RAVIS EXPORTS Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioners have been declared as wilful defaulters by a Bank based on a Master Circular issued by the Reserve Bank of India. Challenging the validity of such a declaration, petitioners have invoked the extraordinary jurisdiction under Article 226 of the Constitution of India.

(2.) The first petitioner - a proprietory concern, had availed a credit facility of Rs.14.50 crores from the 4th respondent for the purpose of its cashew processing business. Petitioners 2 to 4 mortgaged several valuable properties for availing the said credit facility and thus became the guarantors to the credit facility availed by the 1st petitioner.

(3.) According to the petitioners, cashew industries in the State of Kerala are facing severe crisis and the 1st petitioner also fell into dire straits due to which it defaulted in repayment of the loan. The floods that inundated the State in the year 2018 also contributed to the default, resulting finally in the account of the 1st petitioner being declared as non-performing. Steps were therefore initiated by the bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act').