KAILASH CHAND GUPTA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) This writ petition is filed assailing the action of the respondent bank in issuing demand notice dated 23.01.2020 under Section 13(2) and possession notice dated 24.09.2020 under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the SARFAESI Act'), as being illegal, arbitrary, violative of principles of natural justice and contrary to the provisions of the SARFAESI Act and the Rules made thereunder.

(2.) Heard learned counsel for the petitioners and Sri A.Krishnam Raju, learned counsel appearing for the respondent bank.

(3.) It is contended that the 5th petitioner is in the business of buying, selling and manufacture of gold jewelry, and had availed credit facility in the form of financial assistance and other facilities from the respondent bank. Initially the credit facility was availed by the 5th petitioner in the year 2008 in a sum of Rs. 35 crores and having regard to the regularity in repayment, the respondent bank enhanced the said financial facility over a period of time by periodical renewal and stood at Rs. 80 Crore as on 01.03.2018. In respect of such financial facility extended, 1st to 4th petitioners stood as guarantors. The said credit facility extended to the 5th petitioner was secured by creating mortgage of gold and jewelry; mortgage of immovable properties by the 1st to 4th petitioners by deposit of title deeds and equitable mortgage. The value of the assets of the petitioners which are secured for the financial facility of Rs. 80 crore extended are worth over Rs. 120 crores. It is contended that though the respondent bank during the year 2018-19 had reduced the limit of financial assistance extended to Rs.65.00 crores, the assets secured remained the same and the value of such secured assets of the petitioners are worth more than double the financial facility extended to the 5th petitioner.