RAMLAXMAN PARBOILED RICE PRIVATE LIMITED Vs. ALLAHABAD BANK

JUDGEMENT

(1.) The petitioners have challenged the legality of the sale notice dated 19.09.2019 issued by the respondent-bank.

(2.) Briefly the facts of the case are that the respondent-bank had sanctioned a cash credit limit of Rs.9 crores in favour of the petitioner No.1, which is a private limited company. According to petitioner No.1, they have been regularly paying installments as per the terms and conditions between the bank and the petitioner No.1. However, on 25.10.2018, the Officers of the respondent-bank visited the unit. They discovered that there is a variation in the stock and the book dates. Hence, on 08.04.2019, the respondent-bank issued a show cause notice to the petitioner No.1. The petitioner No.1 submitted a detailed explanation to the bank. Notwithstanding the explanation given by the petitioner No.1, the respondent-bank issued a sale notice on 17.04.2019, published in an English Daily Newspaper, namely, Hans India Limited, on 18.04.2019, proposing to conduct an e-auction on 24.05.2019 in respect of the agricultural lands belonging to the petitioner No.4.

(3.) Since the petitioners were aggrieved by the said notice, they immediately filed an appeal before the Debts Recovery Tribunal, namely, SA.No.176 of 2019. Before the learned Tribunal, they pleaded that the proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, ('SARFAESI Act' for short) were not maintainable as the respondentbank has not issued any demand notice under Section 13(1) of the SARFAESI Act. Moreover, since the petitioners' properties are agricultural lands, the same is exempted under Section 31(i) of the SARFAESI Act. Therefore, they sought the relief that the further proceedings pursuant to the sale notice dated 17.04.2019 should be stayed.