Jhar HC | A writ petition after issuance of notice under S. 13(4) of SARFAESI is not to be entertained; petitioner to approach Debt Recovery Tribunal

Jharkhand High Court: Sujit Narayan Prasad, J., dismissed the writ petition as a writ petition after issuance of notice under Section 13 (4) of the SARFAESI Act, 2002 is not to be entertained.

The brief facts of the case of the petitioner is that the petitioner has extended with the credit facilities of an amount of Rs 80 Lakhs, a cash credit of Rs 70 Lakhs and a bank guarantee facility of Rs 10 Lakhs. The said account having been declared to be a non-performing asset, therefore, a proceeding has been initiated by issuing a notice under Section 13(2) of the SARFAESI Act, 2002, subsequent thereto, a notice under Section 13(4) of the SARFAESI Act, has also been issued. In course of that stage, the respondent-Bank has entered into a settlement under One Time Settlement Scheme by settling the account. The petitioner after entering into the settlement had started making a payment but the terms and conditions of the One Time Settlement were not been complied with, therefore, the One Time Settlement Scheme was cancelled by the impugned order, against which, the present writ petition has been filed by the petitioner.

The Counsel for the petitioner relied upon the judgement of A-One Mega Mart (P) Ltd. v. HDFC Bank, 2012 SCC OnLine P&H 17328, and submitted that the writ petition may be entertained and appropriate direction by quashing the One Time Settlement may be issued.

The Counsel for the respondent submitted that the proceeding has been initiated under the Debt Recovery Act, 1993 and subsequently the notice under Section 13(2) has also been issued now it is at the stage of the proceeding under Section 13(4) of the Act, 2002.

The Court held that the there is no absolute bar in entertaining the writ petition under Article 226 of the Constitution of India but simultaneously in numerous judgements of the Supreme Court it has been laid down that a writ petition after issuance of notice under Section 13(4) of the Act, 2002 is not to be entertained. In this regard, reliance was placed upon the judgement of State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85. On the basis of views expressed by the Supreme Court, this Court is of the view that this writ petition is not fit to be entertained, accordingly, dismissed.[Ace Sales & Logistics v. H.D.F.C. Bank Ltd.,  2019 SCC OnLine Jhar 1136, decided on 20-08-2019]

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