DAUJI FARMS LIMITED Vs. DENA BANK

JUDGEMENT

(1.) BY this petition, the petitioners seek to challenge the validity and legality of the notice dated 28-7-2008 (Annex-ure-P/4) under Section 13 (2) of the securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest act, 2002 (for short "the SARFAESI act" ). Further challenge is to the reply dated 10-10-2006 (Annexure-P/6) to the legal notice of the petitioners and intimation-cum-letter demanding possession of securities dated 23-10-2006 (Annexure-P/9 ).

(2.) THE indisputable facts, in nutshell, as projected by the petitioners, are that the petitioner No. 1 is a public limited company, engaged in the business of milling, sorting and trading of rice and related products. Petitioners Nos. 2 and 3 are the Directors of the petitioner No. 1. According to the petitioners, the petitioner No. 1 was allegedly given financial assets in the shape of packing credit hypothecation limit, foreign bill purchase limit, term loan and foreign letter of credit limit. It was enhanced over the period of time. On 17-7-1997 the petitioners have credited mortgage of their immovable properties situated at Tilda and village telibandha, District Raipur. For the alleged failure on the part of the petitioners to pay the aforesaid credit facilities, interest and other monies to the Bank, the petitioners were classified as Non Performing Asset (NPA ). The respondent No. 1 accordingly issued a notice dated 24-2-2005 (Annexure-P/l) under Section 13 (2) of the SARFAESI act.

(3.) THE petitioners submitted their reply/ representation dated 13-4-2005 (Annexure-P/2) to the above-stated notice issued by the respondents. The said reply was neither considered nor decided. In the meantime, the respondents initiated a recovery proceeding by filing original application No. 94/2005 before the Debts Recovery Tribunal, jabalpur (for short "the DRT"), which is pending consideration and adjudication. The respondents issued a second demand notice dated 28-7-2006 (Annexufe-P/4) under the provisions of Section 13 (2) of the sarfaesi Act. The petitioners submitted their reply to the said notice On 4-10-2006 (Annexure-P/5) raising an objection that two parallel proceedings cannot be initiated against the petitioners one before the DRT, which is pending consideration in original application No. 94/2005 and secondly under the provisions of Section 13 of the sarfaesi Act. Thus, the subsequent notice dated 28-7-2006 was bad in law.