- (1.) In this petition filed under Articles 226 /227 of the Constitution of India, challenge is to the orders dated 27.05.2011 and 24.08.2011 Annexures P-6 and P-9 respectively, whereby application of the petitioners for selling the mortgaged property under section 13(13) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "the SARFAESI Act") has been declined. Briefly, the facts necessary for adjudication of the controversy as narrated in the petition may be noticed. The petitioner-company is engaged in the business of trading of hosiery items, ready made garments and related items. On account of default and inability of the petitioner-company to pay back the dues of the respondent-bank, proceedings under Section 13(2) and 13(4) of the SARFAESI Act were initiated by the Bank proposing to sell mortgaged properties and hypothecated goods. The petitioner-company proposed to sell off the mortgaged properties in order to fetch the best price of the same and make payment to the Bank. For this purpose, the petitioner-company approached the Bank for settlement of loan facility under One Time Settlement Scheme (OTS) Copy of the proposal dated 25.03.2010 submitted by the petitioner-company is at Annexure P-l with the petition. The said proposal was finally approved by the bank vide letter dated 22.1.2011. The bank granted permission to the petitioner-company for selling the alleged mortgaged properties for a total sale consideration of Rs. 250 lacs. The petitioner-company thereafter entered into an agreement for sale of the property. It deposited Rs. 50 lacs in terms of the settlement but was unable to pay the remaining amount of Rs. 200 lacs by 22.3.2011. The petitioner company sought extension of time from the Bank. In the meantime, father of petitioner Nos. 2 and 3 expired and due to family circumstances, the balance amount could not be arranged in time. Vide letter dated 24.8.2011, Annexure P-9, the bank withdrew the one time settlement scheme granted in favour of the petitioners. Hence, this petition.
(2.) Learned counsel for the petitioners submitted that there was no remedy available to the petitioners against the impugned order passed under Section 13(13) of the SARFAESI Act as Section 34 bars jurisdiction of civil court and in such a situation, writ was the only remedy. It was submitted that the period which was allowed by the respondent-bank for discharging the liability for releasing the property could not be adhered to due to certain circumstances beyond the control of the petitioners. Elaborating the argument, it was urged that the father of petitioner Nos. 2 and 3 who was the Managing Director of the company had expired on 17.6.2011 and therefore, the petitioner-company was not able to follow the time schedule. It was next contended that there was statutory obligation which was cast on the Bank to have accepted the application of the petitioner-company. Once there was no mala fide and no alternative remedy of redressal being available, the petitioner-company is before this Court. Addressing on merits, it was contended that reasonableness and fairness of the action of the bank was under challenge in this writ petition as the Bank was too harsh in rejecting the application of the petitioners for sale of the mortgaged property for discharge of outstanding liability. There were sufficient grounds existed for condoning the delay and accepting the amount. It was also pointed out that the petitioners had prepared the demand drafts on 26.7.2011 for the balance amount of Rs. 2 crores which was to be paid in terms of the original settlement by the Bank. Besides the aforesaid, learned counsel for the petitioners had shown the willingness of the petitioners in paying additional amount of Rs. 50,00,000/- in addition to Rs. 2 crores already deposited in the High Court as submitted by learned counsel for the petitioners on 25.7.2012. It was highlighted that in this situation, the bona fide of the petitioner-company were clear. Learned counsel for the petitioners relied upon following judgments in support of his submissions:- i) Sat Kartar Ice and General Mills v. Punjab Financial Corporation, 2008 1 ISJ(Banking) 248. ii) State Bank of India v. Vijay Kumar, 2007 AIR(SC) 1689. iii) Smt. Periyakkal and others v. Smt. Dakshyani, 1983 2 SCC 127. iv) M/s Sardar Associates and others v. Punjab and Sind Bank and others, 2009 8 SCC 257. v) United Bank of India v. Satyawadi Tondon and others, 2010 AIR(SC) 3413. vi) Federal Bank Limited v. Sagar Thomas and others, 2003 10 SCC 733; vii) Punjab and Sind Bank v. Debts Recovery Appellate Tribunal and others, 2008 149 PunLR 203. viii) Mardia Chemicals Limited v. Union of India, 2004 138 PunLR 271. ix) ICICI Bank v. Shanti Devi Sharma and others, 2008 7 SCC 532.
(3.) Learned counsel for the respondents raised a preliminary objection in view of the judgment in Federal Bank Limited's case, to contend that the writ petition against private Bank was not maintainable. Another preliminary objection was raised with regard to delay and laches and prayer for dismissal of the writ petition was made on that ground. Refuting the contentions of the learned counsel for the petitioners, it was submitted by learned counsel for the respondents that the petitioners did not avail statutory remedy of filing objections under Section 13(3A) of the Act against notice issued under Section 13(2) of the SARFAESI Act on 6.6.2009 and, thus, the same stood waived. Further, remedy of appeal under Section 17 of the SARFAESI Act was maintainable against notice issued under Section 13(4) of SARFAESI Act.;