Kiran Global Chems Limited vs Assistant General Manager

Sanjib Banerjee, CJ

The petitioner has obtained credit facilities from the State Bank of India against certain securities which have been furnished. The grievance of the petitioner is that despite the State Bank floating a scheme under which defaulting borrowers could make a one-time payment and the disputes would stand resolved, the petitioner has not been allowed to avail of the benefit. In the meantime, it appears that the respondent bank has resorted to measures under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

There are several impediments in the exercise of jurisdiction in favour of the petitioner. For one, the secured creditor has proceeded under the said Act of 2002 and, if the petitioner is aggrieved thereby, the remedy of the petitioner is by approaching the appropriate Debts Recovery Tribunal having jurisdiction under Section 17 of the Act. Ordinarily, Debts Recovery Tribunals require a substantial deposit to be made before a borrower is heard. It is such deposit that the petitioner seeks to dodge by invoking the extraordinary jurisdiction under Article 226 of the Constitution.

At any rate, since the settlement was a scheme which was formulated by the respondent bank itself and not a statutory scheme or a scheme that had been promulgated by the Reserve Bank of India, it was open to State Bank to not extend the same on certain conditions not being met. The State Bank has indicated the reasons for the scheme not to be applicable to the petitioner and the conditions which form an integral part of the scheme may not be justiciable.

Since there is an efficacious remedy available to the petitioner under the scheme of the Act of 2002, this petition is not permitted to be pursued. In any event, the several disputes that arise on facts cannot be conveniently addressed on affidavit evidence in summary proceedings.

Accordingly, W.P.No.1296 of 2021 is disposed of by leaving the petitioner free to raise whatever the grounds that may be available to the petitioner before the appropriate Debts Recovery Tribunal in accordance with law. It will be open to the petitioner to seek exclusion of the period spent in this Court in the event the question of limitation arises before the Debts Recovery Tribunal. However, as to whether such time should be excluded or not, is entirely left to the discretion of the Debts Recovery Tribunal.

There will be no order as to costs. Consequently, W.M.P.No.1440 of 2021 is closed.