SUSHIL KUMAR AGARWALLA Vs. STATE OF ASSAM

JUDGEMENT

(1.) The petitioners, while admitting atleast the liability of the re-payment of the principal amount of loan amounting to Rs. 1,17,06,398.69 payable to the respondent Bank, and disputing the interest charged to the tune of Rs. 35,51,556.95 have challenged the notice issued under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (in short SARFAES Act, 2002) on the following grounds: 1. The Act does not apply to the case as per provisions of Section 31 (i) of the Act, the security interest created being agricultural land. Not following the pre-requirement of dealing with the objection raised in respect of the impugned notice under Section 13 (2) of the Act. The respondent Bank could not have included the amount relating to interest in the demand made by the impugned notice, inasmuch as the Bakijai Officer of the Co-operative Societies has already held the same to be not recoverable. The Bank already having invoked the jurisdiction under Bengal Public Demands Recovery Act, 1913, cannot now take recourse to SARFAESI Act, 2002.

(2.) The basic facts are not in dispute. The petitioners applied for financial assistance to the respondent No. 2 Bank i.e. the Assam Co-operative Apex Bank Limited in order to facilitate expansion of its tea estates. According to the petitioners the Bank delayed the process of disbursement of the amount by about two years. The financial assistance sanctioned by the Bank was under the following heads. "a. Working Capital Assistance (hereinafter referred to as 'WCA' for short) amounting to Rs.95.70 Lakh bearing interest @ 14.75% per annum vide Sanction Letter No. ACAB/HO/ADV. TEA/CC/2002/3686-3689 dated 11.05.2002 against the loan proposal for season 2002-2003. b. Medium Term Loan (hereinafter referred to as' MTL' for short) amounting to RS. 50,47,315/- bearing interest @ 14.50% per annum vide sanction letter No. ACAB/HO/TEA/MT/2002/4047-60 dated 08.07.2002."

(3.) It is the case of the petitioners that due to the delay in disbursement of the promised loan, and owing to non-disbursement of the entire sanctioned loan, the petitioners suffered financial loss to the extent of Rs. 75,00,000/- in their business resulting in delay in re-payment of the installments towards liquidation of the loan. However, they have asserted that they have the honest intention to re-pay the loan.