THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR W.P.No.5210 of 2011 Date of Order: 09-03-2011 Between: M/s.Shakthi Industries rep. by its Managing Partner Davala Narayana Rao and others ..Petitioner And 1. Authorized Officer, ICICI Bank Limited and others. ..Respondents The Court made the following Order: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE N.RAVI SHANKAR W.P.No.5210 of 2011 Oral Order: (Per Hon’ble Sri Justice A.Gopal Reddy) 1. The petitioner availed the Over Draft facility from the respondent—Bank for a sum of Rs.1,66,00,000/-. After availing the said facility when the petitioner committed default in repayment of loan amount, a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the Act”) has been issued on 18-03-2010 calling upon the petitioner to repay the total outstanding amount of Rs.2,06,75,892.59 ps. as per the particulars mentioned in Annexure— B which outstanding has been arrived after giving credits to the part payment made by the petitioner. To which the petitioner failed to submit its objections within the statutory period of 60 days. Meanwhile, Possession Notice under Rule 8(1) and (2) of the Security Interest (Enforcement) Rules, 2002 (for short “the Rules”) was issued by the Bank on 25-08-2010. On issuing Possession Notice, the petitioner filed objections on 31-08-2010 and after rejecting the said objections notice under Section 13(4) of the Act was also issued by the Bank, which was published in newspapers on 31-08-2010. Questioning the notice issued under Section 13(4) of the Act W.P.No.23599 of 2010 was filed. When the writ petition was taken up for consideration, counsel for the petitioner as well as Bank represented that the petitioner was given extension of time till 24-12- 2010 by letter dated 18-12-2010 pursuant to the one time settlement offer made by the petitioner to discharge the debt. Considering the representation made by the learned counsel for the petitioner as well as respondent—Bank, this Court granted three weeks further time for complying the settlement offer, failing which the Bank is at liberty to proceed with the matter as per law. 2. As the writ petitioner has not paid the amount as per one time settlement offer, the respondent—Bank filed Crl.M.P.No.518 of 2011 before the Chief Metropolitan Magistrate, Vijayawada under Section 14 of the Act to take physical possession of the schedule property mortgaged with them and deliver the same to it; to appoint advocate commissioner for taking possession of the property by taking inventory of articles etc. On Magistrate passing the orders, the present writ petition has been filed questioning the notice issued under Section 13(2) and also Section 13(4) of the Act. 3. The learned counsel for the petitioner, Mr.C.Ramachandra Raju, contends that before issuing notice under Section 13(2), mandatory requirement of declaring non-performing asset has not been complied with and since there is no default of loan amount, the asset cannot be declared as non-performing asset. Further, as per the guidelines issued by the Reserve Bank of India, Statement of Account has to be furnished along with Section 13 (2) notice, which is mandatory. He also contends that the objections filed by the petitioner to the notice issued under Section 13(2) of the Act have not been considered by the Bank before issuing Section 13(4) notice. Therefore, issuance of 13(4) notice is total non-application of mind. When one time settlement has been arrived at between the parties, three weeks’ time was granted by this Court to enable the petitioner to discharge the loan amount; when the petitioner sought some more time for payment of amount due under one time settlement, the Bank is not justified in proceeding under Section 14 of the Act. The learned counsel also contends that before passing orders on the petition filed by the Bank, the Magistrate is under obligation to issue notice to the petitioner, but without issuing any notice the Magistrate has passed the order for taking possession of the property, which is void and unsustainable. The respondent—Bank has not adverted to the plea taken by the petitioner in the writ petition, therefore, it is deemed to have been not controverted and the same should be accepted. He further contends that the petitioner should be given some time for discharging the loan amount and the petitioner is ready to pay a sum of Rs.10,00,000/- immediately and the balance amount within the time stipulated by this Court. 4. We do not see any merit in the contentions advanced by the learned counsel for the petitioner because once the petitioner failed to submit the explanation within 60 days on issuing notice under Section 13(2) of the Act the Bank issued Possession Notice under Rule 8(1)(2) of the Rules on 25-08-2010. On publishing Section 13(4) notice on 31-08-2010 objections were filed by the petitioner on the same date i.e. 31-08-2010. Therefore, the petitioner cannot contend that issuance of 13(4) notice and its publication is non-application of mind as a result of non-consideration of the objections filed. Thereafter, the petitioner filed W.P.No.23599 of 2010 before his Court questioning the notice issued under Section 13(4) of the Act and meanwhile arrived at one time settlement with the Bank, which was rightly agreed by the Bank by proceedings dated 07-12-2010 for payment of Rs.1,85,00,000/- payable by 15-12-2010 and thereafter, the time was extended upto 24-12-2010. The said writ petition was disposed of at the request of the petitioner granting three weeks’ further time for compliance i.e. payment of Rs.1,85,00,000/- as agreed by way of one time settlement, failing which the Bank is at liberty to proceed with the matter as per law. 5. Admittedly, the petitioner has not complied with the conditions imposed by this Court in extending the time for one time settlement; therefore, it is not open for the petitioner to contend now that the Bank has to necessarily extend the time and this Court can issue Mandamus by accepting Rs.10,00,000/- offered by it, which virtually amounts to reviewing the earlier order passed by this Court. If the Bank failed to comply the mandatory requirement, viz., in declaring the asset as non-performing asset before issuing notice under Section 13(2) of the Act followed by 13(4) notice, the same cannot be agitated in the present writ petition once again having challenged the same in the earlier writ petition—W.P.No.23599 of 2010 and arrived at one time settlement with the Bank and suffered a consent order from this Court. Against the order passed by the Bank under Section 13(4) of the Act, statutory appeal under Section 17 of the Act lies to the appellate forum constituted under the Act. Without exhausting the said alternative remedy of appeal the petitioner cannot invoke the jurisdiction of this Court to decide the dispute question of fact. Equally, the contention advanced by the learned counsel for the petitioner that the averments made by the petitioner deemed to have been accepted also do not merit consideration; unless Rule Nisi is issued calling upon the respondents, the Bank is not under obligation to file counter controverting the facts. Only in case where the Court issues Rule Nisi calling upon the respondents to disclose their defence and failure to do so it can be presumed that the averments made by the petitioner have not been controverted and deemed to have been accepted. We also see no merit in the contention advanced by the learned counsel for the petitioner that the Magistrate is under obligation to issue notice before passing the order. No statutory provision is brought to our notice about issuance of notice before passing the order by the Magistrate. Since it is a special scheme envisaged under the Act, for taking possession it is always open for the Magistrate to pass appropriate order on the Bank/financial institution satisfying that it is entitled to take possession of the property on issuance of notice under Section 13(4) of the Act. 6. In view of rejection of all the contentions advanced by the learned counsel for the petitioner, we do not see any ground to entertain the writ petition and it is accordingly dismissed. No order as to costs. 7. Immediately after dictating the judgment, the learned counsel for the petitioner made an oral application seeking certificate of leave for appeal to the Supreme Court. We find no merit in the oral application, since no substantial question of law of general importance is involved requiring the same to be decided by the Supreme Court. The Application is accordingly rejected. _________________ A.GOPAL REDDY, J. ________________ N.RAVI SHANKAR,J. 09-03-2011 Murthy