Mohan Jute Mills Ltd. and Another vs Union Bank of India and Others

The Court : The petitioners in this art. 226 petition dated October 24, 2011 are questioning a decision dated July 14, 2011 (at p.58) of the authorised officer of Union Bank of India disposing of their objection dated July 8, 2011 to the authorised officer''s notice dated February 3, 2010 (at p.46) issued u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Case of the petitioners, as argued by their counsel, is this. In response to the Section 13(2) notice the petitioners submitted an exhaustive objection dated March 29, 2010 (at p.51). Keeping the objection pending the bank negotiated with the petitioners for an amicable settlement. After the settlement failed, the petitioners made a fresh representation dated July 8, 2011. Without disposing of their objection dated March 29, 2010 the authorised officer of the bank decided to take measures u/s 13(4) of the Act.

Case of the bank, as argued by its counsel, is as follows. After submitting the objection dated March 29, 2010 the petitioners entered into a settlement with the bank that if they failed to fulfil their commitment within the time mentioned in the settlement, then the bank would be free to proceed under the Act. By a letter dated June 29, 2011 the bank informed the petitioners that the one-time settlement proposal made by the petitioners was not acceptable. Then the petitioners submitted fresh representations and objections to the Section 13(2) notice, and by the decision dated July 14, 2011 such representations and objections were disposed of.

It is evident from the decision dated July 14, 2011 that thereby the authorised officer of the bank disposed of the petitioners'' representations and objections dated July 8, 2011 to the Section 13(2) notice. In view of the steps taken by the petitioners after submitting the objection dated March 29, 2010, I am unable to see how they can say that the objection remained pending even after they entered into a settlement with the bank.

After the settlement failed and the bank informed them about its inability to accept the one-time settlement proposal, the petitioners submitted a letter describing it as their representations and objections to the Section 13(2) notice. Such representations and objections have been duly considered and disposed of by the authorised officer of the bank who informed the petitioners that the bank would take measures u/s 13(4) of the Act.

It is, therefore, wrong to say that the bank has decided to take measures u/s 13(4) of the Act without disposing of the petitioners'' representations and objections to the Section 13(2) notice.

In view of the decisions in United Bank of India Vs. Satyawati Tondon and Others, and Kanaiyalal Lalchand Sachdev and Others Vs. State of Maharashtra and Others, the High Court is not to interfere in such a matter as this in exercise of power under art. 226.

If measures are taken u/s 13(4), then the petitioners'' remedy, if any, would be before the Debts Recovery Tribunal u/s 17 of the Act. Even non-disposal of their representations and objections by the authorised officer of the bank could not give them any cause of action to move the High Court under article 226, for a decision u/s 13(3A) is not to be judicially reviewed by the Writ Court that is not either to regulate the proceedings upto the Section 13(4) stage.

For these reasons, the petition is dismissed. No costs. Certified xerox.