IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE FOURTH DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO : 7599 of 2008 Between: M/s.Pharmaiads Pharmaceuticals Limited, rep.by its Managing Director, Admn.office at 4-4-211/212/11-13 Inderbagh, Sultan Bazar, Hyderabad ..... PETITIONER AND Central Bank of India., rep.by its Chief Manager Gudimalkapuram Branch, Hyderabad .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to isue a writ or order direction more especially one in the nature of writ of mandamus declaring that section 13 of SERFEASI Act does not provide for issuance of multiple notice under section 13(2) and consequentially set aside the second impugned Notice dated nil issued by the respondent bank as without jurisdiction and pass Counsel for the Petitioner: MR.MINNIKANTI LAXMIPRASAD Counsel for the Respondent No.: MR.CH.SIVA REDDY The Court made the following : O R D E R: 1. The petitioner is a company incorporated in the year 1989 under the Companies Act. The petitioner-company enjoyed certain credit facilities from the year 1999. When the loan account of the petitioner- company went out of order, the respondent-Central Bank of India initiated proceedings and issued notice on 1.8.2005 as provided under section 13(2) of SERFAESI Act, 2002 demanding the petitioner to pay the amount due. The petitioner challenged the said notice by filing W.P.No.21610 of 2005, which came to be dismissed on 29.1.2008. The relevant portion of the order passed in the writ petition reads as under: “ 21. On a careful reading of different provisions of the Act and also the guidelines which had been specified above, it may be that the circulars and the guidelines issued by the Reserve Bank of India may be for internal guidance in between the Banking Institutions and the Reserve Bank of India, but however, the Banking Institutions are expected to observe those guidelines. In the present case, when the ingredients to be satisfied as specified by Section 2(o) of the Act read along with guidelines, if to be carefully analysed, inasmuch as some discretion is conferred on the banking institution while taking a decision relating to whether a particular asset is a non performing asset or not, this Court is of the considered opinion that the power of judicial review to be sparingly exercised in such matters. Hence, this Court is not inclined to interfere and accordingly the Writ Petition is bound to fail and the same shall stand dismissed. It is needless to say that the petitioner is at liberty to pursue his other legal remedies, if any available. No costs.” 2. The respondent-Bank issued fresh notice under section 13(2) of SERFAESI Act, 2002 on 3.3.2008. the said notice is under challenge in this writ petition. 3. The respondent-bank filed counter affidavit. It is stated in the counter affidavit that fresh notice under section 13(2) of SERFAESI Act, 2002 is issued only with an intention to provide the petitioner one more opportunity indicating the balance due to the bank. Para 4 of the counter affidavit needs to be noted and it is thus: “ 4. With regard to para 6 of the affidavit, I submit that with an intention to give one more opportunity the Bank has again sent the notice under section 13(2) of SERFAESI Act, 2002 dated 3.3.2008 of the SARFAESI Act demanding the petitioner to pay an amount of Rs.1,01,39,726/- as on 31.1.2008. The notice issued again under section 13(2) of SERFAESI Act, 2002 is only with intention to provide one more opportunity to the petitioner and indicating the latest balance due to the bank. Giving one more notice under section 13(2) of SERFAESI Act, 2002 is not barred by law. However, as per SARFAESI Act, if the notice is issued under section 13(2), there is remedy available to the petitioner to make a representation/reply to the said notice. Further, if any measures are taken by the bank under section 13(4) of the Securitisation Act, the petitioner has remedy under the SARFAESI Act to approach the Debts Recovery Tribunal u/s 17 of the SARFAESI Act. The petitioner is neither interested to repay the amount nor follow the procedure prescribed under law. But with intention to delay and to avoid the repayment of the amount due to the bank the petitioner filed this writ petition again. The petitioner has no remedy until the bank takes measures u/s 13(4) except giving the representation/reply u/s 13(3A).” 4. When this writ petition came up for admission, with the consent of both the parties, the same is taken up for final disposal. 5. Heard learned counsel appearing for the petitioner and learned Standing Counsel appearing on behalf of the respondent-Bank. 6. Learned counsel appearing for the petitioner submits that the respondent-Bank having issued notice under section 13(2) of SERFAESI Act, 2002 on 1.8.2005 cannot issue fresh notice under the said provision. In a way he submits that multiple notices under section 13(2) of SERFAESI Act, 2002 are not contemplated and therefore notice impugned in this writ petition being a second one is liable to be set aside. He also refers to Rule 4 of SERFAESI Act, 2002 with regard to the procedure after issue of notice. 7. Learned Standing Counsel appearing for the respondent-Bank submits that second notice under section 13(2) of SERFAESI Act, 2002 came to be issued after disposal of the writ petition filed by the petitioner-company so as to give him one more opportunity to liquidate the liability before passing orders under section 13(4) of SERFAESI Act, 2002. 8. The only question that calls for adjudication in this writ petition is whether the second notice issued by the respondent-Bank is in accordance with the provisions of 13(2) of SERFAESI Act, 2002. 9. Indisputably the petitioner-company assailed the notice dated 1.8.2005 issued under section 13(2) of SERFAESI Act, 2002 by filing the writ petition being W.P.No.21610 of 2005, came to be dismissed on 29.1.2008. Thereafter, the respondent-Bank issued fresh notice under section 13(2) of SERFAESI Act, 2002. Section 13(2) of SERFAESI Act, 2002 reads as under: “ 13(2): Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section(4).” 10. It is apparent from the above referred clause that the petitioner- company gets 60 days time for submitting any representation which is required to be considered under Section 13(3A) of SERFAESI Act, 2002. Issuance of the notice impugned in this writ petition after disposal of the earlier round of litigation is in no way causes any prejudice to the petitioner. In other words it is for the benefit of the petitioner-company so as to enable him to make a representation. In that view of the matter, the notice impugned in this writ petition cannot be said to be in contravention of section 13(2) of SERFAESI Act, 2002. 11. Accordingly, this writ petition is devoid of merits and the same is dismissed. No costs. 4th July, 2008. (B.Seshasayana Reddy,J) tnb ASSISTANT REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{TRK} THE HONOURABLE SRI JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO.7599 OF 2008 4TH JULY 2008.