Allowed

Ms Grid India Power Cables Pvt. Ltd. v. Indian Bank (Allahabad Bank)

DRT20 Oct 2023SA/107/2022

Case brief

AI extract

What is this about?

In this secured creditors enforcement action petition, the Tribunal quashed the bank's SARFAESI proceedings invalidating the Section 13(2) notices on technical grounds, ruling that failure to bifurcate dues and lack of refusal by authorized officers rendered the actions unlawful.

What did the court decide?

The Special Application was allowed and all actions taken under the SARFAESI Act by the Respondent Bank were set aside.

Ms Grid India Power Cables Pvt. Ltd. versus Indian Bank… — Banking and Recovery | DRT (2023)

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Debts Recovery Tribunal-Il, Delhi

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sA NO. LO7 0F 2022

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M/S GRID rNDrA POWER CABLES PW.LTD. & oRs. vs. TNDTAN BANK (ERSTWHTLE ALLAHABAD BANK)

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Reserved on: 18.10.2023 Pronounced on: 20.10.2023

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Present: Shri Rajiv Kumar Garg, counsel for applicant.

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Shri Amit Dhall, counsel for applicant. Shri Sanjeev Kakra, Sr. Advocate along with Sh. Amit Kasera, counsel for respondent bank.

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This SA has been filed by the applicant against the respondent bank under Section 17(1) of the SARFEASI Act,2002 with the request that the action and measures initiated by the respondent bank be declared illegal and arbitrary and^quash the same. It has been further requested to hold that the declaration of the account as NPA on the three different dates i.e. 31.03.2019, 29.03.2020 and 27.11.2020 is bad in law and notice dated 01.06.2021 issued under Section 13 (2) of the SARFAESI Act, 2002 is bad in law and the Respondent Bank is bound to restructure the account of the applicants in terms of the^proposal submitted by the applicant.

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The brief facts of the application are that as^per application the applicant No.1 is a Private Limited Company and applicant No.2 and 3 are the Directors of applicant no.1. The respondent bank in consoftium with Bank of Maharashtra had granted the cash credit facility of Rs. 6.5 Crores and bank guarantee limit of Rs. 2.5 Crores and against the aforesaid loan, the

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respondent bank claims its pari passu charge with Bank of Maharashtra on the properties i.e. (i) Built up Ground Floor without roof rights built on property No.121 in Block No. A-2, measuring 126 sq. mtrs., Janakpuri, New Delhi owned by applicant No.2 (ii) Industrial building at Plot No.63, measuring 1012.50 sq. mtrs. in Sector-S, IMI Manesar, Gurgaon, Haryana owned by applicant No.1 (iii) Industrial land and building at Khasra No.3502, 3503, 3499, 3500, VPO Singan, Tehsil Haroli, District UNA, Himachal Pradesh owned by applicant no.1 and (iv) Industrial land and building at Khasra No.3459, VPO Singan, Tehsil Haroli, District UNA, Himachal Pradesh owned by applicant no.3. It is further submitted that due to slowdown in the market, the business of the applicant No.l suffered and the account of the applicant No.l with Bank of Maharashtra became NPA. However, the account with the respondent bank continued to be regular as the applicants were depositing the interest and other legitimate dues on the due dates. It has further been submitted that despite the account being regular, the applicants were shocked to receive a notice dated 17.05.2019 under Section 13(2) of the SARFAESI Act, 2002 from the respondent bank claiming to have declared the account of the applicants as NPA on 31.03.2019. The applicants immediately approached the respondent bank and apprised the fact that the account has been wrongly declared as NPA. The respondent bank thereafter sent an e-mail dated 18.04.2020 claiming to have declared the account of the applicants as NPA on 29.03.2020. The said NPA on 29.03.2020 was also in violation of the prudentiallgj5 of the RBI as the sc\

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interest had duly been serviced and the debit balance was within the sanctioned limit. In fact, at the asking of the respondent bank, the applicants have deposited a sum of Rs.66.50 lacs between the^period from 19.05.2020 to 04.07.2020 despite of Covid-l9 pandemic. Thereafter, the applicants had applied for enhancement and restructuring of the account vide letter dated 28.09.2020 but the respondent bank was not responding to the said request of the applicants. The respondent bank vide e-mail dated 03.10.2020 sought documents from the applicants for renewal/ restructuring of the credit facilities and the said fact alone establishes that the account was regular and in order, even on 03.10.2020. Vide letter dated 03.11.2020, the applicants have submitted the requisite documents to the respondent bank. The applicants vide letter dated 19.11.2020 again requested the respondent bank to expedite the restructuring proposal submitted by the applicants. The applicants vide letter dated 30.12.2020 also requested the respondent bank for Hand Holding of the account, specifically stating them that the applicants wish to avoid the account becoming NPA. The above Hand Holding proposal of the applicants was recommended by Branch to the Zonal Office of the Bank, with the recommendation for Holding On Operators. It is further submitted that instead of receiving any response from the respondent bank on the restructuring proposal and Holding On Operations, the applicants were shocked to receive a notice dated 01.06.2021 from the respondent bank under Section 13(2) of the SARFAESI Act claiming a sum of Rs. 10,19,70,651.14 and also claiming to have

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declared the account as NPA on 27.11.2020. On receipt of the aforesaid notice dated 01.06.2021, the applicants filed reply/ objections dated 27.07.2021 under Section 13(3A) of the SARFAESI Act categorically asserting therein that the three different dates of the account having been declared as NPA within a span of around one year, establishes that the declaration of the account as NPA is in violation of the prudential norms of RBI, despite recommendation Holding On Operations was not implemented, amount has been claimed therein even for the uninvoked Bank Guarantees and there is no breakup of the principal amount due and interest component, rate of interest being charged is in violation of the guidelines of the RBI and restructuring proposal has not been responded to by the bank. The respondent bank instead of giving reasons for rejecting the objections sent a rejoinder dated 04.08.2021 through an Advocate, neither rejecting the objections nor dealing with the same. Thereafter, the respondent bank proceeded to take the symbolic possession of the properties vide possession notice dated 16.09.2021.It is fufther submitted that on making personal visits to the respondents, the applicants were informed by the officials of the respondent bank that since the account involves consoftium lending and the account has been declared as NPA by the other consortium member Bank of Maharashtra and Bank of Maharashtra has also initiated proceedings against the applicants before the NCLT under the IBC, the respondent bank would restructure the account of the applicants only if the applicants settle the matter with Bank of Maharashtra by, -ar1!1thg at an OTS. w

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Accordingly, the applicants approached Bank of Maharashtra and submitted a settlement proposal and made an upfront payment of Rs.40 lacs to Bank of Maharashtra and agreed to pay a total sum of Rs.5 Crores to Bank of Maharashtra as OTS. Thereafter, the applicants approached the respondent bank and apprised it of the above said OTS and requested it to expedite the restructuring^proposal and to clariff its line of action, as the applicants would be raising funds for paying the OTS amount to Bank of Maharashtra, only if the account is restructured by the respondent bank. The officials of the respondent bank assured the applicants that the account would be restructured and the respondent bank would support the continuation of business of the applicants and called upon the applicants to raise funds to honour the OTS of Bank of Maharashtra. On the basis of the above said assurance, the applicants raised funds from the market and friends and have till date paid a sum of Rs. 2.30 Crores to Bank of Maharashtra. However, instead of honouring its assurance and commitment of restructuring the account, the respondent bank proceeded under Section 14 of the SARFAESI Act for taking the physical possession of the Manesar as well as Janakpuri property. The respondent bank has filed a petition under Section 14 of the Act before the District Magistrate, Gurgaon for taking the physical possession of the Manesar property and also approached the Ld.CMM, Delhi for appointment of a Receiver to take the physical possession of the Janakpuri property.The Hon'ble CMM Delhi vide order dated 05.03.2022hasap inted a Receiver for takin^g

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the physical^possession of the Janakpuri^property. The Court Receiver has issued a notice dated 05.04.2022 to the applicants, for taking the^physical possession of the Janakpuri propefi on 28.04.2022. Therefore, the applicants have filed the^present SA being aggrieved by measures initiated by the respondent bank under the SARFAESI Act, 2002 against the^properties of the applicants and requested that the respondent bank may be restrained from proceeding fufther in respect of the properties in question and declared the action and measures initiated by the respondent bank under the SARFAESI Act in respect of subject properties as illegal and arbitrary and^quash the same.

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The respondent bank appeared and filed their objections on the application. The respondent vehemently denied the allegations of the applicant and submitted that the applicants had applied/ requested to respondent bank erstwhile Allahabad Bank for taking over the credit facilities being availed by the applicant company from Canara Bank with enhancements. The letter dated 09.06.2010 issued by the respondent bank in response to the application dated 05.05.2010 of the applicants which was duly acknowledged by applicant company by accepting its term & conditions stipulated therein for credit facilities. It is further submitted that after availing of the above said facility the applicants did not adhere to financial discipline and failed to deliver on their financial commitments. The account of the applicant company was reviewed and restructured on several occasions. Ultimately, the respondent bank issued Demand Notice dated _9n562A21 under Section 13 st

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(2) of SARFAESI Ac., 2002 through registered post calling upon the applicants to pay total amount of Rs.10,19,70,651.14 in Cash Credit Account as well as Bank Guarantee including interest as on 31.05.2021. However, despite the issuance of the above notice, the applicants have failed to pay the entire dues of the respondent bank. It is further submitted that the period on which the account turned as NPA was not the moratorium^period as claimed by the applicants in order to enjoy the implementation of extended COVID-19 Regulatory Package announced by the RBI. The objections raised in response to the notice under Section 13(2) by the applicants, were duly replied by the respondent bank vide rejoinder dated 04.08.2021. The applicants did not comply the terms of the said Demand Notice and thereafter respondent bank affixed notice under Section 13 (4) dated 16.09.202L for taking symbolic possession of the subject property and the said Possession Notice was duly^published in Hindi & English Newspapers. Thereafter the respondent bank moved an application under Section 14 of the SARFAESI Act 2002 before the Ld. CMM for appointment of Court Receiver for taking the possession of moftgaged property i.e. Built up Ground Floor, without Roof rights, Built on free hold property No. 121, in Block No.A-2, measuring 126 sq. meters situated at Janakpuri, New Delhi- 110058. The Ld. Court Receiver sent a possession notice to the applicants for taking the^possession on 28.04.2022.It is further submitted that the respondent bank was examining the proposal of the applicant but later came to know that the applicants have committed fraud by falsifoing and fabricated documents/records

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which were submitted to the respondent bank which clearly shows discrepancy in the balance sheet and other record of the applicant no.1 company maintained with the Ministry of Corporate Affairs received from the Registrar of Companies when compared from records^provided by the applicants to the respondent bank. It is denied that the applicants were regularly depositing the interest and other dues timely with the respondent bank. It is also denied that the respondent had ever assured and had made any commitment of restructuring the account. It is fufther submitted that as^per the account statement maintained by the respondent bank, the outstanding in Cash Credit facility account and Bank Guarantee Account is Rs.11,18,29,000/- as on 30.06.2022 including interest. It has been prayed that the SA of the applicants may be rejected.

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Both^parties have filed their evidence which are part of the present SA.

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Heard the Ld. Counsels of both the parties and the case was fixed for order on 18.10.2023. In the meantime Shri Amit Dhall, newly engaged Counsel of the applicant has filed an IA no.219912023 with the request that the applicant may be permitted to produce evidence on certain points and also permit the Ld. counsel to argue the case. The IA was heard and decided on 18.10.2023. By order dated 18.10.2023 the IA of the applicant was rejected but the applicant was permitted to file written submission upto 19.10.2023. The Ld. counsel of the applicant has filed the written argrme.nts.2l:ng with^judgements

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passed by the Hon'ble Supreme Couft and Hon'ble High Court. The Ld. counsel of the applicant has also filed document vide Dy. No. 502912023 dated 19.10.2023. The IA of the applicant for filing the evidence has already been rejected on 18.10.2023, therefore, the documents filed by the applicant by Dy.no. 502912023 cannot be taken into account. Therefore, these documents are not being considered by this Tribunal.

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From the perusal of the^pleadings submitted by the respective^pafties and the arguments it is evident that the Ld. counsel of the applicant has submitted that in the demand notice issued under Section 13(2) of the SARFAESI Act the rate of interest has not been mentioned, therefore, the demand notice is in contravention of Section 13(3) of the SARFAESI Act and is against the mandate issued by the Hon'ble Gujrat High Court in "PNB Vs. Mithlanchal Industries & Ors." . It is also submitted that the bank^guarantee amounting to Rs.3,84,439/- is still in continuing and the same has not been invoked till date and as such the demand raised by the respondent bank including the measures initiated by the respondent bank has been in contravention to the provisions of the SARFAESI Act. On the other hand, the Ld. counsel of the respondent has submitted that the amount as mentioned in the notice under Section 13(2) is due and^payable by the applicant and the same has been mentioned in the notice under Section 13(2). Therefore, there is no illegality in the demand notice. In this regard, I have gone through the notice issued under Section 13(2) dated 0ry62021. From^perusal sd

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of the notice it is clear that in the notice at^page no.1 the account no., sanctioned limit and outstanding with uptodate interest as on 31.05.2021 plus future interest, cost, charge and expenses etc. has been mentioned. From perusal of the notice it is clear that in the notice the rate of interest has not been mentioned. It is also not mentioned as to what is the principle amount and what is the interest component. It is also not mentioned as what are the costs and what are the charges and expenses. No bifurcation of the interest, penal interest, charges and other expenses has been mentioned in the notice issued under Section 13(2). This is a composite amount which includes outstanding amount, interest uptodate and future interest, cost, charges and expenses. From perusal of this notice it is clear that there is no Annexure of the notice in which the same might has been mentioned. Therefore, it is clear that in the notice issued under Section 13(2) there is no mentioning of detail of the amount to be recovered from the applicant. In the "PNB Vs. Mithilanchal" the Hon'ble Gujrat High Court has specifically held that the Secured Creditor has to mention each and every detail of the amount to be recovered from the applicant.

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From the perusal of the record it is also clear that the respondent has issued a 13(2) notice on 17.05.2019 which is annexed by the applicant in his SA as Annexure-Al. From perusal of the said notice it is clear that in the above notice the date of NPA has been mentioned as 31.03.2019. At para no.4 of this notice it has been mentioned^*You have violated the

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terms of the sanction and also made the account irregular and as a consequence the account has become a non performing asset and has been classified by our bank as such on 31.03.2019 as per RBI guidelines". Therefore, it is clear that in the notice dated 17.05.2019 the date of NPA has been mentioned as 31.03.2019. The applicant has raised objections against this notice and sent the same to the respondent bank. The respondent bank in his reply through e.mail which has been annexed as Annexure A-2 of the SA has mentioned the date of NPA as 29.03.2020. It has been mentioned in the reply that "It is obserued with the concern that you are not making transactions in your loan accounts with our branch for long and accounts have turned NPA w.e.f. 29.03.2020." Therefore, in the notice under Section 13(2) dated 17.05.2019 the date of NPA has been mentioned as 31.03.2019 but in the reply dated 18.04.2020, the date of NPA has been mentioned as 29.03.2020. The respondent bank has not clarified the same as to why the date of NPA has been changed. It has not been communicated that in the notice issued under Section 13(2) on 17.05.2019 the date of NPA has been wrongly mentioned due to typographical mistake. How the date of NPA has changed has not been explained by the respondent bank. From^perusal of the file it is also clear that the respondent bank has mentioned in the reply at para no. 5.5-5.9 that "It is submitted that respondent bank had always acted in terms of the banking norms and the account of the applicant turned into NPA category on 31.03.2019 and 29.03.2020 and the same was made regular upon pa of the outstanding

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interest and paft dues by the applicant". From the reply it is clear that the respondent bank wants to say that the account of the applicant become standard after becoming NPA on 31.03.2019 and 29.03.2020. But the respondent has not filed any such evidence that the account was declared on 31.03.2019 and become standard on such and such date. The respondent bank also not submitted any evidence that the account again became NPA on 29.03.2020 and became sLandard on such and such date. From the perusal of the e.mail Annexure A-2 it is clear that the respondent bank in this mail has not mentioned that the account which had became NPA on 31.03.2019 has become standard and has again become NPA due to default on 29.03.2020. In this e.mail it has been written that "You are not making transaction in your loan accounts with our branch for long and the accounts have turned NPA w.e.f. 29.03.2020". Therefore, it is clear that the respondent is saying that the applicant is not paying the due amount for long times. Whereas in the reply it has been submitted that the account which has become NPA on 31.03.2019 had become standard and again became NPA on 29.03.2020. Therefore, within a period of one year the account became standard and again became NPA. Therefore, there was a duty on the respondent to prove the same. In the e.mail the respondent is saying that the applicant is not paying the amount since very long time. Therefore, the allegations of the respondent bank are contrary to each other and cannot be accepted. The respondent bank never claimed that the bank has withdrawn the notice dated 17.05.2019_due to_ certain reasons and

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issued a new notice under Section 13(2) on 01.06.2021. Without withdrawing the^previous notice issued under Section 13(2) on 17.05.20L9 the respondent has again issued a notice under Section 13(2) on 01.06.2021. This appears to be against the provisions of the SARFAESI Act. The respondent bank cannot be permitted to issue second 13(2) notice without withdrawing the first notice. From perusal of the notice dated 01.06.2021it is clear that in this notice the date of NPA has been mentioned as 27.71.2020. At para no.5 of the notice date 01.06.20211 it has been mentioned that "You have violated the terms of the sanction and also made the account irregular and as a consequence the account has become a non performing asset and has been classified by our bank, as such on 27.11.2020 as^per RBI guidelines." Therefore, from perusal of the entire record it is clear that the respondent bank has mentioned three dates on which the account has become NPA. The first date is 31.03.2019, the second date is 29.03.2020 and the third date is27.11.2020. The respondent bank has not clarified as to why these dates of the NPA has been changed. Therefore, it is clear that the action of the respondent bank is completely vague and therefore, the notice issued under Section 13(2) shall be deemed to be invalid and bad in law.

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The Ld. counsel of the applicant has also submitted that the applicant has moved an objection against the notice issued under Section 13(2) but the same has not been considered and rejected by the respondent bank and therefore, all the actions against

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the applicant is bad in law. On the other hand, the Ld. counsel of the respondent has submitted that the objection of the applicant against the notice issued under Section l3(2) has been replied by the respondent bank through its counsel vide rejoinder dated 04.08.2021. In this regard I have^gone through the objection raised by the applicant against the notice issued under Section 13(2) and the response of the bank against the objections. From^perusal of the objection of the applicant against the notice under Section 13(2) paper no.46, Annexure-ll it is clear that the applicant has claimed in the objection that the respondent bank is charging wrongful interest and several other debits/ amounts have not been adjusted. It has also been claimed that the respondent bank has issued the first notice dated 17.05.2019 in which the date of NPA has been mentioned as 31.03.2019 and has again claimed to have been classified as NPA on 17.17.2020 and in the e.mail dated 18.04.2020 it was claimed that the NPA has been declared on 29.03.2020. Therefore, it was submitted that within a span of one year an account cannot be declared NPA for three times which is against the guidelines of the RBL IT has also been mentioned in the objection that the respondent bank has not supplied the complete statement of account alongwith the notice and therefore, the same is in violation of the order passed by the Hon'ble Apex Court in "Central Bank of India Vs. Ravindra & Ors.". The objection has also been made that the bifurcation of the amount such as rate of interest, principle amount due, penal interest and other charges have not been mentioned in the noti under Section 13(2)

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and certain other points have also been taken. On this objections the respondent bank has issued the letter/rejoinder dated 04.08.2021 which has been annexed as Annexure-l2 paper no.12 with the SA. From perusal of the response it is clear that in the said response the respondent bank has mentioned the outstanding upto date interest as on 31.05.2021 plus future interest, cost, charge and expenses etc. in respect of the first and second account. But the respondent bank has not mentioned any reason as to why the same has not been mentioned in the notice under Section 13(2). In this response the respondent bank has not mentioned the cost, charges and other expenses separately. From the notice it is also clear that the respondent bank has not mentioned the reasons as to why three dates of NPA has been communicated by the respondent bank to the applicant. The applicant has specifically claimed that an account cannot be declared as NPA three times within a span of one year but the respondent bank has not made any submission regarding the same. From perusal of the above notice it is clear that the respondent bank has not rejected the objections of the applicant filed under Section 13(3A) of the SARFAESI Act. In the entire response there is not a single sentence where it might have been mentioned that the objection of the applicant is being rejected.

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In the final paragraph of the letter the respondent bank has written as follows:

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"By way of this rejoinder, you are requested to kindly advise your client finally to pay the above said amount due and outstanding against the loan account

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within a period of 15 days from the date of receipt of this rejoinder, otherwise my client shall be constrained to take appropriate legal action against you to recover the said amount and in this regard, your client's mortgaged property may be attached by my client bank and in that event your client shall be held responsible for all the costs, risks and consequences, which please note".

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From perusal of the above language it is clear that it is merely a rejoinder of the notice issued under Section 13(2) but it has not been either rejected or accepted by the respondent bank.

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From perusal of the above response it is also clear that this letter has been issued by Sh.Anil Kumar Singh, Advocate on behalf of the respondent bank who is claiming to be the Counsel of the respondent bank. In this light I have gone through the Section 13(3A) of the SARFAESI Act which runs as follows:-

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"If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate [within fifteen days] of receipt of such representation or objection the reasons for nonacceptance of the representation or objection to the borrower".

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L2. From^perusal of the above provision it is clear that the respondent bank has to either accept or reject the objections raised by the applicant along with the reasons for non-acceptance. But from the perusal of the reply of the bank it is clear that the respondent bank has not considered any of the objections raised by the applicant in the objection and has not decided the same giving reasons. Instead of that the respondent bank has only issued rejoinder which is not permissible under Section 13(3A) of the SARFAESI Act. More over, the objections must have been considered by the respondent bank or the Authorised Officer of the respondent bank and the same should be decided by the respondent bank or the Authorised Officer. But in the present case the objections have not been decided by the concerned officers of the bank but by the Advocate of the respondent bank. This is not permissible under the law. In "Mardia Chemical Ltd. Vs. Union of India & Ors." the Honble Supreme Court has specifically held that the objections raised by the borrower/guarantor against the notice under Section 13(2) must be decided by the bank through reasoned order. In this case the objection has neither been decided by the officers of the bank and nor the reasons for the rejection has been mentioned in the response. In the response even it has not been mentioned that the same are being rejected but only a rejoinder has been issued. Therefore, the above action of the respondent bank is against the provisions of the Act and guidelines issued by the Hontle Supreme Court. Therefore, all actions ry_ry the respondent bank gJ-

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on the basis of such notice is against the provisions of the law.

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The Ld. counsel of the applicant has submitted that the service of the notice under Section 13(4) is not as per mandate provided under the SARFAESI Act. It has been submitted that notice under Section 13(4) has not been affixed on the subject property and therefore, there is clear violation of Rule 8(1) of the SARFAESI Rules. On the other hand, the Ld. counsel of the respondent bank has submitted that the notice under Section 13(4) has been properly served on the applicant and there is complete adherence of the Rule 8(1) of the SARFAESI Rules. In this regard I have gone through the record. In the SA filed by the applicant the applicant at^para no.5.10 at page no.9 of the SA has submitted that "the respondent bank thereafter proceeded to take the symbolic possession of the properties vide its possession notice dated t6.09.2021. A copy of possession notice dated 16.09.2021 issued by the respondent bank is annexed herewith as Annexure A- 13". Again the applicant at page no. 13^para VI has submitted that "because the act of taking of the symbolic possession of the properties by the respondent bank is bad in law." From both the^paras it is clear that the applicant has never claimed that the notice under Section 13(4) has not been affixed on the subject^property and therefore, there is a clear violation of the Rule 8(1). As the applicant has not taken any such defense in the SA, the applicant cannot be^permitted to take this defense at the time this of argument. Therefore, argument of the SJ

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applicant cannot be taken into account and on this basis the^proceedings initiated under SARFAESI Act cannot be declared void.

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The Ld. counsel of the applicant has further submitted that the applicant has applied for different OTS but the same has not been accepted by the respondent bank without any reasonable ground, therefore, all the actions shall be deemed to be invalid. But this argument of the applicant has no force. If the applicant has applied for any OTS it is not duty of the respondent bank to accept the same. The OTS can be accepted only when both the^parties have agreed on the terms of the OTS. Merely because the respondent bank has rejected the OTS the SARFAESI action cannot be vitiated.

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The Ld. counsel of the applicant has further submitted that before declaring the account of the applicant as NPA no notice was^given to the applicant and being an MSME account, the respondent bank has not taken any step to rehabilitate the business of the applicant by restructuring the account. From perusal of the provisions of the SARFAESI Act there is no such requirement that a notice must be issued before declaring any account of MSME as NPA. The Government brings ceftain schemes for the^progress of the MSMEs from time to time and give relief to the MSME for a limited period. When the period of scheme completed the scheme become infructuous. Therefore, it cannot be claimed that the respondent bank has not^given the benefit of the scheme unless and until it is proved that the schqme is still in

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operation. The RBI issued guidelines in compliance of those schemes and these guidelines become infructuous as soon as the schemes come to an end. In the present case there is no evidence that at that particular time any particular scheme of the Government was effective. Therefore, the applicant cannot claim any benefit on any^guidelines issued by the RBI to^give effects to these schemes. Therefore, on this^ground the applicant cannot claim any benefit.

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On the basis of the above discussion it is clear that two notices under Section 13(2) has been issued and there is no evidence that the first l3(2)notice^has been withdrawn. It is also clear that there is no mention of principle amount, interest,^penal charges, cost and other expenses in the notice issued under Section 13(2) dated 01.06.2021. There is^no Annexure to the notice under Section 13(2) in which the bifurcation might have been recorded.^The objection under Section 13(3A) has been filed by^the applicant which has not been rejected by the Authorised Officer of the bank/ the competent authorities of the bank but it has been decided by the Advocate of the bank which is not^permissible under the SARFAESI Act. The reply given by the Advocate on behalf of the bank is not a rejection of the objection but it is a rejoinder which is not^permitted under the SARFAESI Act. Moreover, the objections raised by the applicant has not been considered and no reason has been^given for the rejection of the objections. Therefore, there is a clear violation of^the provisions of the SARFAESI Act and guidelines issued by the Honble Apex Coutt in s{Ma ia Chemical case.

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L7. On the basis of above discussion, the SA application of the applicant is liable to be allowed and all action taken under the SARFAESI Act is liable to be set aside.

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ORDER

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The present SA stands allowed and all action taken under the SARFAESI Act is set aside.

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Date : 20.10.2023

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Sd' /Dl\o '^{'' 2-'L} ' (susHrl KUMAR RASTOGT) PRESIDING OFFICER DRT-II, Delhi

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This judgement has been signed, dated and pronounced in open court.

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Date : 20.10.2023