This writ petition challenging a notice under Section 13(2) of the SARFAESI Act 2002 was dismissed. The High Court held that, based on the Supreme Court decision in Mardia Chemicals, the notice does not create a cause for challenge, and the remedy lies under Section 13(3A) of the Act.
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IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 12.07.2017
CORAM:
THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MR.JUSTICE V.BHAVANI SUBBARAYAN
Writ Petition No.17014 of 2017
Akshayaa .... Petitioner
vs.
1. The Authorised Officer,
Indian Bank,
Assistant General Manager,
Anna Nagar Branch,
Chennai 600 040.
2. The Manager,
Indian Bank,
Anna Nagar Branch,
W-100 II Avenue,
Anna Nagar,
Chennai 600 040. .... Respondents
WRIT Petition filed under Article 226 of the Constitution of India, to issue a Writ of Mandamus, directing the first respondent to re-call the demand notice, dated 04.05.2017, issued under Section 13(2) of the SARFAESI Act, against the petitioner.
For Petitioner : Mr.M.Jaikumar
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ORDER
(Order of this Court was made by S.MANIKUMAR, J)
Notice under Section 13(2) of the SARFAESI Act, is challenged by
the writ petitioner-borrower, on the grounds, inter alia that the Bank
has not followed the guidelines of Reserve Bank of India, relating to
asset classification.
of India. Except the above, no other ground is urged.
Heard the learned counsel appearing for the parties and perused
the materials available on record.
defaulted and the Bank, vide letter, dated 02.02.2017, has addressed Mrs.Lakshmi, Mr.Diwakar and Mr.T.P.Damodaran, Partners of M/s.Akshaya Supermarket, Chennai, classifying their account as NPA
and thereafter, notice, dated 04.05.2017, under Section 13(2) of the
http://www.judis.nic.in SARFAESI Act, 2002, has been issued, calling upon the partners to pay
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a sum of Rs.1,00,34,012/-, being the outstanding amount, within 60
days, from the said notice. Responding to the above, the borrower is stated to have sent a representation, dated 12.05.2017, under Section 13(3A) of the said Act, requesting for re-calling the notice. The said request has not been accepted and accordingly, a communication, dated 29.05.2017, has been issued to comply with the norms and regulations of SARFAESI Act, 2002 and after the due date, ie., 60 days of notice, the Bank would take possession of the property, under mortgage and proceed for sale. The bank is yet to take action, under Section 13(4) of the SARFAESI Act, 2002. At this juncture, the instant writ petition has been filed, with a prayer, to re-call the demand notice, dated 04.05.2017, issued under Section 13(2) of the SARFAESI Act.
of India reported in AIR 2004 SC 2371 : 2004(4) SCC 311 has held that notice under Section 13(2) would not give rise to a cause to challenge. However, as per Section 13(3A) of the SARFAESI Act, 2002, if, on receipt of the notice under sub-section (2), if the borrower makes any representation or raises any objection, the secured creditor
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S. MANIKUMAR, J. AND V.BHAVANI SUBBAROYAN, J.
skm
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 one week of
receipt of such representation or objection the reasons for nonacceptance of the representation or objection to the borrower: PROVIDED that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the
Debts Recovery Tribunal under Section 17 of the Act.
Petition is dismissed. Consequently, connected Miscellaneous Petition
is closed. No costs.
(S.M.K., J.) (V.B.S., J.) 12.07.2017
skm
W.P.No.17014 of 2017
2 issues framed by the court
Whether a writ petition seeking recall of a notice under Section 13(2) of the SARFAESI Act 2002 is maintainable when the borrower has already invoked Section 13(3A).
Whether the notice under Section 13(2) of the SARFAESI Act 2002 gives rise to a cause to challenge in a writ petition.
Colour shows how this judgement treated each authority
Mardia Chemicals v. Union of IndiaDistinguished¶28
AIR 2004 SC 2371 : 2004(4) SCC 311 · Who else cites this
4 provisions across 3 enactments
Akshayaa
The Authorised Officer, The Manager, The Manager, Indian Bank, Chennai
S. MANIKUMAR
V. BHAVANI SUBBARAYAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
