Court No. - 35
Case :- WRIT - C No. - 18990 of 2019 Petitioner :- M/S Kay Em Copper Private Limited Respondent :- Branch Manager S.B.I. Sme Branch 234 And Another Counsel for Petitioner :- Rohan Gupta,Dharmendra Singh Hon'ble Bharati Sapru,J. Hon'ble Vivek Varma,J.
Heard Sri Shivam Shukla, Advocate holding brief of Sri Rohan Gupta, learned Counsel for the petitioner and Sri Satish Chaturvedi, learned Counsel for the respondent-Bank.
This petition has been filed by the petitioner challenging the arbitrary action of the Bank in declaring the petitioner Non- Performing Asset (In short 'NPA') in contravention of the provisions of Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (In short "SARFAESI Act"). For ready reference Section 13 (2) of the SARFAESI Act is quoted hereunder:-
"(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4)."
The requirement under the said Section is that any objection against the declaration of any party as 'NPA' has to be decided by the secured creditors itself. In this case it is apparent from a reading of the order dated 15.02.2019 (Annexure No.8 to the writ petition) that the order has been passed by a legal firm, which is not contemplated under the SARFAESI Act. The secured creditor is defined under the Act itself and it does not include a legal firm. The definition of the secured creditor is quoted hereunder:-
"secured creditor" means any bank or financial institution or any consortium or group of banks or financial institutions and includes-
(i) debenture trustee appointed by any bank or financial institution; or
(ii) securitisation company or reconstruction company, whether acting such or managing a trust set up by such securitisation company or reconstruction company for the securitisation or reconstruction, as the case may be; or]
(iii) any other trustee holding securities on behalf of a bank or financial institution, in whose favour security interest is created for due repayment by any borrower of any financial assistance ;"
The order dated 15.02.2019 passed by the legal firm, respondent no.2 is, therefore, set aside. The respondent-Bank is directed to decide the objection of the petitioner afresh in accordance with the regulations. They may do so within a period of 15 days from today.
For a period of 15 days from today no coercive or adverse action will be taken against the petitioner.
The Writ Petition is disposed of as above. No costs.
Copy of this order be given to Sri Satish Chaturvedi, learned Counsel for the respondent-Bank today itself for communication and compliance.
Order Date :- 31.5.2019 S.P.