SIDDH INDUSTRIES Vs. UNION BANK OF INDIA

JUDGEMENT

(1.) IN this petition under Article 226 of the Constitution of India petitioners have challenged demand notice dated 27. 11. 2002 (Annexure "p/5") issued by respondent No. 1 under the provisions of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity "the Act of 2002") and thereafter followed by notices for taking possession of the assets dated 3. 3. 2003, 10. 3. 2003, and 21. 4. 2003 (Annexures "p/7", "p/8" and "p. 9" ).

(2.) IT is not in dispute that the petitioner No. 1 is a proprietorship Firm who was granted total financial assistance of Rs. 143. 00 lacs by respondent Bank on 10. 4. 2000 under the heads of C. C. (HYP) 100. 00 lacs; Term Loan for Machinery 25. 50 lacs; and Term Loan for Building 17. 50 lacs. Petitioner Nos. 2 to 4 are guarantors to the said loan. Petitioners have deposited title-deeds of properties situated at Flat No. 104, Chandramani Apartment, Janki Nagar, Indore; Open Plot Survey Nos. 370, 371 and 372 (12,0000 sq. ft.) at Village Musakhedi, P. H. No. 26, Nemawar Road, Indore; Plot Survey Nos. 369 and 370 at Village Mysakhedi, P. H. No. 26, Nemawar Road, Indore; Factory Land and Building at Survey No. 374/2, Musakhedi, Indore; and hypothecation of Stock of Pulses. Petitioners have also created equitable mortgage thereon as security. It is also not in dispute that the cash credit facility was agreed to he given from time-to-time against the primary security of stock and book-debts. The petitioners had submitted last stock statement, according to which the value of stock was Rs. 266. 38 lacs as on 30. 9. 2002 and on an inspection by the branch officials of the respondent Bank on 7. 11. 2002 of the godowns, factory premises, stock of hypothecated goods was not found. It is also not in dispute that it is the allegation of the Bank that the aforesaid stock was either sold/removed without depositing its sale proceeds. It is also not in dispute that notices dated 27. 11. 2002 under Section 13 (2) of the Act, 2002 have been sent to the petitioners which are collectively marked as Annexure - "p/5" recalling the loan on the ground that the account of the petitioner has been classified as Non Performing Account (for brevity "npa") pursuant to default in making repayment of dues/interest of Rs. 1,18,37,548. 53. By Annexure-"p/6" on 14. 12. 2002 petitioners filed objections. Thereafter by notices dated 3. 3. 2003, 10. 2. 2003 and 21. 4. 2003 (Annexures "p/7", "p/8" and "p/ 9") the respondent Bank directed to take possession of the assets, against which the petitioners have filed this petition.

(3.) THE submission of the respondent Bank is that the petitioners account has become NPA and on inspection by the branch officials on 7. 11. 2002 of the godown and factory premises, stock of hypothecated goods was not found. It was further stated that the said hypothecated goods were either sold/removed without depositing its sale proceeds with the respondent Bank. It had also come to their knowledge that the petition has stopped dealing with the respondent Bank and has started depositing the money with other Banks. The petitioners has also closed its factory and has not deposited any money since November, 2002 and has given the complete details of the outstanding amount and denied all the allegations made in the petition and submitted that looking to the conduct of the petitioner, he is not entitled for any relief from the Court and the demand notices under Section 13 (4) of the Ordinance, 2002 has been issued legally and properly. Under Section 17 of the Act, 2002 an appeal is provided which is not availed, therefore, writ is not maintainable. Therefore, he prayed for the dismissal of the petition.