Disposed

M/S Katyal Industries and Another v. Canara Bank

Allahabad HC5 Feb 2021WRIC/3817/2021

Case brief

AI extract

What is this about?

This writ petition challenging a SARFAESI notice under Section 13(2) was disposed of without entertaining the objection to the notice since a separate objection was already filed. The court directed the bank to decide the pending representation expeditiously.

What did the court decide?

The writ petition was disposed of; the bank is directed to decide the pending representation expeditiously.

M/S Katyal Industries and Another Vs Canara Bank — Banking and Recovery | Allahabad HC (2021)

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Court No. - 39

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Case :- WRIT - C No. - 3817 of 2021

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Petitioner :- M/S Katyal Industries And Another Respondent :- Canara Bank Counsel for Petitioner :- Srestha Pandey,Ashok Pandey Counsel for Respondent :- Krishna Mohan Asthana

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Hon'ble Naheed Ara Moonis,J. Hon'ble Dinesh Pathak,J.

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Heard learned counsel for the petitioners, Sri K.M. Asthana, learned counsel appearing on behalf of respondent.

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This writ petition has been filed seeking following reliefs:-

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"(i) Issue a writ, order or direction in the nature of Certiorari calling for the records of the case and quash the impugned notice dated 28.09.2020 issued to the petitioner no. 1, contained as Annexure-5 to the writ petition.

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(ii) Issue a writ, order or direction in the nature of Mandamus directing the respondents to treat the account of the petitioner as standard and permit the petitioner to operate the same.

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(iii) Issue a writ, order or direction in the nature of Mandamus directing the respondent to decide the representation of the petitioner dated 13.01.2021 in accordance with law, contained as Annexure-7 to the writ petition."

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Learned counsel for the respondent submits that the petitioners have taken a loan from the respondent-bank and could not deposit the said amount, hence the petitioners' account was declared as NPA on 5.9.2019. Thereafter, the bank has issued a notice dated 28.9.2020 against the petitioners U/s 13 (2) of the SARFAESI Act which has been challenged by the petitioners through an objection U/s 13 (3A) of the Act. Hence, the present petition is against the settled principles of law to grant any relief.

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The Hon'ble Supreme Court in the case of ICICI Bank Ltd. v. Umakanta Mohapatra, Civil Appeal Nos. 1024310250 of 2018, decided on 05.10.2018, has held as under:

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"Delay condoned.

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Leave granted.

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Despite several judgments of this Court, including a judgment by

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Hon'ble Mr. Justice Navin Sinha, as recently as on 30.01.2018, in Authorized Officer, State Bank of Travancore and Another VS Mathew KC., (2018) 3 SCC 85, the High Courts continue to entertain matters which arise under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), and keep granting interim orders in favour of persons who are Non-Performing Assets (NPAs).

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The writ petition itself was not maintainable, as a result of which, in view of our recent judgment, which has followed earlier judgments of this Court, held as follows:-

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18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. Vs Prem Heavy Engineering Works (P) Ltd and another, (1997) 6 SCC 450, observing:-

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32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."

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The writ petition, in this case, being not maintainable, obviously, all orders passed must perish, including the impugned order, which is set aside.

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The appeals are allowed in the aforesaid terms.

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Pending applications, if any, shall stand disposed of."

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Recently the Hon'ble Apex Court in the case of C. Bright Vs. The District Collector & others, Civil Appeal No. 3441 of 2020 decided on 05.11.2020 has observed as follows:

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"21. Even though, this Court in United Bank of India v. Satyawati Tondon & Ors., (2010) 8 SCC 110 held that in cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which will ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Hindon Forge Private Limited has held that the remedy of an aggrieved person by a secured creditor under the Act is by way of an application before the Debts Recovery Tribunal, how- ever, borrowers and other aggrieved persons are invoking the jurisdiction of the High Court under Articles 226 or 227 of the Constitution of India without availing the alternative statutory remedy. The Hon'ble High Courts are well aware of the limitations in exercising their

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jurisdiction when effective alternative remedies are available, but a word of caution would be still necessary for the High Courts that interim orders should generally not be passed without hearing the secured creditor as interim orders defeat the very purpose of expeditious recovery of public money.

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22. Thus, we do not find any error in the order passed by the High Court. Consequently, the appeal is dismissed."

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The learned counsel for the petitioner has confined his prayer to direct the respondent-bank to decide the representation dated 13.01.2021, pending for consideration vide Annexure 7 to the writ petition filed in reply to the notice issued by the bank U/s 13 (2) of SARFAESI Act.

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Considering the submission advanced by the learned counsel for the petitioners. We are not inclined to entertain the petition as the petitioners have already filed objection against issuance of notice U/s 13 (2) of the SARFAESI Act. the representation of the petitioners dated 13.1.2021 be considered and decided by the respondentbank, if the same has not been finally decided, expeditiously on its own merit.

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The writ petition is disposed of.

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Order Date :- 5.2.2021 Saurabh

M/S Katyal Industries and Another v. Canara Bank

Case brief

What is this about?

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M/S Katyal Industries and Another v. Canara Bank

Case brief

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