NIK-NISH RETAIL PVT LTD Vs. UNION BANK

JUDGEMENT

(1.) Issues of fact and law in these three writ petitions and connected applications being common, they were heard together and shall stand disposed of by this common judgment and order.

(2.) The first petitioner in W.P. 4 of 2010 (hereafter the borrower) obtained credit facilities sanctioned by the respondent no.1/bank (hereafter the bank). Properties of the respondent nos. 3 (M/s. Bansilal Credit Pvt. Ltd.) and 4 (M/s. Akhil Orchards Pvt. Ltd.), who are the petitioners in W.P. 6 of 2010 and W.P. 3 of 2010 respectively were mortgaged by deposit of title deeds in favour of the bank. The borrower having failed and neglected to repay its debt to the bank, its cash credit account was classified as 'non-performing asset' and a demand notice dated September 9, 2009 in terms of Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security and Interest Act, 2002 (hereafter the Act) was issued by the authorized officer of the bank. The borrower was called upon to pay a total sum of Rs. 10,28,74,036.24 within 60 days, failing which the bank would have no other option but to enforce the securities created in its favour as indicated therein.

(3.) The borrower as well as Bansilal and Akhil neither cleared their liability nor made any representation countering the demand notice; instead, the borrower approached the bank with a request to operate a current account maintained by it by retaining 20% of the deposits and permitting withdrawal of the balance as per its requirement. The bank by its letter dated September 16, 2009 permitted operation of the current account, as requested by the borrower, and informed it that the retained amount would be transferred to the cash credit account. In pursuance of such arrangement, Rs.45,000/-, Rs. 20,000/- and Rs. 10,000/- were transferred to the cash credit account. No effort worth the name was, however, made by the borrower to clear its liability in full in response to the demand notice and a staggering figure in excess of Rs. 9.5 crore remained unpaid. The bank having waited for 60 days to expire from date of issuance of the demand notice informed the borrower as well as Bansilal and Akhil of its intention to enforce the securities by taking possession of the same for recovery of the secured debt.