Emkay Steel Agencies v. Union Of India
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 24.07.2017
CORAM
THE HON'BLE Mr. JUSTICE M. DHANDAPANI W.P.No.29061 of 2004 and W.P.M.P.No.32597 of 2004 Emkay Steel Agencies, Rep. by its Proprietor, Mr.N.Mohamed Kasim, 50, Sub Jail Road, Thiruchirapalli-620 008 ... Petitioner .
.vs..
1. Union of India, Represented by Joint Secretary to Government, Ministry of Finance, New Delhi 110 001.
2. M/s.The Tamilnadu Mercantile Bank, Represented by its Authorized Officer, Regional Office, Kakkan Street, Shenoy Nagar, Madurai.
3.The Debts Recovery Tribunal, Coimbatore.
... Respondents Petition filed under Article 226 of The Constitution of India praying to issue a writ of declaration declaring that the order dated 06/04/2014 passed by the first respondent namely The Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act (Removal of Difficulties) Order, 2004 as ultra vires, violative of Article 14 of the Constitution of India and quash the same.
For Petitioner : No appearance
O R D E R
The petitioner has filed this Writ Petition seeking to issue a writ of declaration declaring that the order passed by the first respondent namely The Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act
(Removal of Difficulties) Order, 2004 as ultra vires, violative of Article 14 of the Constitution of India and quash the same. 2.There is no appearance on behalf of the petitioner. 3.The Hon'ble Supreme Court in Mardia Chemicals Limited Versus Union of India and others etc., reported in 2004 4 SCC 311, has observed as follows:
"80.
Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under Section 13(4) of the Act have been taken, a mechanism has been provided under Section 17 of the Act to approach the Debts Recovery Tribunal. The above notes provisions are for the purpose of giving some reasonable protection to the borrower.
Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows:
1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under sub-section
(4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be communicated to the borrower. In connection with this conclusion we have already held a discussion in the earlier part of the Judgment. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under Section 17 of the Act, at that stage.
2. As already discussed earlier, on measures having been taken under subsection (4) of Section 13 and before
the date of sale/auction of the property it would be open for the borrower to file an appeal (petition) under Section 17 of the Act before the Debts Recovery Tribunal.
3. That the Tribunal in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose.
4. In view of the discussion already held in this behalf, we find that the requirement of deposit of 75% of the amount claimed before entertaining an appeal (petition) under Section 17 of the Act is an oppressive.
Onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down.
5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil Court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court.
81. In view of the discussion held in the judgment and the findings and directions contained in preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debts Recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of the dues declared as NPAs and better availability of capital liquidity and resources to help in growth of the economy of the country and welfare of the people in general which would subserve the public interest.
82. We, therefore subject to what is provided in para 80 above, uphold
the validity of the Act and its provisions except that of sub-section
(2) of Section 17 of the Act, which is declared as ultra vires Article 14 of the Constitution of India."
4. In the light of the same, nothing survives for adjudication in this Writ Petition. Hence, this Writ Petition stands dismissed. No costs. Consequently, the connected Miscellaneous Petitions are closed.
Sd/- Asst.Registrar (CS III ) /true copy/ Sub Asst. Registrar arr To
1. The Deputy Registrar of Co-operative Societies NCMS Building, Uthagamandalam, Nilgiris District.
2. The Special Officer, Nilgiris District Central Co-operative Bank Ltd., Charing Cross, Uthagamandalam, Nilgiris District.
+1cc to M/s.S.Sethuraman, Advocate in sr.no.52090 W.P.No.29061 of 2004 GP(CO) NR 01/09/2017