Punjab-Haryana High Court
M/S Sangam Construction vs Punjab And Sind Bank And Anr on 15 January, 2024
Author: Lisa Gill
Bench: Lisa Gill
Neutral Citation No:=2024:PHHC:004594-DB
2024:PHHC:004594-DB
121 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-20607-2023
Date of Decision: January 15, 2024
M/S SANGAMCONSTRUCTION ..... Petitioner
Versus
PUNJABAND SIND BANK AND ANOTHER ..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MS. JUSTICE AMARJOT BHATTI
Present: Ms. Sidhi Bansal, Advocate for the petitioner.
Mr. Gaurav Goel, Advocate for respondent - Bank (through VC).
****
LISA GILL, J.
1. Grievance raised in this writ petition is that petitioner 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'.
2. Learned counsel for petitioner is unable to deny that matter is squarely covered against petitioner in view of decision dated 18.12.2023 in CWP-
21657-2022 (M/s Technico Strips and Tubes Pvt. Ltd. and another vs. Deutsche Bank AG and another) and connected writ petitions, wherein it has been held as under:-
"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 1 of 3 ::: Downloaded on - 19-01-2024 22:38:27 ::: Neutral Citation No:=2024:PHHC:004594-DB CWP-20607-2023 -2- merit in the argument that learned DRT does not have power or jurisdiction at the appropriate time, hence this argument is also repelled.
xxx xxx xxx
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 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, 2 of 3 ::: Downloaded on - 19-01-2024 22:38:28 ::: Neutral Citation No:=2024:PHHC:004594-DB CWP-20607-2023 -3- 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 petitioner is unable to point out any ground in this writ petition which would persuade us to take a different view.
4. Writ petition is, accordingly, dismissed with liberty to petitioner to avail remedy(ies) available to it in accordance with law. It is always open to parties to arrive at any mutually acceptable settlement.
5. It is clarified that there is no expression of opinion on the merits of the matter.
(LISA GILL)
JUDGE
(AMARJOT BHATTI)
January 15, 2024 JUDGE
rts
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
Neutral Citation No:=2024:PHHC:004594-DB 3 of 3 ::: Downloaded on - 19-01-2024 22:38:28 :::