VARUN STEELS Vs. CANARA BANK AND ANR.

JUDGEMENT

(1.) THIS writ petition filed under Article 226 of the Constitution prays for quashing notice dated 20.10.2006 (Annexure P.3) under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity 'the Act') issued by the respondent bank for recovery of sum of Rs. 12,13,251.58.

(2.) BRIEF facts of the case are that the petitioner was sanctioned a Open Cash Credit Limit (OCC) of Rs. 10,00,000/ - on 10.5.1999 for a period of one year by hypothecating the stock, book debts and collateral security of landed property. The limit was extended upto 9.8.2000 and afterwards on 13.7.2000 it was again renewed for a further period of one year till 12.7.2001. The amount was overdrawn exceeding the limit since 28.8.2000. After 29.8.2000 there was absolutely no transaction in the account which became irregular for which respondent No. 2 issued notice dated 6.3.2001 (Annexure P.1) calling upon the petitioner to remit the entire liability with interest on or before 25.3.2001. The petitioner failed to reply to the notice. Then a legal notice was issued by the respondents on 5.3.2002 (Annexure P.2) asking the petitioner to pay the amount of Rs. 12,13,251.58P. with interest calculated upto 31.12.2000. The petitioner was apprised by the respondent that if it failed to pay the aforesaid amount then the respondents were to file a suit against it. Accordingly, the respondent bank filed a suit/application bearing No. OA 467 of 2002 for recovery of the amount due before the Debt Recovery Tribunal (for brevity 'the DRT') which is still pending. Thereafter a notice dated 20.10.2006 under Section 13(2) of the Act was issued by respondent No. 2 asking the petitioner to discharge the liability as claimed through notice dated 5.3.2002 within sixty days otherwise the respondent bank was entitled to exercise all or any of the rights under Section 13(4) of the Act. The petitioner replied to the above notice by stating that no action under Section 13 of the Act could be taken as already the respondents have availed the remedy of filing the suit for recovery of the due amount before the Debt Recovery Tribunal. The respondents vide letter dated 23.12.2006 replied to the petitioner that they can take action under the Act. The same was again replied by the petitioner pointing out that there is a bar of limitation under Section 36 of the Act.

(3.) NO one has put in appearance on behalf of the respondents despite service.