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Judgment
Jayant Patel, J.—The petitioner has preferred the present petition for declaring that the action of the respondents in taking over the possession of the secured assets on 4.9.2009 as illegal, null and void and without authority of law and it is also prayed by the petitioner to direct the respondents to restore the possession to the petitioner of the secured assets, which are taken over by the respondents as per the notice dated 4.9.2009.
Rule. Mr. Nanavati, learned Counsel for the respondents waives service of notice of Rule.
Heard Mr. Shah, learned Counsel appearing with Mr. Mehta, learned Counsel for the petitioner and Mr. Kamal Trivedi, learned Sr. Counsel appearing with Mr. Nanavati, learned Counsel for the respondents.
It appears that the basis of the present petition by the petitioner is that the notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ''Securitisation Act'') was issued on 28.1.2004 by respondent No. 1 and it is the case of the petitioner that the petitioner had submitted objections to the said notice vide letter dated 23.3.2004 and in spite of the such objections, without taking any decision and communicating such decision to the petitioner the respondents have taken action u/s 13(4) of the Securitisation Act on 4.9.2009 by issuing notice dated 4.9.2009 and the symbolic possession is stated to have been taken over on 8.9.2009 and it is under these circumstances the present petition.
The learned Counsel appearing for the respondents is unable to dispute the factum that the objections were filed by the petitioner and no decision is taken or communicated to the petitioner in response thereto.
Under these circumstances, if the legal position is considered as held by the Apex Court in the case of Mardia Chemicals Ltd. Vs. Union of India (UOI) and Others Etc. Etc., read with the requirements of Section 13(3A) of the Act inserted by the legislature subsequently and also the observations made by the Division Bench of this Court in the case of Kirandevi Bansal v. D.G.M., Small Industries Development Bank of India, reported in AIR 2009 GUJ 100, it appears that even if the provisions for consideration of the objections are read as directory, so far as the time limit is concerned, but it is mandatory for consideration of the objections and communicating the decision to the petitioner - borrower. In the present case it is an admitted position that no decision is taken prior to the action u/s 13(4) of the Securitisation Act, nor communicated to the petitioner by the respondents.
The learned Counsel appearing for the respondents did contend that as there were lot of correspondences for negotiating the repayment of the loan between the petitioner and the respondent Bank, the decision was not taken. He submitted that, in any case, now the decision is taken on 3rd October, 2009 and communicated to the petitioner. Therefore, it was contended that the requirement of the statute has been complied with.
I am afraid such contention can be accepted. The reason being that merely because negotiations were going on is no valid ground for dispensation of the requirement to take decision and to communicate such decision upon the objections raised to the notice u/s 13(2) of the Securitisation Act. Further, as per the Scheme of the Securitisation Act the decision and the communication thereof by the Bank has to precede the action u/s 13(4) of the Securitisation Act and not thereafter. Therefore, the ground that subsequently the decision is taken and communicated after the action u/s 13(4) cannot be accepted, nor can be termed as compliance to the statute.
In view of the aforesaid, the action by the respondent Bank for taking symbolic possession cannot be sustained and deserves to be set aside.
It was contended by the learned Counsel for the petitioner that the petitioner would submit the objections once again to the respondent Bank within a period of 60 days from today in response to the notice dated 28.1.2004 issued u/s 13(2) of the Act and the respondent Bank may be directed to consider the same and till then, either the property may be restored to the petitioner or in alternative the appropriate orders may be passed, protecting the interest of the petitioner since the action was per se illegal or void and the further complications may arise as if the action taken u/s 13(4) of the Securitisation Act.
Whereas, it was submitted by the learned Counsel for the respondent Bank that huge amount is outstanding and the Bank has to recover the same. Therefore, the mandatory order may not be passed for restoration of the possession.
As such, the so-called action of taking over the possession is a symbolic possession and the property is an open piece of land. Therefore, if the status of the property is allowed to be maintained as it is, no prejudice would be caused, because even after the notice u/s 13(2) of the Securitisation Act there is prohibition to transfer or alienate the property by the borrower, over which the security interest is created.
Hence, the following orders:
(a) The impugned action of taking symbolic possession by respondent No. 1 u/s 13(4) of the Securitisation Act on 8.9.2009 is quashed and set aside. It is further directed that the notice u/s 13(2) of the Securitisation Act dated 28.1.2004 may be replied by the petitioner afresh within 60 days from today.
(b) The respondent No. 1 Bank shall consider the reply of the petitioner in its Banking Wisdom afresh and shall take appropriate decision and such decision shall be communicated to the petitioner, not, in any case, beyond the period of one month from the date of receipt of such objections. Until the aforesaid exercise is completed, the status-quo qua possession of the property shall be maintained by both the sides.
The petition is allowed to the aforesaid extent. Rule made absolute accordingly.