Uttarakhand High Court
Pooran Lal Arya And Ors. vs State Of Uttaranchal And Ors. on 4 July, 2005
Equivalent citations: III(2007)BC285, [2006]133COMPCAS348(UTTARANCHAL)
Bench: Chief Justice, Rajesh Tandon
JUDGMENT Cyriac Joseph, C.J.
1. The petitioners are aggrieved by the action taken by the respondents under the provisions of Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of 2002). They challenge annexure 3 order passed by the second respondent, District Magistrate, Nainital, for the recovery of the amount due to the third respondent-bank from the petitioners.
2. Section 17(1) of Act 54 of 2002 reads thus:
17. Right to appeal.-(1) Any person (including borrower), aggrieved by any of the measures referred to in Sub-section (4) of Section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within fortyfive days from the date on which such measures had been taken:
Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.
3. In view of the above provisions contained in Section 17(1) of the said Act, the petitioners have an effective alternate remedy of filing an application before the Debts Recovery Tribunal against the action initiated against them. Therefore, we do not consider it necessary or proper to entertain this writ petition.
4. Learned counsel for the petitioners submitted that in view of the defect in annexure 4 notice dated April 18, 2004, the entire proceedings were vitiated and therefore the respondents were not entitled to proceed against the petitioners on the basis of the said notice. The defect pointed out by learned Counsel for the petitioners is that even though Section 13(2) of the abovementioned Act requires that the borrower should be given 60 days' time to discharge, in full, his liabilities to the secured creditor, in annexure 4 notice only a period of a fortnight was given to the borrower. Learned counsel invited our attention to the following sentence in annexure 4 notice:
All of you are, therefore, required to please clear off the all out-standings dues of my client in lump sums together with all cost and expenses and upto date interest within a fortnight from the date of issuance of this notice, failing which my client shall be compelled to recover the same through all the process of law with cost and expenses along with the process of recovery as available in Central Act No. 54 of 2002, soon after the expiry of 60 days of this notice.
5. Section 13(2) of the Act 54 of 2002 reads thus:
13(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under Sub-section (4).
6. Technically, the contention of learned Counsel for the petitioners is right, in as much as the borrower was required to clear off the outstanding dues in lump sum within a fortnight from the date of issue of the notice. At the same time, there was substantial compliance with the requirement under the statutory provision, in as much as the third respondent-bank threatened to take action under Act 54 of 2002 only after the expiry of a period of 60 days of the notice. It has also to be taken into account that an earlier notice dated September 16, 2003 (annexure CA 2 to the counter affidavit filed by the third respondent) had been issued to the petitioners strictly in compliance with Section 13(2) of Act 54 of 2002, but the petitioners failed to pay the dues within the time stipulated in the said notice. Even though another notice under Section 13(2) was not required, the third respondent issued annexure 4 notice. Even after issuing annexure 4 notice, the petitioners did not pay the dues even within 60 days and only thereafter the third respondent-bank initiated action under Section 13(4) of Act 54 of 2002.
7. Hence notwithstanding the technical error in annexure 4 notice requiring the petitioners to clear off the dues within a fortnight from the date of issue of the notice, there was substantial compliance with the statutory provision and the petitioners actually got more than the time required to be given under Section 13(2) and no injustice was done to the petitioners. Therefore, it is not proper to invoke the jurisdiction of this court under Article 226 of the Constitution of India.
8. While issuing notice in this writ petition, the petitioners were directed on January 19, 2005, to deposit a sum of Rs. 2,00,000 as a condition for staying the proceedings for recovery. When the petitioners did not pay the said amount, a further order was passed on April 23, 2005, directing that if the amount of Rs. 2,00,000 was not deposited on or before May 13, 2005, the stay order passed on January 19, 2005, would stand vacated. Even then the petitioners did not pay any portion of the dues. In such circumstances, the petitioners do not deserve any sympathy from this court.
9. Hence the writ petition is dismissed, without prejudice to the right of the petitioners to approach the Debts Recovery Tribunal under the provisions of Act 54 of 2002.