M/S. Nagalaxmi Rice Industries, v. The State Bank Of Hyderabad,

HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY AND HON'BLE SRI JUSTICE G.SHYAM PRASAD WP.No.27500 of 2016 Date:18.8.2016 Between:

M/s Nagalaxmi Rice Industries, Shakapuram Village, reptd by its Managing Partner-Somavarapu Ramulu ..... Petitioner And:

The State Bank of Hyderabad, reptd by its Branch Manager, Nalgonda and another.

....Respondents Counsel for the petitioner: Mrs. S.Nanda Counsel for the respondents: None appeared The Court made the following:

ORDER: (per Hon'ble Sri Justice C.V.Nagarjuna Reddy) The petitioner, who is the principal borrower, filed this Writ Petition feeling aggrieved by notice, dated 05.7.2016, of respondent No.2, issued under Section13(2) of the Act, whereunder he was called upon to repay a sum of Rs.3,12,64,686/- with future interest and incidental charges.

After hearing Mrs. S.Nanda, learned counsel for the petitioner, we are of the opinion that no cause of action for availing a legal remedy, much less, invoking the jurisdiction of this Court under Article226 of the Constitution of India, had arisen for the petitioner.

Under Section-13(2) of the Securitization and

Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act'), the secured creditor has a right to issue notice for repayment of the loan amount, which is classified as Non-Performing Asset (NPA) within 60 days from the date of the notice, failing which, the secured creditor shall be entitled to exercise all or any of the rights under Subsection-(4) thereof.

Under Sub-section-3(A) of Section-13 of the SARFAESI Act, on receipt of the notice, if the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable, he shall communicate within one week of receipt of such representation or objection, the reasons for non-acceptance of the representation or objection to the borrower. Under the proviso to Sub-section-3(A), the borrower is barred from preferring an application to the Debt Recovery Tribunal under Section-17 or the Court of District Judge under Section-17-A of the Act, if he is aggrieved by such decision communicated by the secured creditor.

Under the Scheme of the Act, the borrower or the guarantor is entitled to invoke the legal remedies envisaged under Section-17 or 17-A of the Act only after the secured creditor initiates any measures as envisaged under Sub-section-4 of Section-13 of the Act. In the instant case, though the petitioner has stated that possession was taken as far back as 04.12.2015, i.e., even prior to the issuance of the notice under Section-13(2) of the SARFAESI Act, no evidence in support thereof has been filed. At any rate, if such possession was taken, there was no reason for the petitioner for not availing appropriate remedy from 04.12.2015.

Be that as it may, in the present Writ Petition, the petitioner has not questioned the alleged taking of possession by the respondents and what is assailed in

this Writ Petition is only the notice issued under Section13(2) of the SARFAESI Act. If the petitioner is not entitled to avail the remedy under Section-13(2) of the Act as aforesaid, it cannot invoke the jurisdiction of this Court under Article-226 of the Constitution of India.

In this view of the matter, we do not find any reason to entertain this Writ Petition and the same is, accordingly, dismissed.

As a sequel to dismissal of the Writ Petition, WPMP.Nos.34053 and 34054 of 2016 filed by the petitioner for interim relief are dismissed as infructuous. ____________________________ JUSTICE C.V.NAGARJUNA REDDY ______________________ JUSTICE G.SHYAM PRASAD 18th August 2016 DR