SVPCL LIMITED Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) THIS Writ Petition is filed questioning the action of the 1 st respondent bank in seeking to take possession of the immovable properties of the petitioner company pursuant to the notice issued under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of 2002), (for short 'the SARFAESI Act'), and the notice of the Advocate Commissioner dated 21.03.2014 intimating that possession of the immovable properties of the petitioner at Vijayawada would be taken on 28.03.2014, as violative of the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'SICA').

(2.) THE petitioner was initially constituted as a partnership firm in the year 1992. It was later converted into a public limited company in the year 1999. While the petitioner's manufacturing activities were initially confined to Vijayawada, a new unit was set up by them at Hyderabad in the year 1999 -2000; and, thereafter, a third unit was set up by them in the Visakhapatnam SEZ area. The overseas branch of the 1 st respondent Bank had sanctioned a term loan of Rs.12.44 crores to the petitioner in the year 2006. The sanctioned limits of the term loan was later enhanced to Rs.19.06 crores. As security for the said loan, the petitioner company created an equitable mortgage over their immovable properties. The loan amount of the petitioner became a non -performing asset ("NPA" for short).

(3.) THE 1 st respondent bank initiated proceedings, and issued notice dated 27.08.2009 under Section 13(2) of the SARFAESI Act, demanding payment of Rs.19,07,21,161/ -. A similar notice dated 03.11.2010 was issued through the Stressed Asset Management branch of the respondent bank demanding payment of Rs.22,38,78,147/ -. As the said amount was not paid, the respondent bank instituted proceedings before the Debt Recovery Tribunal (for short the "DRT") under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the "DRT Act") by filing O.A.No.252 of 2010 for recovery of Rs.21,96,37,830.53 ps. They also initiated action, under Section 13(4) of the SARFAESI Act, by issuing notices dated 18.02.2011 and 19.02.2011. Aggrieved thereby the petitioner filed an application under Section 17 of the SARFAESI Act, in S.A.No.135 of 2011, before the DRT, Hyderabad. They filed I.A.No.349 of 2011 therein seeking an interim order to restrain the respondent -bank from proceeding further. The said I.A. was dismissed on 10.06.2011. Aggrieved thereby, the petitioner preferred an appeal to the Debts Recovery Appellate Tribunal, Chennai (DRAT), along with MA (SA) No.235 of 2011 seeking stay of operation of the order of the DRT dated 10.06.2011, and a further order restraining the authorised officer of the respondent -bank from proceeding with recovery. The DRAT passed orders, in MA (SA) No.235 of 2011 dated 17.06.2011, staying the operation of the order passed by DRT in I.A.No.349 of 2011. The authorised officer was also restrained from proceeding further under the provisions of the SARFAESI Act.