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Debt Recovery – SARFAESI – Declaring Account as NPA - Composite notice - defaulter - sec 13

JHARKHAND HIGH COURT 
(SHREE CHANDRASHEKHAR, J.) 

PARITRAN TRUST, JHARKHAND  Petitioner 
VERSUS 
PUNJAB NATIONAL BANK, DELHI AND OTHERS Respondents 

W.P. (C) No. 3710 of 2012-Decided on 14-10-2014.

(A) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Sections 13 (2), 13 (3-A) – Declaring account as NPA - Recovery of debt – Composite notice - There is no prohibition in Section 13(2) of the Act against issuing a composite order both declaring the account of the borrower NPA and requiring the borrower to discharge its liability simultaneously. (Para 11) 

(B) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Sections 13 (2), 13 (3-A) – Declaring account as NPA - Recovery of debt – Principles of natural justice - Nowhere in the representation dated 21-1-2012, the petitioner-Trust has disputed the calculation nor has it claimed its account being declared NPA as arbitrary, illegal or defective. Mere submission of a representation cannot create a bar against taking action in accordance with law by the secured creditor - Do not find any violation of the principles of natural justice in declaring the petitioner's account as NPA. (Paras 12 and 13) 

(C) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Sections 13 (2), 13 (3-A) – Declaring account as NPA - Recovery of debt – Proposal of the borrower for raising additional unsecured loan was approved by all the respondent-Banks - PetitionerTrust did not fulfill the condition contained in letter dated 14-12-2010 - In-spite of opportunities granted to the petitioner, it failed to regularize its account and discharge its loan liability - Do not find any arbitrariness, illegality or irregularity in rejecting the representation dated 21-1-2012 of the petitioner or in letter dated 9-12-2011 whereby notice under Section 13(2) of the SARFAESI Act, 2002 was issued by the respondent-Banks.
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