Gujarat High Court
Ms Posco Poggenamp Electrical Steel Pvt ... vs Uco Bank Limited on 12 April, 2024
NEUTRAL CITATION
C/SCA/6109/2024 ORDER DATED: 12/04/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6109 of 2024
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MS POSCO POGGENAMP ELECTRICAL STEEL PVT LTD
Versus
UCO BANK LIMITED & ORS.
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Appearance:
MR S.N. SOPARKAR SENIOR ADVOCATE WITH MS ANUSHREE M
SONI(11431) for the Petitioner(s) No. 1
for the Respondent(s) No. 1,2,3,4
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CORAM:HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
Date : 12/04/2024
ORAL ORDER
1. In the first session, Ms. Anushree M. Soni, learned Counsel for the petitioner has requested for urgent circulation of present petition today.
2. Considering the facts and circumstances of present case, the Court has granted permission to circulate present petition. In that view of the matter, present petition is taken up for admission hearing at 2.30 p.m. today.
3. The petitioner has filed present petition under Articles 14, 19(1)(g), 21, 226 and 300A of the Constitution of India, under the provisions of Secularization and Page 1 of 7 Downloaded on : Mon Apr 15 22:13:55 IST 2024 NEUTRAL CITATION C/SCA/6109/2024 ORDER DATED: 12/04/2024 undefined Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI" for short) and under the provisions of the Security Interest (Enforcement) Rules 2002 seeking below mentioned relief/s:-
"12. (A) YOUR LORDSHIPS may be pleased to admit and allow this petition, in the interest of justice;
(B) YOUR LORDSHIPS may be pleased to issue appropriate writ, direction and order quashing and setting aside the impugned order dated 10th April 2024 passed by the Ld. DRT-II in Securitization Application No. 863 of 2023 marked as Annex-'A'.
(C) YOUR LORDSHIPS may be pleased to issue appropriate writ, direction and order quashing and setting aside the Order dated 25th November 2023 marked as Annex-'T' and 26th March 2024 marked as Annex-'B' passed by the Ld. Chief Judicial Magistrate in Application No. 159 of 2023.
(D) Pending the admission, hearing and final disposal of this petition, YOUR LORDSHIPS may be pleased to stay the implementation, operation and execution of impugned order dated 25th November 2023 marked as Annex-'T' and 26th March 2024 marked as Annex-'B' passed by the Ld. Chief Judicial Magistrate in Application No.159 of 2023 and further be pleased to restrain the Respondent No. 1 from taking possession of the immovable and movable assets of the Petitioner and be also restrained from taking further measures under the provisions of the SARFAESI Act, 2002 in relation to the subject property of the Petitioner and maintain status quo qua the subject property, in the interest of justice;
(E) YOUR LORDSHIPS may be pleased to grant such Page 2 of 7 Downloaded on : Mon Apr 15 22:13:55 IST 2024 NEUTRAL CITATION C/SCA/6109/2024 ORDER DATED: 12/04/2024 undefined other and further relief as deemed just and proper in the interest of justice."
4. The brief facts giving rise to present petition are that the Petitioner is the Private Limited company registered under the Companies Act and engaged in the business of manufacturing of Transformer Laminations made from CRGO/CRNGO electrical steel, which forms the core of high value power/ distributor transformers and reactors. The Petitioner falls under the category of 'Small' Enterprise as per the Micro, Small and Medium Enterprises Development Act, 2006.
4.1 The Petitioner has employed a strength of 121 staff who are currently working at the premises of the Petitioner. Out of the 121 employees, 82 are workers and 39 are the office staff. The Petitioner has not laid off a single employee since the year 2021 and has been regularly paying their salaries and statutory dues without any delay or demur. The Respondent Nos. 1 and Respondent No. 2 Bank had under Consortium lending granted Cash Credit facility amounting to Rs. Rs.15.00 Page 3 of 7 Downloaded on : Mon Apr 15 22:13:55 IST 2024 NEUTRAL CITATION C/SCA/6109/2024 ORDER DATED: 12/04/2024 undefined Crores and [2] Term Loan of facility of Rs.1.40 Crores aggregating to Rs.16.40 Crores in the year 2013. While the Respondent No. 2 granted [1] Cash Credit facility of Rs.5.00 Crores [2] Inland LC backed bill discounting of Rs.5.00 Crores [2] Term Loan-I facility of Rs.1.38 Crores and [4] Term Loan-II facility of Rs.0.92 Crores totally sum of Rs.12.30 Crores in the year 2013.
4.2 Towards sanctioning of the aforesaid credit facilities, the Petitioner had hypothecated its movable assets on first charge pari passu basis upon the Respondent No. 1 and 2. It appears that on 4th May 2021 the respondent No.1 addressed an email communication to respondent No.2 informing that the account of petitioner has been classified as a Non-Performing Asset from 31st March 2021 due to unavailability of drawing power and absence of sufficient primary security. Thereafter, a meeting was held on 26.5.2021 between respondent No.2 and representative of the petitioner on relevant aspects. On 10th June 2021, the respondent No.1 issued a Demand Notice under Sections 13(2) of the SARFAESI Act and the Page 4 of 7 Downloaded on : Mon Apr 15 22:13:55 IST 2024 NEUTRAL CITATION C/SCA/6109/2024 ORDER DATED: 12/04/2024 undefined said notice was replied by the petitioner on 14.8.2021. Again on 19.11.2022 the respondent No.2 issued Demand Notice under Sections 13(2) of the SARFAESI Act and the said notice was replied by the petitioner on 19.1.2023. On 14.1.2022 the respondent No.1 published in Financial Express its notice for taking symbolic possession of the immovable properties of the petitioner. Subsequently respondent No.1 filed an Application No. 159 of 2023 before the learned Chief Judicial Magistrate, Kheda dated 30.9.2023 for taking physical possession of the immovable property of the petitioner and Court directed the Court Commissioner to take physical possession of the immovable property of the petitioner. Thereafter, the petitioner filed the Securitization Application No. 863 of 2023 before the learned Debt Recovery Tribunal-II at Ahmedabad and filed undertaking. Thereafter, some other proceedings have taken place and finally orders dated 25.11.2023, 26.3.2024 and 10.4.2024 came to be passed by the competent authority and therefore, the petitioner has preferred present petition.
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5. Heard Mr. S.N. Soparkar, learned Senior Counsel assisted by Ms. Aushree M. Soni, learned Counsel for the petitioner.
6. Earlier, this Court has not entertained the petitions being Special Civil Application No.16315 of 2023 vide order dated 04.04.2024 and Special Civil Application No.3477 of 2024 vide order dated 27.02.2024 etc on the ground that there is statutory efficacious remedy available under the provisions of the SARFAESI Act, 2002.
7. After arguing some time, Mr. Soparkar, learned Senior Counsel appearing for the petitioner seeks permission to approach before the Debt Recovery Appellate Tribunal by way of preferring appropriate proceedings along with the application for interim relief. Learned Senior Counsel appearing for the petitioner seeks to indulge that at least three weeks, the respondents may not take any coercive action for taking over possession of the secured asset. Page 6 of 7 Downloaded on : Mon Apr 15 22:13:55 IST 2024
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8. Permission as sought for is granted. The petitioner may approach the Debt Recovery Appellate Tribunal by way of preferring appropriate proceedings along with the application for interim relief. The Tribunal shall decide the application as expeditiously as possible preferably within a period of three weeks in accordance with law from the date of receipt of the copy of the order. Till then, the concerned respondent - Bank shall not take any coercive steps against the petitioner. However, on completion of such time period, if the petitioner is unable to get any interim relief, the same shall automatically stand vacated. It is open for the petitioner to inform the concerned respondent - Bank by any mode of communication.
9. With aforesaid direction, present petition stands disposed of accordingly.
Direct service is permitted TODAY.
(HEMANT M. PRACHCHHAK,J) SURESH SOLANKI Page 7 of 7 Downloaded on : Mon Apr 15 22:13:55 IST 2024