IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.9266 of 2009 JAI KRISHNA UPADHYAY Versus THE STATE OF BIHAR & ORS ----------- 2 6.8.2009 The petitioner prays for quashing of the decision of the Bank dated 14.6.2008 by which it declared the account of Jai Hari Traders as Non Performing Asset. The petitioner is the proprietor of Jai Hari Traders and it has been granted cash credit facility up to Rs.20 lakhs by the respondent Bank. The goods of the firm were hypothecated against the cash credit account and the father of the petitioner namely Haridwar Upadhyay stood guarantor and mortgaged his house property by way of collateral security. The stand of the Bank is that the petitioner firm failed to repay the loan in time and as such it was declared as Non Performing Asset on 3.11.2007. Thereafter a notice under section 13(2) of the SARFAESI Act, 2002 was issued followed by action under section 13(4) of the Act by which the possession of the house was taken over by the Canara Bank. Learned counsel for the petitioner submits that in view of the decision reported in the case of Mardia Chemicals Limited Vs Union of India, reported in 2004 AIR SCW 2541 a unit cannot be declared Non Performing Asset unless and until guide lines laid down by the Reserve Bank of India is followed. He further submits that the petitioner is willing to repay the entire loan if reasonable 2 KHAN installment is fixed. He submits that prior to September, 2008 the petitioner had deposited a sum of Rs.10 lacs in the Bank and apart from that he had deposited further sum of Rs.10 lacs between 25.9.2008 to 31.3.2009. As per the details of the Bank statement, still a sum of Rs.16, 28,213.29 remains outstanding as on 28.7.2009. Learned counsel appearing on behalf of the Canara Bank has relied upon a decision in the case of Transcore Vs Union of India, reported in A.I.R. 2007 SC 712 wherein the Apex Court has considered the object of N.P.A. Act as well as recourse to the RDDBFI Act, 1993 visa vis writ proceeding under Articles 226 and 227 of the Constitution of India. Having heard counsel for the parties, this court is of the view that the petitioner should file an appeal under section 17 of the SARFAESI Act before the Debts Recovery Tribunal taking a plea that he is willing to repay the entire loan if reasonable installment is fixed. In order to enable the petitioner to file the aforesaid appeal, no coercive action would be taken against him for three weeks. With the aforesaid observations and directions, this writ petition stands disposed of. (S.P.Singh,J)