M/S Shivachaya Sugarcane Bio Products ... vs Union Bank Of India on 31 March, 2023

 

M/S Shivachaya Sugarcane Bio Products ... vs Union Bank Of India on 31 March, 2023

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                                    WP No.100897 OF 2022




  IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

        DATED THIS THE 31st DAY OF MARCH, 2023

                        BEFORE
 THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM

       WRIT PETITION NO.100897 OF 2022 (GM-RES)

BETWEEN:

   M/S. SHIVACHAYA SUGARCANE BIO PRODUCTS PVT.
   LTD., HOUSING COLONY, MANTUR ROAD,
   MUDHOL, BAGALKOT DISTRICT-567313 KARNATAKA
   REP.BY ITS PARTNER MR. ANAND SHIVAJI
   SURYAVANSHI
                                          ...PETITIONER

(BY SRI.KIRAN KULKARNI, ADVOCATE)

AND:


   UNION BANK OF INDIA
   NAVNAGAR, BAGALKOT-587103
   KARNATAKA.
   REP. BY ITS CHIEF MANAGER
                                           ...RESPONDENT
(BY SRI.GIRISH HULMANI, ADVOCATE)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
 OF CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OR
ORDER OF APPROPRIATE NATURE TO SET-ASIDE REPSONDENT'S
SARFAESI NOTICES DATED 29.04.2021 ISSUED U/S 13(2) OF
SARFAESI ACT AT ANNEXURE-N OF THE PETITION AND ISSUE A
WRIT OF MANDAMUS AND/OR ANY OTHER WRIT/DIRECTION/OR
ORDER    DIRECTING   RESPONDENT    NOT  TO   TAKE   ANY
COERCIVE/ADVERSE STEPS ON THE BASIS OF WRONG
CLASSIFICATION OF THE PETITIONER'S ACCOUNT AS NPA
WITHOUT FOLLOWING SUPREME COURT ORDER DATED 3.9.2020
AT ANNEXURE-R AND ETC.

     THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
ON 30.03.2023 COMING ON FOR PRONOUNCEMENT OF ORDER,
THIS DAY, THE COURT MADE THE FOLLOWING:
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                                             WP No.100897 OF 2022




                                ORDER

The captioned writ petition is filed by borrower seeking following reliefs:

a) Issue a writ or order of the appropriate nature to set-aside respondent's SARFAESI notices dated 29.04.2021 issued u/S 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'SARFAESI Act') and annexed at Annexure-N of the petition and grant all consequential reliefs;

b) Issue a writ of mandamus and/or any other writ/direction/or order directing the respondent to not take any coercive/adverse steps on the basis of wrong classification of the petitioners account as NPA without following Supreme Court order dated 3.9.2020 annexed at Annexure-R.

c) Pass any appropriate writ/direction/or order directing the respondent to set-aside the order dated 30.11.2020 classifying the account of the petitioner as Non-Performing Asset (NPA) and classify the account as standard account annexed at Annexure-Q.

d) Issue a writ of mandamus and/or any other writ/direction/or order directing respondent to not take any coercive/adverse steps on the basis of the SARFAESI Notices dated WP No.100897 OF 2022 29.04.2021 against the subject properties of the petitioners annexed at Annexure-N.

e) Directing the District Magistrate Bagalkot not to proceed in the proceedings u/S 14 of the SARFAESI Act and take forceful possession of the mortgaged properties.

2. The petitioner intends to seek indulgence at the hands of writ Court and thereby sought a writ of certiorari to set-aside the respondent's SARFAESI notices dated 29.04.2021 issued under Section 13(2) of SARFAESI Act. The petitioner is challenging the very classification of his account as NPA by the respondent/Bank, which is in utter violation of Hon'ble Apex Court's interim order dated 3.9.2020 granted in Gajendra Sharma Vs. Union of India & Another1, wherein undertaking was given by learned Senior Counsel on behalf of RBI and Hon'ble Apex Court by way of interim order restrained the Banks from classifying the accounts of borrowers as NPA. The petitioner placing reliance on the said interim order passed in Gajendra Sharma's case supra vide Annexure-R, has questioned the action of respondent/Bank in issuing WP No.100897 OF 2022 notices under Section 13(2) of the SARFAESI Act and consequently, has sought direction at the hands of this Court to classify his account as Standard Account by setting aside the order passed by the respondent/Bank dated 30.11.2020 classifying the account of the petitioner as NPA.

3. Heard the learned counsel for the petitioner and learned counsel for respondent/Bank. I have given my anxious consideration to the judgment relied on by the learned counsel for the petitioner in the case of Small Scale Industries Manufactures Associations (Registered) Vs. Union of India & Others2.

4. A short point that needs consideration at the hands of this Court is as to whether captioned writ petition assailing the notices issued under the provisions of SARFAESI Act can be entertained and whether interim order granted by the Hon'ble Apex Court in Gajendra Sharma's case vide Annexure-R can be looked into in (2021) 8 SCC 511 WP No.100897 OF 2022 view of disposal of main matter by the Hon'ble Apex Court vide order dated 27.11.2020.

5. Before I advert to maintainability of the writ petition as rightly pointed out by the learned counsel for respondent/Bank, the petitioner is relying on interim order granted by the Hon'ble Apex Court in Gajendra Sharma's case supra, wherein the Hon'ble Apex Court issued direction to the Banks that the accounts which were not declared as NPA till 31.08.2020 shall not be declared as NPA till further orders. Based on this interim order, the present writ petition is filed by the petitioner challenging the initiation of action of respondent/Bank against the petitioner under the provisions of SARFAESI Act. As rightly pointed out by the learned counsel for the respondent/Bank, pursuant to the interim order granted in Gajendra Sharma's case supra, the Hon'ble Apex Court has decided the main matter itself by order dated 27.11.2020. It is trite law that any interim order granted by the Court would merge with final order. Therefore, this Court is of the view that action initiated by the WP No.100897 OF 2022 respondent/Bank in issuing notice under Section 13(2) of the SARFAESI Act, which is subsequent to final order passed by the Hon'ble Apex Court in Gajendra Sharma's case would not come to the aid of the petitioner. Therefore, the petitioner cannot assail the correctness and legality of the notice issued under Section 13(2) of the SARFAESI Act.

6. The contention of the petitioner that the respondent/Bank infact was bound by the order passed by the Hon'ble Apex Court in the case of Small Scale Industries Manufactures Associations supra also cannot be acceded to. As rightly pointed out by the learned counsel for the respondent/Bank, grievance in that case was restricted to MSME loans and personal loans upto Rs.2 Crores. Therefore, scheme granting relief of waiver was only confined to few classified loans which are culled out at paragraph-37 of the said judgment. Therefore, the petitioner cannot place reliance on the judgment rendered by the Hon'ble Apex Court in Small Scale Industries Manufactures Associations supra.

WP No.100897 OF 2022

7. If the petitioner cannot place reliance on the aforesaid judgment cited supra, next point that falls for consideration before this Court is as to whether petitioner could have maintained a writ questioning the action of secured creditor invoking the provision of SARFAESI Act.

8. The contention of the petitioner that jurisdiction of this Court is offshoot in the light of judgment of the Hon'ble Apex Court in Godrej Sara Lee Ltd. Vs. Excise and Taxation Officer-cum-Assessing Authority and Others3 also cannot be acceded to. The present case on hand does not indicate as to seeking enforcement of any fundamental right or that there is violation of principles of natural justice. Pleadings in the writ petition also do not indicate that there is initiation of action by the respondent/Bank, which is found to be wholly without jurisdiction. If the principles laid down by the Hon'ble Apex Court in the case of Godrej Sara Lee Ltd. supra are not applicable, then this Court is not inclined to entertain 2023 SCC Online SC 95 WP No.100897 OF 2022 the writ petition and consider prayers in the instant writ petition.

9. Division Bench of this Court by placing reliance on the judgment of Hon'ble Apex Court in the case of United Bank of India Vs. Satyawati Tondon and others4 has held that borrower has an alternate and equally efficacious remedy under Section 17 of the SARFAESI Act. Therefore, Division Bench of this Court while setting aside the order of the learned Single Judge entertaining the writ petition relating to action initiated under the provisions of SARFAESI Act has held that writ Court should not entertain writ petition, when the aggrieved party has efficacious remedy before the Tribunal. Relevant paragraph-55 of the judgment rendered in Satyawati Tondon supra reads as under:

"55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to (2010) 8 SCC 110 WP No.100897 OF 2022 recover their dues. We hope and trusts that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection."

10. In view the principles laid down by Hon'ble Apex Court in Satyawati Tondon supra holding that SARFAESI Act is complete code in itself which provides procedure to be followed by the secured creditor and the act equally contemplates efficacious remedy for borrower also, this Court is not inclined to entertain the writ petition. Accordingly, writ petition stands dismissed as devoid of merits.

SD/-

JUDGE JTR