Disposed

Muslim Ali v. the Bank of Baroda and Anr.

Gauhati HC17 Aug 2022WP(C)/3894/2022

Case brief

AI extract

What is this about?

The petitioner challenged a SARFAESI notice via a writ petition, alleging procedural flaws regarding the rejection of his representation. The Court refrained from adjudicating disputed facts and directed the bank to consider another detailed representation within two months before proceeding.

What did the court decide?

Petition disposed of; bank directed to consider a further representation under Section 13(3A) of SARFAESI Act within two months.

Muslim Ali Vs the Bank of Baroda and Anr. — Banking and Recovery | Gauhati HC (2022)

¶1

Page No.# 1/5

¶2

GAHC010113982022

¶3

THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

¶4

Case No. : WP(C)/3894/2022

¶5

MUSLIM ALI S/O- MAKBUL ALI HOUSE NO.43, WARD NO. 59 DAKHINGAON, KAHILIPARA, DIST- KAMRUP (M), GUWAHATI-37, ASSAM

¶6

VERSUS

¶7

THE BANK OF BARODA AND ANR

¶8

REP. BY THE CHIEF MANAGER , GUWAHATI BRANCH (MAIN), B.R KALITA COMPLEX, FANCY BAZAR, M.S ROAD, GUWAHATI-781001

¶9

2:THE CHIEF MANAGER/ BRANCH MANAGER BANK OF BARODA GUWAHATI BRANCH (MAIN) B.R KALITA COMPLEX FANCY BAZAR M.S ROAD

¶10

GUWAHATI-78100

¶11

Advocate for the Petitioner : MR. K N CHOUDHURY

¶12

Advocate for the Respondent :

¶13

Page No.# 2/5

¶14

BEFORE HONOURABLE THE CHIEF JUSTICE HONOURABLE MR. JUSTICE SOUMITRA SAIKIA

¶15

ORDER

¶16

Date : 17.08.2022

¶17

(R.M. Chhaya, CJ.)

¶18

Heard Mr. K.N. Choudhury, learned senior counsel, assisted by Mr. R.J. Das, learned counsel for the petitioner. Also heard Mr. M. Sharma, learned counsel, appearing for both the respondents.

¶19

By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs:-

¶20

“In the premises aforesaid, it is therefore prayed that Your Lordships may be pleased to admit this petition, call for the records and issue Rule calling upon the Respondents to show cause as to why the reliefs as prayed for ought not to be granted and on such cause or causes being shown, upon hearing the parties, and on perusal of records, may be pleased to grant the following relief(s):

¶21

I. A Writ in the nature of Mandamus be issued Quashing the Notice dated 2.5.2022 in respect of the Borrower, and also directing the respondent No.1 and 2 to recall/rescind and/or forbear from giving effect to the said impugned Notices, and any other subsequent or consequential decisions taken thereupon.

¶22

AND/OR

¶23

II. Pass such further or other order(s), as Your Lordships may deem fit and proper in the interest of justice and to grant complete relief to the petitioners.

¶24

AND/OR

¶25

In the interim, the respondent authorities may be restrained from proceeding further on the Notice dated 2.5.2022 with regard to the matter of payment of outstanding loan/overdue in respect of the petitioner’s Cash Credit A/C No.00010500000057.”

¶26

This Court by an order dated 15.06.2022 passed the following order:-

¶27

Page No.# 3/5

¶28

“Heard Mr. K. N. Choudhury, learned Senior Counsel, appearing for the writ petitioner. Also heard Mr. M. Sarma, learned counsel appearing for the respondent bank.

¶29

The petitioner was sanctioned various credit facilities by the respondent bank in the year 2013. Pursuant to such sanction of credit facilities, the petitioner availed cash credit facilities from the respondent bank from time to time. However, since the petitioner defaulted in payment of the interest accrued on the amounts of cash credit availed by him, the cash credit account of the petitioner was declared as Nonperforming Asset (NPA) and the respondent bank issued a notice dated 02.05.2022 to the petitioner under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002. The petitioner submitted a representation dated 13.05.2022 to the respondent bank under section 13(3A) of the SARFAESI Act for reviewing the decision to classify the petitioner’s loan account as NPA and also to withdraw the notice dated 02.05.2022. Thereafter, the respondent bank made a publication of the aforesaid notice in ‘The Time of India’ dated 03.06.2022.

¶30

It is submitted by Mr. K. N. Choudhury, learned counsel for the petitioner that under the provisions of the SARFAESI Act, the representation under section 13(3A) of the SARFAESI Act, submitted by the petitioner as the debtor is to be considered and responded to by the creditor within a period of fifteen days and, in case of rejection of such petition, the reasons for non-acceptance have to be intimated to the petitioner. In the present case, however, the same has not been done and the respondent bank proceeded to publish the notice in the newspaper. Learned Senior counsel for the petitioner submits that since sub-section (3A) of section 13 of the SARFAESI Act has been breached, the procedure adopted by the respondent bank is vitiated.

¶31

On the other hand, Mr. M. Sarma, learned counsel appearing for the respondent bank submits that representation submitted by the petitioner was considered by the respondent bank and necessary response was also given within time.

¶32

If that is so, let the respondent bank file affidavit within one week so that the matter can be considered on the next date fixed.

¶33

Accordingly, let the matter be listed again on 24.06.2022.

¶34

Till the next date fixed, no coercive action shall be taken against the petitioner by the respondent bank.”

¶35

It is also a matter of fact that affidavit-in-opposition has been filed by the respondent Bank and further affidavits are filed by the petitioner.

¶36

The fact, however, which can be culled out from the record of this petition

¶37

Page No.# 4/5

¶38

is that the petitioner was sanctioned various cash credit facilities by the respondent Bank since the year 2013. The root cause of this petition is a notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) dated 02.05.2022. It is predominantly contended in this petition and the same has been reiterated by Mr. K.N. Choudhury, learned senior counsel for the petitioner that though a detailed representation was filed, as provided under Section 13(3A) of the SARFAESI Act, the Bank has not considered the same. It is one of the limb of the argument put forward by Mr. K.N. Choudhury, learned senior counsel for the petitioner that as per the provisions of the SARFAESI Act, the petitioner is not a defaulter, i.e. to say that the assets of the petitioner cannot be termed as Non-Performing Assets (NPA).

¶39

In peculiar facts and circumstances of this case instead of exercising extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India, which may entail disputed questions of facts that are raised in this petition, including the question whether the Bank has rightly declared the account of the petitioner as NPA or not, it would be appropriate to relegate the petitioner to file a further detailed representation, as provided under Section 13(3A) of the SARFAESI Act and the same shall be considered by the respondent Bank, as provided under Section 13(3A), keeping in mind the proviso of the said provision and pass a reasoned order within a period of 2(two) months from the date of receipt of a certified copy of this order and the same may be communicated to the petitioner. It goes without saying that the notice under Section 13(2) dated 02.05.2022 shall remain as it is and only after considering the representation that may be filed by the petitioner as per this order, if any further proceedings are necessary as contemplated under the

¶40

Page No.# 5/5

¶41

SARFAESI Act, shall be taken by the respondent Bank.

¶42

With the above observations, the writ petition stands disposed of. The interim relief stands vacated.

¶43

JUDGE CHIEF JUSTICE

¶44

Comparing Assistant

Muslim Ali v. the Bank of Baroda and Anr.

Case brief

What is this about?

What did the court decide?

Muslim Ali v. the Bank of Baroda and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Rishab Phukan Vs Mr. Putula Begum and 7 Ors.

Center for Environment Protection (Cep) Vs the State of Mizoram and Ors.

Katinath Narzary Vs Madhu Agarwala and Anr.

Sri Joyram Das and Anr. Vs Sri Nabajyoti Nath and Anr.

Pankaj Kumar Deka Vs the Reserve Bank of India and Anr.

Taj Uddin Ahmed Vs the State of Assam and 7 Ors.