Madras High Court
Dr.G.Rajaramanan vs State Bank Of India on 27 June, 2023
WP Nos.796, 6418 and
17357 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27.06.2023
CORAM :
THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU
WP Nos.796, 6418 and 17357 of 2023
and WMP Nos.741, 16502, 16503, 6446 and 6447 of 2023
Dr.G.Rajaramanan .. Petitioner in
WPs.796 and
17357/2023
1. S.Deivanai
2. S.Vakisan .. Petitioners in
WP.6418/2023
-vs-
1. State Bank of India,
Rep. by its Authorized Officer,
Retail Assets Central Processing Centre,
M.R.C.Nagar, Chennai 600 004.
2. State Bank of India,
Rep. by its Authorized Officer,
Asset Recovery Management Branch,
No.44, Eldams Road, 1st Floor,
Teynampet, Chennai 600 018. .. Respondents in
WPs.796 and
17357/2023
1. The Authorized Officer/Assistant General
Manager, State Bank of India, RACPC,
No.50, AR Plaza, Mount Poonamallee
High Road, Iyyappanthangal, Chennai 600 056.
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WP Nos.796, 6418 and
17357 of 2023
2. The Regional Officer,
Reserve Bank of India,
Fort Glacis, Rajaji Salai,
Chennai 600 001. .. Respondents in
WP.6418/2023
Prayer: Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Certiorarified Mandamus - (i) WP.796/2023 - to
call for the records of the 2nd respondent herein in Ref.No.SBI/ARMB/
SARFAESI.2022-23/741 dt. 03.11.2022 issued by the 2nd respondent
herein and quash the same and further direct the respondent to
reclassify the Facility in the nature of Housing Loan Account
No.38155857285 and Suraksha Account No.38156519890 availed by
the petitioner from the respondent as "Regular" and desist from taking
any recovery action against the petitioner; (ii) WP.6418/2023 - to call
for the records of the respondent No.1. in issue of impugned notice
dated 14.12.2022 and quash the same and consequentially direct the
respondent No.1 to regularize the loan account of the petitioners as
per the moratorium granted on 25.06.2021; and (iii) WP.17357/2023 -
to call for the records of the 2nd respondent herein in Interest
Certificate dt.01.06.2023 issued by the 2nd respondent herein and
quash the same and further direct the respondent to adjust the
monthly EMI payments of Rs.4,30,000/- made by the petitioner from
the month of April 2022 towards Principal and Interest and to continue
to receive payment by way of ECS and adjust the same as monthly
EMI towards repayment of Principal and Interest and desist from
taking any recovery action against the petitioner.
For the Petitioner
in WPs.796 and
17357 of 2023 : Mrs.Hema Muralikrishnan
For the Petitioner
in WP.6418 of 2023 : Mr.S.Senthilnathan
For the Respondents
in WPs.796 and
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WP Nos.796, 6418 and
17357 of 2023
17357 of 2023 : Mr.K.Chandrasekaran
and Mr.B.Raghavalu Naidu
in WP.6418 of 2023 : Mr.M.L.Ganesh for R-1
: No appearance for R-2
*****
ORDER
(Order of the Court was made by The Hon'ble Chief Justice)
We have heard Mrs.Hema Muralikrishnan, learned counsel for the
petitioner in W.P.Nos.796 and 17357 of 2023 and Mr.S.Senthilnathan,
learned counsel for the petitioners in W.P.No.6418 of 2023 so also
Mr.K.Chandrasekaran, Mr.B.Raghavalu Naidu and Mr.M.L.Ganesh,
learned counsel for the respondents-Bank.
2. The petitioners assail the notice under Section 13(2) of the
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 (in short 'the SARFAESI Act') issued by
the bank.
3. The challenge to the notice is on the count that the petitioners
have not committed any default in repayment of their loan
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WP Nos.796, 6418 and
17357 of 2023
instalments, as such, their account could not have been classified as a
non-performing asset. The notice under Section 13(2) of the
SARFAESI Act also did not give any reason for classifying the account
of the petitioners as a non-performing asset. According to the learned
counsel for the petitioners, unless and until a default in payment of
instalments is committed, the account can never be declared as non-
performing asset, inter alia, the provisions of Section 13(2) of the
SARFAESI Act cannot be invoked.
4. According to the learned counsel for the respondents-bank, in
all these three matters, the promoter is one and the same and has
defrauded the bank. The amount has been siphoned off and the
account was declared as fraud account. The security has been over-
valued. The investigation is now with the Central Bureau of
Investigation (CBI).
5. According to the learned counsel for the petitioners, the
aspect of over-valuing the security or otherwise cannot be the subject
matter of issuing a notice under Section 13(2) nor can it be cause of
declaring the account as a non-performing asset.
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WP Nos.796, 6418 and
17357 of 2023
6. The respondents have relied upon the judgment of the Apex
Court in a case of KESHAVLAL KHEMCHAND AND SONS PVT. vs. UNION
OF INDIA AND OTHERS reported in (2015) 4 SCC 770. According to the
learned counsel for the petitioners, the said judgment will have to be
read in the context in which the same has been delivered. In the said
judgment, the constitutional validity of the amended definition of 'non-
performing asset' was the subject matter of challenge.
7. There cannot be any dispute with the proposition that the
judgments of this Court and the Apex Court cannot be read as Euclid's
Theorem and the judgment will have to be read in the context in which
it has been delivered.
8. Be that as it may, the petitioners have approached this Court
at the stage of notice issued under Section 13(2) of the SARFAESI Act.
The objection raised by the petitioners is rejected. Whether the
account of the petitioners is a fraud account, whether the security has
been over-valued and whether the promoter only has raised all the
finances and siphoned off the funds are matters which would require
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WP Nos.796, 6418 and
17357 of 2023
detailed enquiry. Moreover, the petitioners have an avenue open, as
yet no action under Section 13(4) of the SARFAESI Act has been
undertaken. Action under Section 13(4) of the SARFAESI Act would
only include symbolic possession and not physical possession of the
property. If action under Section 13(4) is initiated by the bank, the
petitioners would have remedy before the Debts Recovery Tribunal
(DRT) under Section 17 of the SARFAESI Act. In that event, all these
contentions can be raised by the petitioners.
9. In light of that, we are not inclined at present to entertain the
writ petitions. As and when the cause arises, the petitioners may
approach the DRT and in that event, all contentions raised in these
writ petitions are kept open for the petitioners to canvass.
10. In W.P.No.17357 of 2023, the grievance of the petitioner is
that pursuant to the interim orders passed in W.P.No.796 of 2023, the
instalments were deposited. However, the respondent bank has
appropriated the entire amount of instalments towards interest and not
in tune with the order passed by this Court.
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WP Nos.796, 6418 and
17357 of 2023
11. It is not disputed that the petitioner deposited the
instalments as per the orders of this Court. This Court directed the
petitioner to deposit the instalments as was regularly deposited. In
light of that, the bank is required to adjust the amount of deposit
which was under the interim orders of the Court as per the agreement
between the parties, that is, towards principal and interest till this
date.
12. With the aforesaid observations, the writ petitions stand
disposed of. There will be no order as to costs.
13. W.M.P.No.6446 of 2023 in W.P.No.6418 of 2023 filed
seeking to permit the petitioners to file a single writ petition stands
allowed.
All other connected miscellaneous petitions are closed.
(S.V.G., CJ.) (P.D.A., J.)
27.06.2023
Index : yes/no
Neutral Citation : Yes/No
sra
https://www.mhc.tn.gov.in/judis
WP Nos.796, 6418 and
17357 of 2023
THE HON'BLE CHIEF JUSTICE
AND
P.D.AUDIKESAVALU, J.
(sra)
To:
1. The Authorized Officer,
State Bank of India, Retail Assets Central
Processing Centre, M.R.C.Nagar, Chennai 600 004.
2. The Authorized Officer,
State Bank of India, Asset Recovery Management
Branch, No.44, Eldams Road, 1st Floor,
Teynampet, Chennai 600 018.
3. The Authorized Officer/Assistant General
Manager, State Bank of India, RACPC,
No.50, AR Plaza, Mount Poonamallee
High Road, Iyyappanthangal, Chennai 600 056.
4. The Regional Officer,
Reserve Bank of India,
Fort Glacis, Rajaji Salai, Chennai 600 001.
WP Nos.796, 6418 and
17357 of 2023
27.06.2023
https://www.mhc.tn.gov.in/judis
