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Judgment
The present writ petition has been preferred primarily praying for the following reliefs:
“b) Appropriate order declaring that the respondent nos. 1 to 5 have no jurisdiction, right or authority to exercise any right under Section 13(4) of
the SARFAESI Act, 2002 in view of the non-agreement of the respondent nos. 6 and 7 to the exercise of such rights by the respondent nos. 1 to 5.
c) A Writ of or in the nature of mandamus and/ororder or orders and /or direction or directions of like nature commanding the Respondents to cancel,
rescind and revoke the purported notice under Section 13(2) of the SARFAESI Act, 2002 being No. SAMB/BR/2060 dated 21st February, 2018 being
Annexure “P-2†hereto and all other steps and/or actions under the SARFAESI Act, 2002 in respect of the loan accounts of the petitioners.
d) A Writ of or in the nature of mandamus and/ororder or orders and/or direction or directions of like nature commanding the Respondents to forebear
from taking any action or further action under Section 13(4) of the SARFAESI Act, 2002 against the petitioners or anyone else in respect of the loan
accounts of the petitioners.â€
The petitioner no. 1 availed credit facilities by way of financial assistance from a consortium of lenders comprising of the respondent no. 1 as the lead
bank and the respondent nos. 6 and 7 as lender-members. The particulars of credit facilities sanctioned in favour of the petitioner no.1 have been
detailed in paragraph 9 of the writ petition. Owing to various breaches on the part of the banks, the petitioner no. 1 filed a suit being C.S. No.188 of
2017 against the respondents before this Court, inter alia, praying for a decree of Rs.117.59 crores. The said suit is still pending and in the midst
thereof, the respondent no. 1 issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (in short, SARFAESI Act) on 23rd February, 2018 claiming repayment of an amount of Rs.42,27,84,545.01 (Rupees forty
two crores twenty seven lakhs eighty four thousand five hundred forty-five and paisa one) only.
The petitioners submitted a reply to the said notice on 17th March, 2018. The respondent no.1 considered the said reply and issued a memo dated 29th
March, 2018. In the last paragraph of the said memo it has been stated that failing payment as mentioned in the 13(2) notice within 60 days of time as
stipulated in the said notice, the bank shall be constrained to proceed further as per the SARFAESI Act and Rules framed thereunder.
Drawing the attention of this Court to the provisions of Section 13(9) of the said SARFAESI Act, Mr. Kapur, learned senior Counsel appearing for the
petitioners submits that in case of financing of a financial asset by more than one secured creditors, no secured creditor shall be entitled to exercise
any or all the rights conferred on him under or pursuant to subsection (4) unless exercise of such right is agreed upon by the secured creditors
representing not less than 60 per cent in value of the amount outstanding as on a record date. The respondent no.1 represents 54.52 percentum in
value of the outstanding amount and the respondent nos.6 and 7 in aggregate represent the value of the remaining 45.48 percentum. In view thereof
and in the absence of any agreement among the respondent no.1 and the respondent nos. 6 and 7, the respondent no.1 cannot take any measure under
Section 13(4) of the SARFAESI Act.
He further submits that the respondent no.1 is intending to take measures referred to in Section 13(4) of the SARFAESI Act without following the
provisions of Section 13(9) and in the absence of the consent of the other members of the consortium, as would be explicit from the contents of the
reply given by the Bank on 29th March, 2018 wherein it has inter alia been stated “Further this is to be noted the other member banks have also
executed certain documents as being a consortium member with our bank and we are free to take necessary action in case of default made by the
borrower in respect of our accounts without any approval from the other member banks."" The respondent no.1 has even not disclosed the particulars
of the documents as stated to have been executed by the other banks. The threat to take recourse to the measures under Section 13(4) of the
SARFAESI Act is thus imminent.
Mr. Kapur further submits that financial assistance as provided by the respondent nos. 6 and 7 are being regularly serviced and they have not agreed
with the respondent no.1 in exercising right under Section 13(4) of the SARFAESI Act Mr. Paul, learned advocate appearing for the respondent no.1
disputes the contention of the petitioners and submits that no measure referred to in Section 13(4) of the SARFAESI Act has been taken by the
respondent no.1. The said respondent had issued a notice under Section 13(2) on 23rd February, 2018 asking the petitioners to pay an amount of
Rs.42,27,84,545.01 within a period of 60 days from the date of the notice. Prior to expiry of the said period, a reply was submitted by the petitioners on
17th March, 2018. The same has been considered and a memo has been issued by the bank prior to expiry of a period of 15 days subsequent thereto
in terms of the provisions of the SARFAESI Act.
According to Mr. Paul in the event any measure is taken in terms of Section 13(4) of the SARFAESI Act the petitioners may avail the other remedies
as provided for under the SARFAESI Act and the writ petition is not entertainable. For deciding the dispute reference to the following provisions of
the SARFAESI Act would be necessary:
“Section 13(3A): If, on receipt of the notice under Sub-section (2), the borrower makes any representation or raises any objection, the secured
creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not
acceptable or tenable, he shall communicate [within fifteen days] of receipt of such representation or objection the reasons for non-acceptance of the
representation or objection to the borrower:
Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any
right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A.â€
“Section 13(9): In the case of financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured
creditors, no secured creditor shall be entitled to exercise any or all of the rights conferred on him under or pursuant to sub-section (4) unless exercise
of such right is agreed upon by the secured creditors representing not less than [sixty per cent.] in value of the amount outstanding as on a record date
and such action shall be binding on all the secured creditors …â€
“Section 17. Right to appeal : (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13
taken by the secured creditor or his authorised officer under this Chapter, [may make an application along with such fee, as may be prescribed] to the
Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken …â€
 Indisputably the respondent no. 1 has not taken any measure referred to in Section 13(4) of the SARFAESI Act. By the memo dated 29th March,
2018 the respondent No. 1 has given a reply to the representation submitted by the petitioners in response to the notice under Section 13(2). It is
categorically provided under Section 17 that any person aggrieved by any of the measures referred to in sub-Section (4) of Section 13 can file an
application under the said Section 17. In view thereof and as the stage of Section 13(9) is yet to arrive, question of any decision on the issue as to
whether at all the respondent nos.6 and 7 have agreed towards exercise of the rights conferred pursuant to Section 13(4) does not require
consideration at this stage.
By whatever manner the secured creditor obtains possession of a secured asset is always a measure against which a remedy under section 17 is
available. In the event the respondent no.1 takes recourse to any measure under Section 13(4) without following the provisions of Section 13(9),
remedy under Section17 would be available to the petitioners. For the reasons discussed above, this Court is unable to grant the reliefs as prayed for
by the petitioners and the writ petition is, accordingly, dismissed. There shall, however, be no order as to costs. Urgent photostat certified copy of this
order, if applied for, be given to the learned advocates for the parties upon compliance of all necessary formalities.