NIRMAN INDUSTRIES LIMITED Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) It is with the following prayers that the petitioners have filed the present petition invoking writ jurisdiction of this Court under Article 226 of the Constitution,

(2.) Petitioner No.1 is a registered company under the provisions of the Companies Act, 1956. It is the case of the petitioners that they applied to the respondentState Bank of India for restructuring of the term loan by letter dated 01.01.2014. It was stated that because of various factors like delayed commission of the project, nonavailability of power supply etc., a request had to be made to convert the cash credit limit of Rs.8 crores of petitioner No.1 into working capital term loan for which it was agreed to pay additional installments. The same was approved by the Bank as per communication dated 10.01.2014. It appears that thereafter, at the request of the first petitioner, the working capital limit was renewed. It was averred that there was a fire in which the stock and other assets were seriously damaged. The Bank restructured the financial facility. A revival plan was requested to the Bank. The account of the Bank was however finally converted into NonPerforming Asset (NPA) on 16.04.2015 as there were unpaid dues.

(3.) The Bank initiated the action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2002 (SARFAESI Act). Notice under Section 13(2) dated 10.07.2015 was issued whereunder it was stated by the Bank that a sum of Rs.59,10,30,925.64in words Rupees Fifty Nine Crores Ten Lacs Thirty Thousand Nine Hundred Twenty Five and Sixty Four Paiseincluding the penal interest as on 10.07.2015 was due and payable. It appears that the petitioners made a representation under Section 13(3)(a) of the Act. It is the case of the petitioners that the Bank remained silent and proposed to initiate action under Section 13(4) of the Act.