- (1.) When this writ petition is taken up for hearing, learned counsel appearing on behalf of the petitioner submitted that he does not press the prayer for quashing of notice dated 16.7.2011 issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter to be referred as the SARFAESI Act or the said Act).
(2.) The main grievance of the petitioner is that the respondent Bank issued possession notice dated 20.9.2011 (Annexure-8) and has taken possession of the mortgage property under Section 13(4) of the said Act without passing any orders on the petitioner's objection filed under Section 13(3-A) of the said Act.
(3.) According to the petitioner, the company is engaged in the business of manufacturing and processing of coal into coke. In the year 2004 one M/s Dudani Fuels Pvt. Ltd, Dhanbad applied for certain credit facilities from the respondent-Bank. The petitioner had stood as a guarantor by extending Equitable Mortgage of its land, building, plant and machinary. Due to poor market conditions, the principal borrower requested the respondent Bank to enhance and review the credit facilities which was accepted by the letter of the respondent dated 25.4.2009. It was informed to the principal borrower that as the account is a restructured one, if the account remains out of order for a period of more than 90 days, it will be categorized as NPA as per the Reserve bank of India (RBI) norms. When the principal borrower could not be able to regularize the out of order account, it made a compromise proposal with the respondent-Bank, which was duly accepted by the respondent-Bank by letter dated 4.2.2011. The principal borrower who had already paid Rs.65 Lakhs, paid Rs. 20 lacs towards the compromise settlement. The said amount was appropriated. The principal borrower, however, could not make full payment as per compromise settlement. The respondent-Bank, then, issued a notice dated 16.7.2011 under Section 13(2) of the SARFAESI Act to the principal borrower and its guarantors including the petitioner directing them to deposit the entire dues within a period of 60 days. It was mentioned that if they fail to comply with the same, measures under Section 13(4) of the Act shall be taken. On receipt of the aforesaid notice dated 16.7.2011 the petitioner filed a detailed objection under Section 13(3-A) of the said Act before the Authorized Officer of respondent-Bank denying its liability and disputing the allegations mentioned in the notice (Annexure-7). As per the provision under Section 13(3-A) of the said Act it was mandatory obligations for the respondent-Bank to dispose of the said objection of the petitioner before taking any action under Section 13(4) of the Act, but in complete disregard of the said provisions, the respondent-bank issued notice dated 20.9.2011(Annexure-8). The respondent-Bank, in purported exercise of power under Section 13(4) of the Act, subsequently took possession of the mortgaged property. It has been stated that the petitioner's objection was subsequently said to be disposed of by letter dated 21.9.2011 (Annexure-9) and that too by the Advocate, not by an authorized officer. It has been contended that the possession notice (Annexure-8) as well as the procedure of taking possession of the mortgaged property under Section 13(4) is wholly illegal and arbitrary and the same is violative of the mandatory provision of Section 13(3-A) of the said Act.;