IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.T.SANKARAN MONDAY, THE 7TH APRIL 2008 / 18TH CHAITHRA 1930 W.A.No.824 of 2008 ---------------------------------------- AGAINST THE JUDGEMENT IN W.P.(C).NO.4061/2008 (H) DATED 19/02/2008. .................... APPELLANT/PETITIONER:- -------------------------------------- MR.PUNNASSERI RAMDAS, RESIDING AT 17/681, “RISHIKESH”, INDIRA GANDHI LINK ROAD, CALICUT-4, KERALA. BY ADV. SRI.VADAKARA V.V.N.MENON & SRI.MATHEWS J.NEDUMPARA. RESPONDENTS/RESPONDENTS:- ------------------------------------------------ 1. CENTRAL BANK OF INDIA, REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, CENTRAL BANK HEADQUARTERS, “CHANDRAMUKHI”, NARIMAN POINT, MUMBAI - 400 021. 2. MR.R.SOMANATHAN NAIR, AUTHORISED OFFICER, CENTRAL BANK OF INDIA, FIRST FLOOR, METRO PLACE, OPP. ERNAKULAM TOWN RAILWAY STATION, KOCHI-18. 3. THE BRANCH MANAGER, CENTRAL BANK OF INDIA, CHERURTHI ROAD, CALICUT, KERALA. 4. UNION OF INDIA, REPRESENTED BY THE SECRETARY, DEPARTMENT OF BANKING, MINISTRY OF FINANCE, JEEVANDEEP BUILDINGS, PARLIAMENT STREET, NEW DELHI. R1 & R3 BY STANDING COUNSEL SRI.DEVAN RAMACHANDRAN. R4 BY ASST.SOLICITOR GENERAL OF INDIA SRI.P.PARAMESWARAN NAIR. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 07/04/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- H.L.DATTU, C.J. & K.T.SANKARAN, J. ------------------------------------------ W.A.No.824 of 2008 ------------------------------------------ Dated, this the 7th day of April, 2008 JUDGMENT H.L.Dattu, C.J. This appeal is directed against the orders passed by the learned Single Judge in W.P.(C) No.4061 of 2008 dated 19th February, 2008. By the impugned order the learned Single Judge has rejected the writ petition. That is how the petitioner in the writ petition has presented this writ appeal. 2. Petitioner is a borrower of certain funds from the first respondent Bank. Since he had defaulted in payment of the amounts due to the Bank, the Bank has issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('Securitisation Act, 2002' for short). Aggrieved by the said notice petitioner was before this Court for the following reliefs. They are as under: “(a) to issue a writ of certiorari or any other appropriate writ or order quashing Sections 13(2), 13(3)A and section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 as unconstitutional and void inasmuch as the said sections permit coercive recovery of amounts allegedly due by a secured debtor to a secured creditor without there being any kind of adjudication of the alleged debt or dues by the secured debtor to the secured creditor and thus in violation of audi alteram partem and, further, to quash section 13(3)(A) of the Securitsation Act as unconstitutional and void inasmuch as it does not expressly provide for a hearing, including an oral hearing to the secured debtor before his objections against notice under section 13(2) W.A.No.824 of 2008 2 of the Act are considered or, in the alternative, to read into the said section a right of hearing, including right to summon, cross- examine, the right to offer evidence and the right to oral hearing; (b) to issue a writ of certiorari or any other appropriate writ or order quashing Sections 13(2), 13(3)(a) and 13(4) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as unconstitutional and void inasmuch as it does not expressly provide for an independent mechanism by which the disputes, if any, between a secured creditor and secured debtor as to the factum and quantum of debt or liability, if any, is adjudicated before coercive measures under section 13(4) are invoked and, further, to declare that existence of such a mechanism whereby disputes are not only determined independently and impartially but justice is also manifestly and seemingly done as well, is imperative for the Securitisation Act to pass the test of constitutionality and read into the said section such right to a borrower by judicial law making as has been laid down in Menaka Gandhi's case; (c) to issue an appropriate writ or order quashing Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 which bars a remedy of civil suit, even while the said Act permits dispossession of the secured asset at the hands of the secured creditor even without any kind of adjudication, as unfair and arbitrary; (d) to issue an appropriate writ or order declaring that the 2nd Respondent – authorized officer is not competent to act as an authorized officer as he is an interested party to the proceedings under Section 13(3)(A) and further to quash his notice dated 11th W.A.No.824 of 2008 3 July, 2007 as also his letter dated 3rd October, 2007 threatening coercive action against the Petitioner under section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (e) For such other and further reliefs in the nature and circumstances of the case may require be granted.” 3. Learned counsel appearing for the appellant would submit that before quantification of any liability by the Bank there must be an adjudication by an independent authority and that too after affording an opportunity of hearing to the appellant. Since that has not been done, according to the learned counsel for the appellant, the provisions of Section 13(2) and other provisions of the Securitisation Act, 2002 require to be declared as unconstitutional and void. 4. We are not impressed with the argument of the learned counsel for the appellant. In fact in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311, at paragraph 4 of the judgment, the Supreme Court noticed the contentions canvassed by the petitioners before the apex Court. One of the contentions was that without there being any adjudication the Bank cannot be quantifying the liability towards the Bank from a borrower. The apex Court after noticing all the contentions has upheld the provisions of the Securitisation Act, 2002. 5. In view of what has been stated by the apex Court in Mardia Chemicals' case, in our opinion, the relief sought for by the petitioner in the writ petition is rightly rejected by the learned Single Judge. We do not see any W.A.No.824 of 2008 4 error in the orders passed by the learned Single Judge which would call for our interference in appeal. Therefore, the writ appeal requires to be rejected and it is rejected. 6. Consequently, I.A.No.376 of 2008 is also rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (K.T.SANKARAN) JUDGE vns