- (1.) The present civil writ petition has been filed under Articles 226 and 227 of the Constitution of India praying for issuance of a writ in the nature of mandamus for declaration that Securitization and Reconstruction of Financial Assets and Enforcement Security Interest Act, 2002 (hereinafter referred to as 'SARFAESI Act') is not applicable to potentially viable sick scheduled industrial undertakings and it would be the imperative duty of the respondents to rehabilitate it. Inter alia, a further writ in the nature of mandamus directing the respondents to perform their statutory duty under the industrial policy promulgated by the Government of India in public interest for rehabilitation of the sick industrial undertakings by financial institutions and commercial banks has been prayed for. Notice dated 16.06.2012 under Section 13(2) and dated 22.08.2012 under Section 13(4) of the SARFAESI Act have also been challenged.
(2.) The pleaded case of the petitioners is that the petitioners-firm is in the business of purchasing paddy, processing and manufacturing rice since 1983 in the name and style of M/s. Pawan Kumar & Co. and the unit of the petitioners is a scheduled industry under Heading 27 of Schedule 1 of the Industrial Development and Regulation Act, 1951 and being a valuable national asset is generating employment and earning revenue for the Government. The firm had been satisfactorily banking with State Bank of India and enjoying various credit facilities and with an object of improving business prospects for expansion, petitioners submitted a detailed business plan/proposal to the respondent-bank for taking over the facilities from the State Bank of India. After being fully satisfied, fund based cash credit limit of Rs. 10.55 crores after paying of the existing banker State Bank of India, was sanctioned on 01.01.2011 and cash credit account was opened on 05.01.2011. Various allegations have been made against the bank regarding the debiting of huge amounts from the petitioners' firm to adjust the outstanding dues of M/s. Ferozepur Gram Dal & Oil Mills without the consent of the partners/guarantors/authorized signatories of the petitionersfirm. Similarly, other amounts debited for the purposes of FDR and transferred in the name of Dharminder Kumar Mittal-petitioner no. 3 etc. have been pleaded and it has been further pleaded that the bank is misusing its position of dominance.
(3.) Accordingly, counsel for the petitioner has vehemently argued that the action of the bank declaring the account of the petitioner as a non performing asset on 04.05.2012 was not justified and the bank should have followed the instructions issued by the Reserve Bank of India and taken into consideration that it was their duty to rehabilitate the industry in public interest. Perusal of the file goes on to show that a demand notice under Section 13(2) of the SARFAESI Act was issued on 16.06.2012 wherein, the respondent-bank called upon the petitioners to discharge the entire liability of Rs. 11,71,56,701/- which had become due and outstanding on 15.06.2012 alongwith interest w.e.f. 16.06.2012 @2.25% p.a. above base rate with monthly rests. Reference was also made to the earlier notice dated 04.05.2012 wherein the petitioners were called to clear the outstanding amount of Rs. 11,51,96,414/-. The petitioners had filed detailed objections against the said notice on 11.08.2012 which was rebutted by the bank promptly on 16.08.2012 wherein, the objections were replied and details were given as to the amounts which were debited in the account. The bank, in its reply, stated that the petitioners had been advised to deposit the overdue amount on 04.05.2012 failing which, the account would turn into a non performing asset but the petitioners had failed to regularize the overdue amount. It was also noticed by the bank that the petitioners had stopped the activity of rice shelling unit without any notice to the bank and disposed of the hypothecated stocks i.e. rice and paddy without depositing the sale proceeds in the account of the bank. The turnover of the petitioner from 01.01.2012 to 03.05.2012 was only '1.51 crores whereas the total stocks as on 31.12.2011 were Rs. 14.88 crores. Thus, the bank noticed that the stocks had been siphoned off or the proceeds had been routed through some other bank and was an act to deceive the bank. It was also mentioned that there was no proposal for rehabilitation/re-schedulement which is pending with the bank and that in the objections of 289 pages, it was nowhere stated that the petitioner has any intention to regularize the account and repay the outstanding amounts. Thereafter possession notice dated 22.08.2012 under Section 13(4) of the SARFAESI Act was issued by the bank.;