Telangana High Court
Sriven Marketing vs The Union Of India And 4 Others on 27 April, 2022
Author: Surepalli Nanda
Bench: Surepalli Nanda
THE HONOURABLE SRI JUSTICE UJJAL BHUYAN
AND
THE HONOURABLE MRS JUSTICE SUREPALLI NANDA
WRIT PETITION No.21417 of 2022
ORDER:(Per Hon'ble Sri Justice Ujjal Bhuyan) Heard Mr. Abhinav Krishna Uppaluri, learned counsel for the petitioner and Mr. B.Mukherjee, learned counsel appearing on behalf of Mr. N.Rajeshwar Rao, learned Assistant Solicitor General for respondent No.1- Union of India.
2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks the following reliefs:
"a) Declaring the action of the respondent no.3 bank refusing to restructure the loan A/c no. HHLHYM00437996 and HHLHYM00438334 of the Petitioners herein in accordance with the Resolution Frame Work 1.0 dated 06.08.2022 and Resolution Frame Work 2.0, dated 05.05.2021 issued by the respondent no.2 as arbitrary, illegal, violative of said Notifications issued by the respondent no.2 2 UB,J & SN,J W.P.No.21417 of 2022 and the same being violative Article 14 and Article 21 of the Constitution of India.
b) To declare the deliberate action of not responding to the restructuring application of the Petitioner dated: 03.06.2021 within 30 days of receiving the restructuring application as arbitrary, illegal and violative clause 2 (vi) of Resolution Frame Work 2.0: dated: 05.05.2021 issued by Respondent no.2 and the same being violative Article 14 and Article 21 of the Constitution of India.
c) Declare the action, of the Respondent No 3 in declaring the petitioners Loan A/c No.HHLHMYM00438334 and HHLYHM004 37996 as a Non-Performing Asset and subsequently issuing 13(2) and 13 (4) Notices under the SARFAESI Act 2002 without restructuring the Loan account despite the petitioner being eligible for the restructuring in accordance with the RBI RESOLUTION FRAME WORK 2.0 Dated:
05.05.2021 as illegal and arbitrary and violative of Article 14 and 21 of constitution of India.
d) Consequently direct the respondent no.5 to dispose of the complaint/grievance forwarded by the respondent no.4 dated:
13.02.2022 in accordance with Resolution
3 UB,J & SN,J W.P.No.21417 of 2022 Frame Work 2.0: Resolution of Covid 19 related stress of Micro, Small and Medium Enterprises vide Circular RBI/2021-22/32, DOR.STR.REC.12/21.
04.048/2021-22, dated: 05.05.2021
issued by the respondent no.2 as
expeditiously as possible and in the
meanwhile direct the respondent no.3 to not take any coercive steps against the Petitioners with regards to the loan account No. HHLHYM00437996 and HHLHYM00438334 and the related secured property, and pass any other order or orders as this Hon'ble Court deems necessary and appropriate in the interest of justice."
3. From the above, it is evident that basic grievance of the petitioner is directed against respondent No.3 in refusing to re-structure the loan accounts of the petitioner in terms of Resolution Frame Work 2.0 dated 05.05.2021.
4. Petitioner had availed loan from respondent No.3 in the year 2018, but because of various reasons, defaulted in repayment. It is stated that petitioner had 4 UB,J & SN,J W.P.No.21417 of 2022 submitted application to respondent No.3 for re-structuring of the loan accounts on 24.12.2020 because of the difficulties faced on account of COVID-19 pandemic. It may be mentioned that respondent No.3 classified the two loan accounts as Non-Performing Assets (NPAs) on 12.10.2021 and 09.08.2021 respectively, whereafter notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly referred to hereinafter as the 'SARFAESI Act') was issued. From the documents placed on record, it is not known whether petitioner has filed objections/representation to the notice issued by respondent No.3 under Section 13(2) of the SARFAESI Act.
5. Be that as it may, alleging that respondent No.3 was not re-structuring the loan account as prayed for by the petitioner, a complaint was lodged before the Ombudsman. However, the complaint was forwarded to National Housing Bank by the office of the Ombudsman taking the view that the complaint was not maintainable.
5 UB,J & SN,J W.P.No.21417 of 2022
6. We may mention that yesterday i.e., on 26.04.2022, we had dismissed a writ petition filed by the present petitioner on identical facts being W.P.No.21046 of 2022. In that case, the financial institution was PNB Housing Finance Limited.
7. This petition is not maintainable for more than one reason. Firstly, we are at the stage of issuance of demand notice under Section 13(2) of the SARFAESI Act. The law is very clear that as against a notice under Section 13(2) of the SARFAESI Act, no cause of action arises for an aggrieved person including a borrower to approach the jurisdictional Debts Recovery Tribunal under Section 17 of the SARFAESI Act, which can be done only when the stage of Section 13(4) of the SARFAESI Act is reached. To that extent, filing of the present writ petition is premature. Secondly, we do not find any provision in the SARFAESI Act providing for any role either to the Ombudsman or to the National Housing Bank in matters covered by the 6 UB,J & SN,J W.P.No.21417 of 2022 SARFAESI Act. Thirdly, respondent No.3 in this case is India Bulls Housing Finance Limited, which is a private financial institution. In the recent decision of the Supreme Court in Phoenix ARC Private Limited vs. Vishwa Bharati Vidya Mandir1, Supreme Court has clarified that a writ petition against a private financial institution under Article 226 of the Constitution of India for proposed actions/actions under Section 13(4) of the SARFAESI Act would not be maintainable. Respondent No.3 being a private financial institution, no writ is maintainable against respondent No.3 that too when we are still at the stage of notice under Section 13(2) of the SARFAESI Act. In fact in the said decision, Supreme Court has severely criticized the practice of filing writ petitions by borrowers under Article 226 of the Constitution of India against actions or proposed actions under Section 13(4) of the SARFAESI Act by opining that filing of such writ petitions is an abuse of the process of the Court.
1 2022 SCC Online SC 44 7 UB,J & SN,J W.P.No.21417 of 2022
8. For all the aforesaid reasons, we are not inclined to entertain the writ petition.
9. Writ Petition is accordingly dismissed. However, there shall be no order as to costs.
10. As a sequel, miscellaneous applications pending, if any, in this Writ Petition, shall stand closed.
______________________ UJJAL BHUYAN,J _________________________ SUREPALLI NANDA, J Date: 27.04.2022 KL