RKI BUILDERS PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Heard Sri Raja Sripathi Rao, learned counsel appearing for Sri V.Murali Manohar learned counsel for petitioner and Sri Many Gecil Thomas learned counsel for third respondent bank.

(2.) Petitioner is a Micro, Small and Medium Enterprise (MSME) unit. It has availed credit facility from Syndicate Bank, which was later merged with Canara Bank and defaulted in repayment. The third respondent bank declared the loan account of petitioner as a non- performing asset (NPA) and has taken recourse to measures prescribed by the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'Act, 2002') to recover the loan. It has issued demand notices on 3/5/2021, 16/7/2021, 18/10/2021 and 15/2/2022 under Sec. 13(2) of the Act, 2002. It has issued possession notice on 4/5/2022. On 6/8/2022 third respondent bank issued sale notice proposing to conduct e-auction of the secured assets on 9/9/2022 fixing the reserve price as 20.04 crores. After issuance of sale notice, there was correspondence to settle the loan account for One Time Settlement (OTS). It appears, after due deliberations, petitioner submitted fresh OTS proposal for 23.55 crores vide letter dtd. 16/8/2022 and vide letter dtd. 22/8/2022 requested the respondent bank to recall the sale notice dtd. 6/8/2022. Alleging that no further action in the matter is taken by the bank but proceeding to conduct e-auction, this writ petition is filed. Petitioner sought omnibus prayer touching upon account being declared as NPA, rejection of OTS, not extending the benefit of GECL/ECGL, violation of Reserve Bank of India (RBI) guidelines and conducting e-auction to sell secured assets.

(3.) Extensive submissions are made by learned counsel for petitioner and learned counsel for third respondent bank touching upon various aspects of reliefs sought in the writ petition. However, against measures initiated by the third respondent bank under Act, 2002, leading to conducting e-auction to sell secured assets, Sec. 17 of the Act, 2002 provides remedy before the Debts Recovery Tribunal. As Court noticed that this writ petition is filed directly under Article 226 of the Constitution of India without availing the remedy under Sec. 17 of the Act, 2002, the submissions of learned counsel are considered on the aspect of maintainability of the writ petition only.