SARASWAT COOPERATIVE BANK LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) These proceedings have been instituted by the Saraswat Cooperative Bank Limited seeking directions to the Collector and District Magistrate, Sangli, to provide administrative assistance on an expeditious basis under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("Securitisation Act, 2002") for taking possession of the secured assets more particularly set out in Exhibit "A" to the Petition. The grievance of the Petitioner is that six applications are pending before the Collector, some of them for several years and despite this, the Collector has not taken expeditious steps under Section 14. The Petitioner addressed a letter dated 12 May 2010 to the Second Respondent and on 16 November 2010 to the Divisional Commissioner. On 23 February 2011 the Collector, the Second Respondent was directed by the Divisional Commissioner, Pune to take appropriate action inspite of which no action, it is stated, has been taken. As a result, according to the Petitioner, the recovery of a large amount of more than Rs.270.75 lacs due to the Bank has been held up. It has been stated that the Deputy General Manager, Sangli Zone, personally met the Second Respondent when the Second Respondent orally declined to render administrative assistance as required. According to the Petitioner, the Second Respondent is not following any procedure known to law in disposing of applications under Section 14. No dates are fixed for the attendance of Bank officers and no communication is furnished regarding the status of the applications. On many occasions, the defaulters were allowed to intervene and their applications are entertained. In several cases, the proceedings are found to be missing and no information could be provided by the staff of the Second Respondent. In these circumstances, the Bank has been constrained to move this Court under Article 226 of the Constitution.

(2.) On 20 July 2011, this Court, after considering the record, was prima facie of the view that the conduct of the Second Respondent was in clear breach and disregard of the law laid down by this Court. The Court observed that the Second Respondent is duty bound to act in accordance with the letter and spirit of the legislation enacted by Parliament under Section 14 of the Securitisation Act, 2002. On the request of the learned AGP an adjournment was granted to enable the First and Second Respondents to file their replies.

(3.) A reply has been filed by the Residential Naib Tahsildar for and on behalf of the Collector. In the reply, an attempt has been made to deal with each one of the six applications which have been filed by the Petitioner before the Collector. The first application in respect of a borrower was filed on 26 May 2007. The narration of events by the Collector shows that the application was heard in 200708 and on 13 May 2008, the borrower agreed to repay the loan. Time was accordingly granted at the instance of the Bank. The Bank, by its letter dated 26 October 2010, sought possession of the secured assets as the amount was not repaid. Despite this letter of the Bank, it would appear that it was only six months later on 30 April 2011 that the Collector directed the Tahsildar to take possession of the secured assets. Absolutely no explanation is forthcoming as to why nearly six months had to elapse before the Collector took action under Section 14.