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2020 (1) TMI 34 - KARNATAKA HIGH COURTAttachment of Bank Accounts - Classification of account under which category it falls as NPA - validity of proceedings under Section 13(2) of the the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - statement of objections - invocation of Section 13(2) of the SARFEASI Act - the main grievance of the learned Senior Counsel for the petitioners is that before the due date i.e., on 31.1.2019, the cash credit facility was stopped from 10.1.21019 and it was not a case of NPA. It is the voluntary act of the Bank in stopping the loan facility and the bank had no power to declare as NPA and it is contrary to prudential norms issued by the Reserve Bank of India from time to time. Therefore, impugned actions of the respondents cannot be sustained. Whether the petitioners have made out any case to interfere with the impugned notices issued by the respondent-Bank both under Sections 13(2) and 13(4) of the SARFAEASI Act and any relief as sought for can be granted in the facts and circumstances of the present case? HELD THAT:- The material on record clearly depicts that ever since January, 2019 the petitioners had been interacting with the respondent-Bank, several meetings were held and they also participated in the Consortium Bank Meetings as invitees, but they have not paid any amount due especially after January, 2019, when the default started. The petitioners have admitted in their reply dated 10.7.2019 that they have neither made any payment of loan due nor made any effort to regularize the defaulted account in view of the enforcement action taken for recovery of GST dues by the GST Authorities - It is also not in dispute that the petitioners that as on the date of NPA i.e., 29.5.2019, the amount due to the bank was ₹ 142,73,29,479.23 ps. Inclusive of the principal amount not paid to the respondent-Bank. On that ground also the writ petition is liable to be dismissed as not maintainable. It is also not in dispute that the petitioners have not made any efforts to pay the amount due to the Bank subsequent to declaration of NPA on 30th April, 2019 till today. Therefore, the contention of the learned Senior Counsel for the petitioners that the provisions of the SARFAESI Act is not applicable to the present case, cannot be accepted as the petitioners, who are borrowers have availed and utilized the total sanctioned loan amount of ₹ 137,50,00,000/- and committed default in not paying any interest as well as the principal amount as on 30.4.2019. The petitioners were liable to pay more than 100% of the principal amount and interest. Therefore, the provisions of Section 31(j) of the SARFAESI Act is not applicable to the petitioners as rightly contended by the learned Senior Counsel for the respondents. Accordingly, the contention of the petitioners that the provisions of the SARFAESI Act is applicable cannot be accepted. Admittedly in the present case, the respondent-Bank has issued notice under Sections 13(2) and 13(4) of the SARFAESI Act and therefore, the very writ petition filed for the reliefs sought for is not maintainable. There are disputed facts that arise for consideration with regard to the allegations made by the petitioners that the respondents have not complied with the RBI Guidelines, but the same is disputed by the respondents contending that they have followed the procedure as contemplated under the provisions of the SARFAESI Act and as per the Guidelines issued by the Reserve Bank of India. Therefore, this Court cannot decide the same in exercise of powers under Article 226 of the Constitution of India. The point raised in the present writ petition has to be answered in the negative holding that the petitioners have not made out any ground to interfere with the impugned notice issued by the respondents-Banks under the provisions of Section 13(2) and 13(4) of the SARFAESI Act and the petitioners are not entitled to any relief as sought for in the present writ petition in exercise of powers under Article 226 of the Constitution of India - petition dismissed.
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