Ksk Cold Storage v. The Deputy General Manager

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 07.07.2021 CORAM :

THE HON'BLE MR.SANJIB BANERJEE, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY W.P.No.14005 of 2021 and W.M.P.No.14872 of 2021 KSK Cold Storage, Rep. by its Partner, S.K.Mohamed Farukh, S/o.Kamal Basha, Annur Rd., Jadayampalayam Panchayat, Therampalayam, Mettupalayam Taluk 641 301, Coimbatore District.

..Petitioner Vs.

1. The Deputy General Manager, State Bank of India, Administrative Office, Coimbatore Zone, Kurinji Complex, State Bank Road, Coimbatore 641 018.

2. The Assistant General Manager, The State Bank of India, SME, Siruthozhil Branch, 9, D-1, Ramakrishnapuram, Karur 639 001.

3. The Branch Manager, State Bank of India, Siruthozhil Branch Karur, 9, D-3, Ramakrishnapuram, Karur 639 001.

..Respondents Prayer: Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorarified Mandamus calling for the records relating to the impugned proceedings issued by the 2nd respondent in Notice dated 03.05.2021 issued u/s.13(2) of SARFAESI Act and quash the same and consequently direct the respondents to implement the loan restructuring scheme according to the RBI notification bearing No.RBI/2020-21/17 DOR.No.BP.BC/4/21.04.048/2020-21 dated 06.08.2020 and guidelines of the respondent Bank and to provide the respondent with the account statement of all his loan accounts with online access.

For Petitioner :

Mr.PA.Saigovindaraja

ORDER

(Made by the Hon'ble Chief Justice) The petitioner has obviously jumped the gun in seeking to challenge a notice issued by the respondent secured creditor under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

2. The fundamental premise of the petitioner's challenge is that the secured creditor has not acted in accordance with the loan restructuring scheme envisaged by a Reserve Bank of India notification dated August 6, 2020 and even the guidelines of the State Bank of India itself.

3. It is now judicially recognised and accepted that a mere notice under Section 13 (2) of the Act is not justiciable. Indeed, upon the vires of the Act of 2020 being challenged, the observations made by the Supreme Court in the Mardia Chemicals case [(2004) 4 SCC 311] resulted in an amendment being introduced to Section 13 which requires the secured creditor to consider the borrower's response to a notice issued under Section 13 (2) of the Act before proceeding to take measures under Section 13 (4) thereof.

4. Again, it is judicially accepted that the response of the secured creditor to the objections raised by the borrower upon receipt of a notice under Section 13 (2) of the Act is not justiciable and only upon measures being taken by a secured creditor under Section 13 (4) of the Act, may any aggrieved person, including a borrower, approach the jurisdictional Debts Recovery Tribunal for redressal of his grievance.

5. Since the purpose of the Act of 2002 is to enable quick recovery of blocked funds for such funds to be available for recirculation in the economy and for secured assets to be sold expeditiously to realise the dues, the efficacious alternative remedy available to the petitioner must be respected and the Writ Court should be slow in entertaining any challenge prior to measures being adopted under Section 13 (4) of the Act and the person aggrieved approaching the appropriate Debts Recovery Tribunal under Section 17 of the Act.

6. For the reasons aforesaid, the petition is not entertained and the merits of the matter are not gone into. It will be open to the petitioner to respond to the notice received under Section 13 (2) of the Act, if the time therefor is still available. In any event, once the respondent secured creditor adopts any measure under Section 13 (4) of the Act and the

petitioner is aggrieved thereby, the petitioner may approach the jurisdictional Debts Recovery Tribunal in accordance with law. W.P.No.14005 of 2021 is dismissed without any order as to costs. Consequently, W.M.P.No.14872 of 2021 is closed. Sd/- Assistant Registrar(CS-VIII) //True Copy// Sub Assistant Registrar sra To:

1. The Deputy General Manager, State Bank of India, Administrative Office, Coimbatore Zone, Kurinji Complex, State Bank Road, Coimbatore 641 018.

2. The Assistant General Manager, The State Bank of India, SME, Siruthozhil Branch, 9, D-1, Ramakrishnapuram, Karur 639 001.

3. The Branch Manager, State Bank of India, Siruthozhil Branch Karur, 9, D-3, Ramakrishnapuram, Karur 639 001.

+1cc to Ms.R.Roshini, Advocate, S.R.No.31924 W.P.No.14005 of 2021 GPL(CO) RGA(13/08/2021)