IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.16427 of 2011 Manoj Kumar Late Nand Kishore Singh Resident Of Village A/32, P.C. Colony, Kankarbagh, Police Station Kankarbagh, District Patna, Presently Residing At Flate No.207, Gyan Apartment Near Rajendra Nagar, Behind Liliput Show Room, Main Road, Kankarbagh, Police Station Patarkar Nagar, Patna - 20, District Patna … Petitioner Versus 1. The Allahabad Bank Through The Chief Manger Zonal Office, Budh Marg Patna 2. The Senior Manager Allahabad Bank, Exhibition Road, Patna 3. The Senior Manager Allagabad Bank , Exhibition Road, Patna … Respondents ----------------- with Civil Writ Jurisdiction Case No.17983 of 2011 Ram Awtar Singh S/O Late Raj Kumar Singh R/O Village- Kothar, Police Station- Fatehpur, District – Gaya …Petitioner Versus 1. The Allahabad Bank Through The Chief Manager Zonal Office, Budh Marg, Patna 2. The Authorized Officer Cum Chief Manager Allahabad Bank, Zonal Office, Budh Marg, Patna 3. The Senior Manager, Allahabad Bank, Exhibition Road Branch, Patna … Respondents ------------ For the Petitioner : Mr. Devendra Prasad Singh, Advocate in both cases. For the Respondents : Mr. Ajay Kumar Sinha, Advocate in both cases. ------------ 06/ 24.11.2011 Heard learned counsel for the petitioner and learned counsel for the respondents. 2. Petitioner of the first case is the borrower, whereas, the petitioner of the second case is the guarantor of the loan taken from respondent-Bank. 3. C.W.J.C. No. 16427 of 2011 has been filed by the borrower on 19.09.2011 challenging the demand notice dated 08.06.2010 issued by the respondents under section 13(2) of the 2 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as `the Act’ for the sake of brevity) and also challenging possession notice dated 13.09.2011 issued by respondent-authorities under section 13(4) of the Act. An interlocutory application bearing I.A. No. 6647 of 2011 has been filed by the petitioner for adding one more relief challenging the auction notice dated 20.09.2011, issued by the authorities under the provisions of the Security Interest (Enforcement) Rules, 2002 ( hereinafter referred to as `the Rules’ for the sake of brevity). 4. C.W.J.C. No. 17983 of 2011 has been filed by the guarantor of the loan on 12.10.2011 for the same reliefs, as detailed above. 5. Learned counsel for the petitioner specifically claims that against the demand notice dated 08.06.2010 issued under section 13(2) of the Act, he filed an objection under section 13(3A) of the Act, which was cursorily rejected by the authorities without assigning any reason on 30.07.2010, whererafter, the petitioner sent his letter before the said authority, but without deciding the same, possession notice was issued by the authorities under section 13(4) of the Act on 13.09.2011 and when the first writ petition was filed on 19.09.2011 immediately thereafter sale notice had been issued on 20.09.2011. 6. Learned counsel for the petitioner further argued that while issuing possession notice under section 13(4) of the Act, proper procedures as per Rules 4 and 5 of the Rules were not followed and the authorities had taken possession of the land of the 3 guarantor and had put it on auction sale. In this regard, he relied upon a decision of a Bench of this Court in case of Shyam Kishore Prasad and another vrs. Bank of Baroda & Ors., reported in 2009(1) PLJR 619, paragraphs 11 and 17 whereof read as follows :- “11.Here I may point out that the right to choose is undeniable. That is recognized by SARFAESI Act itself but the action of choosing is not dependent on the sweet will of the Bank, for Bank functioning to finance and acting in public law domain is bound by Article 14 of the Constitution in every aspects of its decision making power which affects the rights of third party. This decision making power in conformity with Article 14 does not deter from the right of the Bank to take a decision in the matter of which property to sell or not. So long as the decision is in conformity with the principle enshrined under Article 14 of the Constitution i.e. Bank must show that while taking a decision it acted bonafide, fairly and non in arbitrary, non discriminatory manner. If it is shown that Bank is preferring one debtor to another or proceeding against a debtor leaving other debtor or is otherwise conducting itself without reason or rational then surely the exercise of power would be arbitrary. In other words, though the Bank has discretion in chosing the property or the person from amongst many available to it for the purposes of satisfying its debts, surety the discretion is neither absolute nor unfettered nor unguided or unbriddled. The discretion must be exercised based on sound principles and in transparent manner giving no party a cause to complain. 17. On these facts alone, the exercise of Bank in terms of 4 Section 13(4) cannot be held to be consistent with the principle enshrined under Article 14 of the Constitution. The actions are thus set aside. This does not, however, absolve the surety/guarantor/mortgagor from their liability. Bank would be at liberty to issue fresh notices in terms of Section 13(1) of the Act to all such persons and on response being received, after bona fide consideration of the respective stands taken, will dispose them of in terms of section 13(3A) of the Act and thereafter proceed in accordance with law.” 7. On the other hand, learned counsel for the respondents submits that the definition of borrower as per section 2(f) includes the guarantor. He further submits that the first writ petition has been filed by the borrower and the second writ petition has been filed by the guarantor although their claims are contradictory. He also avers that in the decision relied upon by the petitioner in case of Shyam Kishore Prasad and another (supra), there was an option available with the authorities as the assets of the borrower as well as of the guarantor both were pledged as securities, but in the instant case there is no option before the authorities as the property of only the guarantor has been pledged as security. In the said circumstances, the aforesaid case law does not apply to the facts and circumstances of these cases. 8. From the admitted facts of these cases, it is quite apparent that after the demand notice dated 08.06.2010 under section 13(2) of the Act, the petitioner filed an objection under section 13(3A) of the Act, which was rejected by the authorities on 26.07.2010, but against the said rejection the petitioner did not move 5 this Court as no appeal has been provided against that order. Mere filing of applications before the authorities cannot be held to be valid and proper challenge. In the said circumstances, the authorities cannot be said to be unjustified in issuing the possession notice on 13.09.2011. 9. Against such possession notice under section 13(4) of the Act, an appeal is provided under section 17 thereof before the Debt Recovery Tribunal and it was for the petitioners to move before the said authority and raise all objections including the challenge to the procedure adopted by the authorities. The said course of appeal being open to the petitioners, this Court does not find any justification to consider the merit of these cases. The petitioners are at liberty to challenge the said notice before the authority concerned. 10. Thus this Court does not find any reason to interfere into the matter as the questions of fact are also involved, which can be properly decided by the appellate authority. Accordingly, both the writ petitions are disposed of. MPS/ ( S. N. Hussain, J.)