1 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE NAGPUR BENCH, NAGPUR WRIT PETITION No. 1125/2008 (Shri Radhe Industries Ltd. Vs. The Punjab National Bank & ors.) Appeal District : Application No. of 200 Writ petition Office Notes, Office Memoranda of Coram, appearances, Court's orders or directions Court's or Judge's orders and Registrar's orders. CORAM : D.D. SINHA & SMT. VASANTI A. NAIK, JJ. DATED : APRIL 28, 2008. Heard Mr. Chandurkar, Senior Counsel for the petitioner, and Mr. Chhabra for the respondents. The petition is directed against the action taken by the respondent-Bank under the provisions of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Act of 2002). The following facts are not in dispute. The respondent-Bank has issued notice under Section 13(2) of the Act of 2002, dated 22/12/2007 for the recovery of unpaid amount of Rs. 46,74,27,942/-. The petitioner sent reply to the said notice 2 vide communication dated 16/2/2008. The respondent Bank considered the said communication and informed the petitioner by reply dated 23/2/2008 which reads thus: “We are in receipt of your letter dated 16/2/2008. The contents of the same have been examined and in reply, thereto we state as under: At the outset and without prejudice to the action initiated by the Bank under SARFAESI Act, we deny the allegations made by you against the Bank. As you are aware that the term loan was sanctioned to you on the various conditions, interalia, that the term loan shall be released in proportion to promoter's contribution brought in. We wish to make it very clear that the project has failed mainly because of the failure on the part of the promoters to bring their share of contribution as envisaged and the Bank has time and again, impressed upon you to bridge the shortfall. However, the management has utterly failed in this crucial aspect, which has resulted in the account slipping to NPA category. As mentioned above, the bank has already given you sufficient time to bring in your promised share and regularize the account. Since you have failed to regularize the 3 account, bank has been left with no option other than to proceed further with the action already initiated under SARFAESI Act for recovery of the dues.” In the backdrop of the above referred fact, since the petitioner failed to discharge its liability, the respondent-Bank has taken further steps under the Act of 2002 and has also taken symbolic possession of the Industrial Unit of the petitioner. Mr. Chandurkar, the learned Senior Counsel, submitted that the petitioner once again forwarded another representation dated 28/2/2008 to the respondent-Bank, however, the said representation has not been considered by the respondent-Bank and, therefore, further steps taken by the respondent-Bank are not sustainable in law and in conformity with the provisions of Section 13(3-A) of the Act of 2002 and, therefore, cannot be sustained in the eye of law. Mr. Chhabra, the learned counsel for the respondent-Bank, submitted that having rejected the representation of the petitioner dated 4 16/2/2008 which was made pursuant to the notice under Section 13(2) of the Act of 2002 issued by the respondent-Bank on 22/12/2007, the respondent-Bank has followed the procedure contemplated under Section 13(3-A) of the Act of 2002. Since the reply/explanation submitted by the petitioner was not accepted by the respondent-Bank, the Bank had communicated its rejection to the petitioner vide communication dated 23/2/2008 and since the liability has not been discharged, the Bank has proceeded further in accordance with the provisions of Section 13(4) of the Act. Considered the rival contentions. Apart from the facts referred to herein above, when the matter was listed before this Court on earlier occasions, we asked Mr. Chandurkar, the learned Senior Counsel, as to whether the petitioner is ready and willing to discharge the entire liability of Rs. 46,74,27,942/- at one go within a period of two weeks or so since the proceedings, by issuing notice under Section 13(2) of the Act of 2002, were initiated by the Bank in the year 2007. 5 However, till this date, in spite of the fact that the petitioner had been granted sufficient time to collect the amount and discharge the liability, the petitioner could not discharge the liability. So far as the procedure contemplated under Section 13(2), (3-A) and (4) of the Act of 2002 is concerned, it is difficult for us to agree with the contention canvassed by the learned Senior Counsel that the procedure adopted by the Bank was inconsistent with law. In that view of the matter, no case is made out for showing indulgence. Mr. Chandurkar, the learned Senior Counsel, has submitted that the petitioner-Company has entered into a Memorandum of Understanding with the third party who is ready and willing to discharge the liability of the petitioner. It is further contended that the said Memorandum of Understanding has been entered into and signed in presence of the officials of the respondent-Bank and, therefore, appropriate directions to the Bank be given in this regard. Mr. Chhabra, the learned 6 counsel for the respondent-Bank, submitted that the respondent-Bank was not a party to the said Memorandum of Understanding. It is also contended that the understanding arrived at between the petitioner and the third party is not acceptable to the respondent-Bank. It is submitted that the Bank is interested in recovering the huge amount which is outstanding for a considerable period of time. So far as this aspect is concerned, it is always open for the petitioner to enter into any kind of understanding with anybody, however, same cannot be said to be binding on the respondent-Bank. The Bank being the secured creditor, is interested in recovering its loan advanced to the customer and since the Bank is not ready to accept this offer of the petitioner, it is difficult for this Court to issue any direction in this regard, particularly because, the Bank has brought to the notice of this Court that the petitioner avoided to refund the amount since 2007, in spite of the fact that the bank has granted sufficient time to the petitioner for refund of the amount. 7 The petitioner has filed a pursis on record dated 28/4/2008 wherein once again it is submitted that the petitioner- Company is willing to clear the dues to the extent of Rs. 5 crores within 90 days and regularise the entire account within a period of 180 days thereafter. The counsel for the respondent- Bank has submitted that the said offer is not acceptable to the Bank, and contended that unless the petitioner is ready and willing to discharge the liability, the Bank is unable to give any kind of consent to its offer. Once again we want to express that it is between the petitioner and the Bank to consider the issue in the backdrop of the above referred facts. It appears that the Bank has given sufficient time to the petitioner. Similarly, the procedure adopted by the Bank is consistent with the provisions of Section 13 of the Act of 2002 and, therefore, no case is made out for showing any indulgence. Mr. Chandurkar, the learned Senior Counsel, at this stage contended that present order may be kept in abeyance 8 for a period of four weeks. Mr. Chhabra, the learned counsel for the respondent-Bank, has submitted that sufficient time is given to the petitioner, however, the petitioner failed to discharge the liability and, therefore, he requested not to accept the request made on behalf of the petitioner. We have already observed herein above that the proceedings under Section 13(2) of the Act of 2002, were initiated way back in the year 2007. The petitioner had ample time to discharge the liability. However, since the petitioner failed to do so and the procedure adopted by the respondent-Bank is in accordance with the Act of 2002, in our view, there is no reason to keep the impugned order in abeyance. The writ petition suffers from lack of merits. Same is dismissed. Interim order, if any, stands vacated. JUDGE JUDGE RMP