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HARIKRISHNA ENGINEERING WORKS AND 4 Versus SYNDICATE BANK AND 1

Notices under the provisions of SERFAESI Act challenged - prayer to direct the respondent Bank to release working capital in favour of the petitioner No.2. - Held that:- In view of the remedy available, this Court is not inclined to entertain the petition for the sole reason that petitioners have alternative statutory remedy available of preferring Appeal under Section 15 of the SERFAESI Act, 2002 before the Debt Recovery Tribunal. Section 17 of the Act, as amended by the Enforcement of Security .....

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eir case. All the contentions which are sought to be raised in this petition by the petitioners could well be raised and agitated in the Appeal before the Tribunal. The matter is under commercial realm. In such cases, rule of availment of alternative statutory remedy has to be adhered to steadfast. - SPECIAL CIVIL APPLICATION NO. 20209 of 2016 - Dated:- 5-12-2016 - MR. N.V.ANJARIA, J FOR THE PETITIONER : MR BM MANGUKIYA, ADVOCATE, MR TARAK DAMANI, ADVOCATE, MS BELA A PRAJAPATI, ADVOCATE CAV JUDG .....

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r of the petitioner No.2. 3. The first petitioner is a borrower proprietor concern. The petitioner No.2 is also borrower. The petitioner No.3 is the Proprietor of the first petitioner, also a surety. The fourth and fifth petitioners are the guarantors and sureties. 3.1 The first impugned notice dated 02nd August, 2016 was issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SERFAESI Act) assailing The petitioner t .....

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ice dated 03rd October, 2016. Notice dated 23rd November, 2016 is notice under Section 13(4) of the SERFAESI Act read with Security Interest (Enforcement) Rules, 2002. It is a notice requiring the borrower/guarantor to pay the sum mentioned therein being ₹ 08,20,82,444.62 Ps. with interest running thereon within 30 days from the date of publication of notice, stating further that on failure of which Bank shall sell the properties under the provisions of the SERFAESI Act, 2002. These notice .....

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basis the petitioners invested huge amount from their own pocket. It was submitted that there was a legitimate expectation that Bank would release the working capital. The prayer for release of working capital is made, however the same appears to be a camouflage for defence. Essentially, the petition challenges action on part of the respondent Bank taken under the SERFAESI Act, 2002. 4.1 It appears that petitioners were extended financial assistance by the Bank by placing properties on equitable .....

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isions of the SERFAESI Act which have reached the stage as aforesaid which the measure contemplated to sell the properties under Section 13(4) of the Act. 5. Section 17 of the Act reads as under. 17(1) Right to appeal: (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may take an application along with such fee, as may be prescribed] to the Debts Recovery .....

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laneous Provisions (Amendment) Act, 2016, entitles an aggrieved person to prefer Appeal. 6. In Kanaiyalal Lanchand Sachdrv Vs State of Maharashtra [(2011) 2 SCC 782], the Supreme Court in paragraphs 21 and 22 observed as under. 21. In Indian Overseas Bank & Anr. Vs. Ashok Saw Mill, the main question which fell for determination was whether the DRT would have jurisdiction to consider and adjudicate post Section 13(4) events or whether its scope in terms of Section 17 of the Act will be confin .....

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by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in sub- section (3) thereof. 36. The intention of the legislature is, therefore, clear that while the banks and financial institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectify .....

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ct. On the other hand, the law is otherwise and it contemplates that the action taken by a secured creditor in terms of Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT." 22.We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit .....

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person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain .....

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