JEETSTEX ENGINEERING LTD Vs. VIJAYA BANK

JUDGEMENT

(1.) AS both the writ petitions relate to the same subject, they are taken up together for disposal by this common order. Writ Petition No.39545 of 2005 is filed by the principal borrower and guarantor questioning the notice issued under Section 13(4) of the Securitisation and Reconstruction of Financial ASsets and Enforcement of Security Interest Act, 2002 (for short, "the SARFAESI Act") and the consequential letter of the respondent bank directing the petitioners to repay the entire amount in a period of 30 days from the date of that letter, failing which the property would be sold and the amount would be adjusted towards the balance outstanding in M/s Jeetstex Engineering Limited account. Certain credit facilities were extended by the respondent bank in favour of M/s Jeetstex Engineering Limited, for which one G.Thiruvenkatasamy stood as guarantor. AS the said G.Thiruvenkatasamy expired pending disposal of the writ petition, his adopted son by name S.Karthikeyan was substituted by the order dated 4.4.2007 in M.P.No.1 of 2007 in Rev.SR.5522 of 2007. Writ Petition No.1810 of 2011 is filed by the guarantor by name S.Karthikeyan challenging the order of the Appellate Authority for Industrial and Financial Reconstruction dated 24.9.2007.

(2.) FOR the disposal of both the writ petitions, we are not elaborately referring to the facts put forth in the affidavits filed in support of the writ petitions, except to the limited extent which we are going to refer. It is the contention of S.Karthikeyan that the company by name M/s Jeetstex Engineering Limited went before the Board for Industrial and Financial Reconstruction (BIFR) and the matter was settled, as the company offered one time settlement with the bank for payment of a sum of Rs.75 lakhs towards the full and final settlement and that was recorded by the BIFR and consequently the BIFR discharged the principal borrower and guarantor from all liabilities after such payment. When the matter stood before the BIFR and an operating agency was also appointed, the respondent bank ought not to have proceeded under the SARFAESI Act by issuance of notice under Section 13(2) followed by the possession notice under Section 13(4) and to that extent, the possession notice should be set aside. It is the further grievance of the petitioners that after the orders of BIFR, the matter was taken on appeal to the Appellate Authority for Industrial and Financial Reconstruction (AAIFR). Though certain legal points have been raised, those points have not been considered and the AAIFR has only disposed of the appeal by order dated 24.9.2007 in the following manner:

(3.) WE have carefully considered the above submissions. As far as W.P.No.39545 of 2005 is concerned, it questions only the possession notice issued by the respondent bank under Section 13(4) of the SARFAESI Act. Whether such notice could be issued or not in view of the pendency of the proceedings before the BiFR that was referred during November, 1999 can also be a matter that can be taken into consideration by the Debts Recovery Tribunal while deciding the challenge to the possession notice. In that view of the matter, we are not inclined to accept the submissions of Mr.Srinath Sridevan, learned counsel for the petitioners and accordingly, W.P.No.39545 of 2005 is dismissed.