notices dated 31.12.2002 Annexures 2 and 3 to the writ petition.
(2.) We have heard the learned Counsel for the parties.
(3.) The petitioner No. 1 is a private limited company. The petitioner No. 1 took loans from respondent No. 1 (the State Bank of India) and U.P. Financial Corporation. It is alleged that the present secured loan outstanding from U.P. Financial Corporation is Rs. 137.89 lakhs as principal amount, and from respondent No. 1 is Rs. 39 lakhs as principal amount. The petitioner No. 1 was having a total cash credit limit of Rs. 37 lakhs from the respondent No. 1. A dispute arose between the petitioners and the respondent No. 1 in June 1995 owing to clean bill limits (discounting) facility and the Bank stopped accepting the same for discounting. It is alleged that for this reason the company stopped operations with the Bank and offered to settle the same by way of one time settlement in 1999 at Rs. 32 lakhs. It is alleged in paragraph 6 of the writ petition that this was agreed and recommended by the Branch, and the promoters got Rs. 10 lakhs deposited from a third party in no lien account with the Bank to facilitate the same.;