RAJA ASSOCIATES Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner No. 1 herein is a registered partnership firm who took over the running business of wholesale distribution of pharmaceuticals. The earlier owner of the said business had banking transactions with karnataka Bank Limited and on taking over the said business, the petitioner approached the respondents-bank to take over the existing liability of the said wholesale pharmaceuticals business from Karnataka Bank Limited. Accordingly, the respondents took over the liabilities by sanctioning to petitioner No. 1 the facility of Rs. 35,00,000/- cash credit facility in two different accounts against hypothecation of stock in trade and on assignment of book debts on certain terms and conditions. The petitioner alleges that when this was the position, there was a fire accident in the godown belonging to the petitioner on 4-7-2003 and according to the petitioner since the insurance policy stood in the name of the bank, the bank should have sought for the insurance claim and the same should have been credited to their account. Since the respondents have failed to do so, the petitioner has taken steps in this regard and the matter is pending before the Karnataka State Consumer dispute Redressal Commission.

(2.) THE grievance of the petitioner at this juncture is however with regard to the notice issued by the respondents under Section 13 (2)of the Securitisation and Reconstruction of financial Assets and Enforcement of security Interest Act, 2002 (hereinafter referred to as the 'securitisation Act' ). The petitioner was before this Court with the said grievance at the first instance'in W. P. Nos. 33886-33887/2004. With regard to the fire accident and the manner of insurance claim, this Court has already rejected the contention put forth by the petitioner and as such the reasons assigned by the respondents in such of those paragraphs to reject the contention of the petitioner on that aspect in their reply dated 25-5-2005 are justified. However, this Court by its order dated 24-2-2005 has not expressed its opinion with regard to the other contentions which had been raised regarding the improper manner in which the petitioner's account was treated as Non-Performing Asset (hereinafter referred to as the 'npa' ). But this Court had held that it would be open for the petitioner to raise the said issue either by way of representation or objection to the notice under Section 13 (2) of the Act, as the amended provision of the Act as contained in Section 13 (3a)of the Act had come into force, the same being inserted after the judgment of the Hon'ble supreme Court. In this regard, the decision in the case of Mardia Chemicals Ltd. etc. etc. v. Union of India and others etc. etc. , reported in AIR 2004 SC 2371 was also noticed by this Court. Ultimately while disposing of the writ petition, such liberty was granted to the petitioner to file detailed representation/objection to the notice under Section 13 (2) of the Securitisation Act and the respondents were directed to consider the representation in the light of the aforesaid judgment of the hon'ble Supreme Court and pass appropriate orders in accordance with law. The petitioner has thereafter filed a detailed objection/representation dated 10-3-2005. The respondents have disposed of the representation by their communication dated 25-5-2005. The petitioner claiming to be aggrieved by the rejection of the objection/representation dated 10-3-2005 is once again before this Court in this petition.

(3.) I have heard Sri. X. M. Joseph, learned counsel for the petitioners and Sri. T. N. Raghupathy, learned counsel appearing on behalf of M/s. Rao and Rao Associates for the respondents.