Punjab-Haryana High Court
M/S Ambco Embroideries And Others vs State Of Haryana And Others on 24 January, 2024
Author: Lisa Gill
Bench: Lisa Gill
Neutral Citation No:=2024:PHHC:009546-DB
232 2024:PHHC:009546-DB
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-59-2020
Date of Decision: January 24, 2024
M/S AMBCO EMBROIDERIES AND OTHERS ..... Petitioners
Versus
STATE OF HARYANA AND OTHERS ..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MS. JUSTICE AMARJOT BHATTI
Present: Mr. H.S. Jagdev, Advocate for the petitioners.
Mr. Deepak Grewal, DAG, Haryana.
Mr. Raj Kumar, Advocate for respondent No. 3.
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LISA GILL, J.
1. Grievance raised in this writ petition is that petitioner No. 1 being MSME unit has been registered under the Micro, Small and Medium Enterprises Development Act, 2006, however, its case for revival/restructuring was not placed before Designated Committee in terms of guidelines dated 17.03.2016 issued by Reserve Bank of India in respect to 'Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises'. Petitioners, thus, seeks setting aside of proceedings under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short - 'SARFAESI Act') initiated against them on account of violation of said circular.
2. Learned counsel for petitioners is unable to deny that matter is squarely covered against petitioners in view of decision dated 18.12.2023 by this Court in CWP-21657-2022 (M/s Technico Strips and Tubes Pvt. Ltd. and another vs. Deutsche Bank AG and another) and connected writ petitions. It has been held in the said decision as under:-
1 of 4 ::: Downloaded on - 31-01-2024 20:31:41 ::: Neutral Citation No:=2024:PHHC:009546-DB CWP-59-2020 -2- "28. Relationship between the respondent-Bank/Financial Institutions and petitioners is clearly governed by privity of contract between parties. Whether there has been any violation of contractual stipulation between the parties or of the RBI regulations as has been urged before us, is necessarily a mixed question of fact and law. We do not find any merit in the argument that learned DRT does not have power or jurisdiction at the appropriate time, hence this argument is also repelled.
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29. Division Bench of High Court of Himachal Pradesh while considering a similar controversy as the one at hand in case of Neelkanth Yarn Vs. Punjab National Bank (supra)held that judicial scrutiny of declaration of account of the petitioners therein as NPA (petitioners therein also claimed to be MSME) was not called for and it is open to learned DRT to go into all these aspects at the relevant time.
In case of Neelkanth Yarn Vs. Punjab National Bank (supra), it was held as under:-
"27. From the statutory scheme and decisions noted herein- above, it is clear that this Court, in exercise of its jurisdiction, cannot go into the decision of respondent-bank in classifying the petitioner's account as NPA. If the respondent-bank proceeds further and reaches Section 13(4) of the SARFAESI Act stage, the petitioner-firm can file application under Section 17 of the SARFAESI Act. The DRT can go into the aspect of classifying the account as NPA and also whether RBI guidelines have been violated on any aspect leading to declaring the account as NPA and taking recourse under the SARFAESI Act.
28. It has also been repeatedly held that the aspect of classifying an account as NPA is not justiciable in exercise of power of judicial review under Article 226 of the Constitution."
30. We are in agreement with the above view taken by High Court of Himachal Pradesh in abovesaid case. It is well within jurisdiction of learned DRT to adjudicate upon matters relating to validity or otherwise of proceedings undertaken by Banks/Financial Institutions under SARFAESI Act and examine whether necessary parameters have been observed and adhered to and applicable Rules and Regulations, including RBI circulars have been complied with. Any intervention by Courts at this stage would be against the avowed letter 2 of 4 ::: Downloaded on - 31-01-2024 20:31:42 ::: Neutral Citation No:=2024:PHHC:009546-DB CWP-59-2020 -3- and spirit of SARFAESI Act. Issue as raked up in these writ petitions is necessarily within the realm of consideration by learned DRT, at the appropriate juncture. There cannot be a pre-emptory intervention. It was strenuously argued before us that non-intervention by this Court would lead to extremely harsh consequences for petitioners. However, the same cannot be a ground for interference as there is no escape from the provisions of law even if, harsh - 'Dura lex, sed lex'i.e. the law is harsh but it is the law.
31. It is a settled position that provisions of SARFAESI Act prevail over MSME Act with SARFAESI Act being a complete code in itself. There is no scope for interference in the present matters at this stage. It is open to petitioners to avail the remedy(ies) available to them under the statute in accordance with law and agitate all grievances before learned DRT including the question of incorrect classification or otherwise of their accounts NPA. DRT is well within its jurisdiction to consider this aspect."
3. Learned counsel for petitioners is unable to point out any ground in this writ petition which would persuade us to take a different view.
4. Keeping in view the above, this writ petition is dismissed with liberty to petitioners to avail remedy(ies) available to them in accordance with law for redressal of their grievance(s).
5. As interim order granted to petitioners on 07.01.2020 has continued till date, same shall enure for a period of twenty (20) days from the date of receipt of certified copy of this order, in order to enable petitioners to avail appropriate remedy as may be available to them in accordance with law. In case appropriate application/petition is filed by petitioners accompanied with requisite application(s), question of continuance or otherwise of interim order in favour of petitioners is necessarily in the realm of consideration by appropriate forum in accordance with law without being influenced by any order(s), which may have 3 of 4 ::: Downloaded on - 31-01-2024 20:31:42 ::: Neutral Citation No:=2024:PHHC:009546-DB CWP-59-2020 -4- been passed in this writ petition. It is clarified that interim order shall not enure after the period of aforesaid twenty (20) days in the absence of appropriate order by competent authority/Tribunal in accordance with law. There is no expression of opinion on merits of the matter.
(LISA GILL)
JUDGE
(AMARJOT BHATTI)
January 24, 2024 JUDGE
Rts
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
Neutral Citation No:=2024:PHHC:009546-DB
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