Punjab-Haryana High Court
M/S Romax Steels Pvt. Ltd. And Anr vs Bank Of Maharashtra And Anr on 15 February, 2024
Author: Lisa Gill
Bench: Lisa Gill
Neutral Citation No:=2024:PHHC:021789-DB
2024:PHHC:021789-DB
230
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP-15851-2022
Date of Decision: 15.02.2024
M/S ROMAX STEELS PVT. LTD. AND ANR
..... Petitioners
Versus
BANK OF MAHARASHTRA AND ANR
..... Respondents
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MRS. JUSTICE AMARJOT BHATTI
Present: Mr. Paras Jain, Advocate for
Mr. Pankaj Gupta, Advocate
for the petitioners.
Mr. J.S. Bagga, Advocate
for respondent No. 1-Bank.
Mr. Rohit Bansal, Senior DAG, Punjab.
****
LISA GILL, J.(oral)
1. Prayer in this writ petition is for quashing notice (Annexure P-
4) dated 11.04.2022 issued by respondent No.1-Bank under Section 13(4) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act') and order dated 30.06.2022 (Annexure P-8) passed by Additional District Magistrate, Ludhiana under Section 14 of SARFAESI Act.
2. Learned counsel for petitioners fairly states that matter is covered against petitioners 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 :-
1 of 4 ::: Downloaded on - 21-02-2024 22:27:46 ::: Neutral Citation No:=2024:PHHC:021789-DB CWP-15851-2022 -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.
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 here-in-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 2 of 4 ::: Downloaded on - 21-02-2024 22:27:47 ::: Neutral Citation No:=2024:PHHC:021789-DB CWP-15851-2022 -3- 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, 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. 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).
4. As interim order passed in favour of petitioners on 25.07.2022 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 3 of 4 ::: Downloaded on - 21-02-2024 22:27:47 ::: Neutral Citation No:=2024:PHHC:021789-DB CWP-15851-2022 -4- petitioners to avail appropriate remedy as may be available in accordance with law. In case, petitioners file appropriate application/petition accompanied with requisite application(s), question of continuance or otherwise of interim order in petitioners' favour is necessarily in the realm of consideration by the appropriate Forum in accordance with law, without being influenced by any order, which may have been passed in this writ petition.
5. It is clarified that interim protection afforded to petitioners shall not enure beyond 20 working days in the absence of appropriate order by competent authority/Tribunal in accordance with law.
6. Pending miscellaneous application(s), if any, stand disposed of accordingly as well.
(LISA GILL)
JUDGE
15.02.2024 (AMARJOT BHATTI)
lalit JUDGE
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
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