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Gujarat High Court

Aquafil Polymers Co. Pvt Ltd. & 2 vs Union Of India & 3 on 21 July, 2014

Bench: Bhaskar Bhattacharya, J.B.Pardiwala

         C/SCA/10112/2014                                  ORDER




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            SPECIAL CIVIL APPLICATION NO. 10112 of 2014

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          AQUAFIL POLYMERS CO. PVT LTD. & 2....Petitioner(s)
                             Versus
                UNION OF INDIA & 3....Respondent(s)
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Appearance:
MR MITUL SHELAT WITH MS.AVNI H PANDYA, ADVOCATE for the
Petitioner(s) No. 1 - 3
MR DEVANG VYAS, ADVOCATE for the Respondent(s) No. 1
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         CORAM: HONOURABLE THE CHIEF JUSTICE MR.
                BHASKAR BHATTACHARYA
                and
                HONOURABLE MR.JUSTICE J.B.PARDIWALA

                            Date : 21/07/2014


                             ORAL ORDER

(PER : HONOURABLE THE CHIEF JUSTICE MR. BHASKAR BHATTACHARYA) Supplementary affidavit filed today by the petitioners be kept with the record and be made part of the petition.

By filing this Special Civil Application, the petitioners have prayed for declaring section 2(1)(o) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, [the Securitisation Act, hereafter] as ultra vires the Constitution of India. The petitioners have also prayed for declaring paragraph 2.1 of the RBI guidelines known as Income Recognition and Prudential Norms as ultra vires the Constitution of India and the Securitisation Act.

By our common CAV judgment dated 24th April 2014 passed in Special Civil Application No. 14908 of 2012 and analogous matters, we have disposed of 79 writ-applications raising similar challenge by partly allowing the writ-applications by holding that paragraph 2.1 of the RBI Guidelines is intra vires Article 14 of the Constitution of India and, at the same time, holding that the amended provisions of section 2(1)(o) of the Securitisation Act are ultra vires the Article 14 of the Constitution and the object of the Securitisation Act itself and consequently, we restored the provisions which existed earlier, i.e. prior to the amendment of 2004 and existed at the time of decision of the Supreme Court in the case of Mardia Chemicals Ltd. v. Union of India reported in AIR 2004 SC 2371.

For the selfsame reasons and grounds recorded in our common CAV judgment dated 24th April 2014 passed in Special Civil Application No. 14908 of 2012 and analogous matters, we partly allow this writ-application by holding that the amended provisions of section 2(1)(o) of the Securitisation Act are ultra vires the Article 14 of the Constitution and the object of the Securitisation Act itself and consequently, we restore the provisions which existed earlier, i.e. prior to the amendment of 2004. We, however, hold that paragraph 2.1 of the RBI Guidelines is intra vires Article 14 of the Constitution of India.

We make it clear that we have restricted our scrutiny only to the aforesaid two questions and we have not gone into the other questions involved in this writ-application.

This writ-application is partly allowed accordingly.

(BHASKAR BHATTACHARYA, CJ.) (J.B.PARDIWALA, J.) pirzada Page 3 of 3