HIGH COURT OF CHHATTISGARH : BILASPUR Writ Petition (0 No.7133 of 2008 PETITIONERS RESPQNDENTS 1 M/s Gauri Ispat Pvt. Ltd., a company duly registered under the relevant provisions ofthe Companies Act, 1956, through its Director Shri Brijjeevan Rai, son of Shri Ramvriksh Rai, having its registered office at Hote! Gauri Building, A-25, South Gangotri, Supela, Bhitai, District Durg (CG). 2 Brijjeevan Rai, son of Shri Ramvriksh Rai, aged about 46 years, resident of House No. 135/136 (Opp. House No.262), Street No.5, B, Shanti Nagar, Kokha, Bhilai, Tahsil & District Durg (CG). Versus 1 Union of India, through the Secretary, Ministry of Finance, Dhaula Kuan, New Delhi. 2 The Reserved Bank of India, a statutory body constituted under the relevant provisions of Reserve Bank 6f India Act, 1934, Ford, Mumbai. 3 Syndicate Bank, a banking company duly incorporated under the relevant provisions of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 having inter- alia amongst other branches a branch office at Maurya Picture Complex, G.E. Road, Bhilai, District Durg. (Writ petition under Article226 ofthe Constitution oflndia) Single Bench : Hon'ble Shri Satish K. Agnihotri, J -/Present: Shri B.P. Sharma, counsel for the petitioners. ORAL ORDER (Passed on this 9th day ofApril, 2009) Challenge in this petition is to the notice dated 12-9-2008 (Annexure ~ P/10) issued by the respondent No.3 -- Syndicate Bank under the provisions ofSection 13 (2) ofthe Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (forshort ^-•: "the SARFAESI Act}') calling upon the petitioner to discharge his liabilities within a period of60 days from the date ofthe notice, interalia, a direction is sought for restructuring/re-scheduling of the account of the petitioner and a direction to the respondent No.2 Reserve Bank of India (for short "the RBI") to issue appropriate direction to the banks before taking recourse to the provisions ofthe SARFAESI Act. 2) The facts, in nutshell, which are relevant for adjudicationof the case, are that the petitioners obtained credit facility from the respondent No.3 - Syndicate Bank for a term loan of Rs.900.00 lacs, working capital of Rs.470.00 lacs and non-fund based limit of Rs. 100.00 lacs. In default a notice under Section 13 (2) of the SARFAESI Act was issued. Reply to the notice dated 12-9-2008 was submitted by the petitioners on 10-11-2008. Receipt of the reply dated 10-11-2008 was acknowtedged by the respondent No.3 on 15-11-2008 (Annexure- P/12). 3) It is not clear asto whether an order under the provisions of Section 13 (4) of the SARFAESI Act has been passed. However, even if the petitioners are aggrieved by the notice, without waiting for the actionable order, at this juncture the petition is premature. Thus, there is no ground to entertain this petition underArticle 226 ofthe Constitution of India, atthis stage. No cause of action arises, as the reply to the said notice has also been filed by the petitioners. 4) In Transcore vs. Union of India and Another1, the Supreme Court observed as under: "24. Section 13(3) inter alia states that the notice under Section 13(2) shall give details of the amount payable by the borrower as also the details of the secured assets intended to be enforced by the bank/FI. In the event of non-payment of secured debts by the borrower, notice under Section 13(2) is given as a notice of demand. It is very similar to notice of demand under Section 156 of the Income Tax Act, 1961. After classification of an account as NPA, a last opportunity is given to the borrower of sixty days to repay the debt. Section 13(3-A) was inserted by amending Act 30 of 2004 after the judgment of this Court in Mardia Chemicals whereby the borrower is permitted to make representation/ objection to the secured creditor against classification of his account as NPA. He can also objecf to the 1 (2008) 1 SCC 125 amount due if so advised. Under Section 13(3-A), if the bank/FI comes to the conclusion that such objection is not acceptable, it shall communicate within one week the reasons for non-acceptance of the representation/objection. 25- Reading the scheme of Section 13(2) with Section 13(4), it is clear that the notice under Section 13(2) is not a mere show-cause notice and it constitutes an action taken by the bank/FI for the purposes of the NPAAct." 5) The same issue asto whether a writ petition is maintainable against a notice under Section 13 (2) of the SARFAESI Act came into consideration before this Court in M/s Dauji Farms Limited & Others vs. Dena Bank & Another2. This Court after having considered all the aspects ofthe said matter observed as under: "15) The above stated ratio was referred with approval by the Supreme Court in the matter of Shin- Etsu Chemical Co. Ltd. vs. Aksh Optifibre Ltd. and another3. 16) Thus, the provisions of Section 69 of the TPA are specifically excluded and will have no application for enforcement of security interest under Section 13 of the SARFAESI Act. Even otherwise, the SARFAESI Act is a special Act as held by the Hon'ble Supreme Couri: in the matter of M/s Transcore vs. Union of India & Anr.4. Para 48 of the said decision reads as under: "48. We have already analysed the scheme of both the Acts. Basically, the NPA Act is enacted to enforce the interest in the financial assets which belongs to the bank/FI by virtue of the contract between the parties or by operation of common law principles or by law. The very object of Section 13 of NPA Act is recovery by non-adjudicatory process. A secured asset under the NPA Act is an asset in which interest is created by the borrower in favour of the bank/FI and on that basis alone the NPA 2 WP (C) No. 5928 of 2006 (decided on 5-11-2008) 3 (2005) 7 SCC 234 4 2006(12) SCALE Act seeks to enforce the security interest by non-adjudicatory process. Essentially, the NPA Act deals with the rights of the secured creditor. The NPA Act proceeds on the basis that the debtor has failed not only to repay the debt, but he has also failed to maintain the level of margin and to maintain value of the security at a level is the other obligation of the debtor. It is this other obligation which invites applicability of NPAAct.It is for this reason, that Sections 13(1) and 13(2) ofthe NPA Act proceeds on the basis that security interest in the bank/FI needs to be enforced expeditiously without the intervention of the court/tribunal; that liability of the borrower has accrued and on account of default in repayment, the account of the borrower in the books of the bank has become non-performing. For the above reasons, NPA Act states that the enforcement could take place by non-adjudicatory process and that the said Act removes all fetters under the above circumstances on the rights of the secured creditor." 17) The operation of the general Act may be curtailed by a later Special Act. In tenth edition of Principles of Statutory Interpretation by celebrated author Justice G.P. Singh, former Chief Justice, it is observed as under: "A general Act's operation may be curtailed by a later Special Act even if the general Act contains a non-obstante clause. The curtailment of the general Act will be more readilyinferred when the later Special Act also contains an ovemding non-obstante provision." (See Allahabad Bank vs. Canara Bank and another5). 18) Thus, the contention of learned counsel for the petitioners is rejected as the SARFAESI Act is later a Special Act having non obstante clause excluding applicability of provisions of Sections 69 & 69A of the TPA." (2000) 4 SCC 406 ^"s>. 6) Applying the well settled principles of law and for the reasons mentioned hereinabove, this petition is premature. Therefore, at this stage, this petition cannot be entertained, as the petitioners have already filed their reply to thenotice under Section 13 (2) of the SARFAESI Act and decision on the notice as well as the reply filed by the petitioners is still awaited, as according to the petitioners no order under Section 13 (4) of the SARFAESI Act has been passed till date. There is a provision of statutory appeal under Section 17 of the SARFAESI Act against the order passed under Section 13 (4) ofthe SARFAESI Act. 7) In the result, the petition is liable to be and is accordingly dismissed. Consequently, all the pending applications stand disposed of. Gowri Sd/- Satish K. Agnihotri Judge