Muhammed Kutty T v. State Bank of India, Authorised Officer & Chief Manager SBI SMEC Kozhikode Branch, Reserve Bank of India, Union of India

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **TUESDAY, THE 6[TH] DAY OF FEBRUARY 2024 / 17TH MAGHA, 1945** **WP(C) NO. 33481 OF 2023** ## **PETITIONER:** **MUHAMMED KUTTY T AGED 52 YEARS S/O LATE MUMMI HAJI, THADATHIL HOUSE, THENNALA P.O MALAPPURAM DISTRICT, PIN – 676511** **BY ADVS. P.YADHU KUMAR P.BABU KUMAR SWETHA K.S.** ## **RESPONDENTS:** - **1 STATE BANK OF INDIA REPRESENTED BY ITS BRANCH MANGER CALICUT UNIVERSITY BRANCH, MALAPPURAM, PIN – 673635** - **2 AUTHORISED OFFICER AND CHIEF MANGER STATE BANK OF INDIA SMEC KOZHIKODE BRANCH, BANK ROAD, MANANCHIRA, PIN – 673001** - **3 RESERVE BANK OF INDIA REPRESENTED BY CHIEF GENERAL MANGER CENTRAL OFFICE, SBS MARG, MUMBAI, PIN – 400001** - **4 UNION OF INDIA REPRESENTED BY SECRETARY TO BANKING CENTRAL SECRETARIATE, NEW DELHI , PIN – 110001** W.P.(C) No.33481/2023 : 2 : **BY ADV SMT.LAKSHMY FOR R1 & R2 SRI.S.MANU, DSGI** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.33481/2023 : 3 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## W.P.(C) No.33481 of 2023 ````````````````````````````````````````````````````````````` _Dated this the 6[th] day of February, 2024_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The petitioner, who is running a Small Scale Industry, has approached this Court seeking to quash Ext.P2 notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Ext.P6 reply issued by the 2[nd] respondent to the objections of Section 13(2) notice. 2. The petitioner states that ₹13 lakhs loan was availed by him from the SBI for running a home designing. The petitioner also availed ₹10 lakhs for coconut trading. The petitioner availed an agricultural term loan of ₹10 lakhs. A Kisan Credit loan of ₹2 lakhs was also availed. Consequent to business failure, loans could not be repaid. W.P.(C) No.33481/2023 : 4 : 3. Due to non-payment of loan instalments, the accounts were declared NPA in the year 2019. The Bank offered settlement under the Scheme 'Rinn Samadhan 2021-2022'. A settlement was arrived at. The petitioner was directed to pay ₹18 lakhs for closing entire loan transaction. The petitioner remitted ₹14,28,000/-. The petitioner could not remit the balance amount of ₹3,62,000/-. The petitioner however informed the Bank about his readiness to pay the balance amount. 4. The Bank, however, issued Ext.P2 notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. In Ext.P2, it was stated that the petitioner is liable to pay ₹39,28,461/-. The petitioner submitted his objections. Thereupon, the petitioner was served with Ext.P6 reply dated 29.09.2023. The petitioner states that the respondents are taking hasty steps to issue Section 13(4) notice and to take possession of the entire property. W.P.(C) No.33481/2023 : 5 : 5. The petitioner would urge that the proceedings of the Bank is in violation of the Act, 2002 and the directions of the Apex Court contained in _**Mardia Chemicasl Limited v. Union of India** [(2004) 4 SCC 311]_ and _**Sundara Kumari W/o LR v. Standard Chartered Bank** [ILR 2006 Kar 16]._ 6. Respondents 1 and 2 filed counter affidavit and resisted the writ petition. Respondents 1 and 2 submitted that as repayment of loan was defaulted in spite of repeated reminders, since accounts were running irregular, the loan accounts were classified as NPA on 18.08.2019 and the proceedings under the Act, 2002 were initiated. 7. The issue was placed before the Lok Adalat, Kozhikode on 06.12.2021. As per the Award of the Lok Adalat, the petitioner was to remit ₹1,02,500/- on or before 31.12.2021 and the remaining amount of ₹9,22,500/- on or before 31.03.2022. This Award was in respect of account No.67039162799. In respect of another loan account 67288155903, the petitioner was to remit ₹1,35,000/- on or before 31.12.2021 and the remaining amount of ₹12,15,000/- W.P.(C) No.33481/2023 : 6 : on or before 31.03.2022. 8. The petitioner failed to adhere to the time schedule fixed by the Adalat. Therefore, the respondents are entitled to proceed with recovery. 9. I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondents. 10. The petitioner is challenging Ext.P2 notice issued by the Bank under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Ext.P6 reply given by the Bank rejecting the objections raised by the petitioner. The petitioner has alternative remedy against Exts.P2 and P6. The petitioner can approach the Debts Recovery Tribunal under the Act, 2002. 11. The petitioner seeks to pay the balance amount pursuant to the Award passed by the Lok Adalat, Kozhikode in the year 2022. According to the Bank, the petitioner had time up to 31.03.2022 to pay the agreed amount. The W.P.(C) No.33481/2023 : 7 : petitioner failed to pay the amount. Thereafter, possession of the secured assets was taken over on 25.09.2023. 12. Exts.R1 and R1(a) copies of the Award provide that in default of payment as stipulated in the Award, the settlement shall stand cancelled. The Hon’ble Apex Court has held in the judgment in _**State Bank of India v. Arvindra Electronics Private Limited** [(2023) 1 SCC 540]_ that the High Court in exercise of the powers under Article 226 of the Constitution of India cannot vary the terms of a One Time Settlement agreement. Though the Awards passed in this case are not under any One Time Settlement Scheme, but since they are under a settlement Award by the Lok Adalat, this Court will not be justified in varying the terms of the Award. The writ petition is therefore without any merit and is dismissed. Sd/- **N. NAGARESH, JUDGE** aks/03.02.2024 W.P.(C) No.33481/2023 : 8 : ## **APPENDIX OF WP(C) 33481/2023** ## **PETITIONER'S EXHIBITS** **EXHIBIT P1 A TRUE PHOTO COPY OF THE RECEIPTS DATED 14.03.22 ISSUED BY THE RESPONDENT BANK** **EXHIBIT P2 A TRUE COPY OF THE SECTION 13(2) NOTICE ISSUED BY THE RESPONDENT DATED 24.07.23** **EXHIBIT P3 TRUE PHOTOCOPY OF THE THE INTIMATION ISSUED FROM THE POST OFFICE SHOWING DATE OF NOTICE DATED 26.09.23** **EXHIBIT P4 TRUE PHOTO COPY OF THE POSTAL COVER SHOWING THE REGISTER NUMBER OF THE REGISTERED NOTICE ISSUED UNDER SECTION 13(2)** **EXHIBIT P5 TRUE COPY OF THE REPLY NOTICE SEND BY THE PETITIONER TO THE 13 (2) NOTICE DATED 26.09.23** **EXHIBIT P6 TRUE COPY OF THE REPLY NOTICE ISSUED BY THE SECOND RESPONDENT DATED 29.09.23** **EXHIBIT P7 A TRUE PHOTOCOPY OF THE REPRESENTATION DATED 23-03-2022 EXHIBIT P8 A TRUE PHOTO COPY OF THE INTIMATION DATED 23.03.2022 EXHIBIT P9 A TRUE COPY OF THE ACCOUNT STATEMENT OF THE HOMEDESIGNS ( CC NO. 67 288155903 ) FROM 04-08-2014 TO 26-092023** **EXHIBIT P10 THE TRUE COPY OF STATEMENT OF ACCOUNT FROM 01-01-2022 TO 16-03-2022 FOR THE ACCOUNT NO. 67039162799** **EXHIBIT P11 TRUE COPY OF THE RELEVANT PAGES RINN SAMADHAN SCHEME OF 2021-22 EXHIBIT P12 TRUE COPY OF THE INTIMATION DATED 9.09.2022 ISSUED BY ASSISTANT GENERAL MANGER ON BEHALF ON 2ND RESPONDENT EXHIBIT P13 TRUE COPY OF THE OP TICKET SERIES DATED 14.11.2022** W.P.(C) No.33481/2023 : 9 : **EXHIBIT P14 TRUE COPY OF THE OP TICKET SERIES DATED 09.09.2021 EXHIBIT P15 TRUE COPY OF THE OP TICKET SERIES DATED 10.01.2022 EXHIBIT P16 TRUE COPY OF THE OP TICKET SERIES DATED 21.07.2022 EXHIBIT P17 TRUE COPY OF THE USG/DOPPLER REPORT DATED 02.07.2022** ## **RESPONDENT'S EXHIBITS** **EXHIBIT R1** **TRUE COPY OF THE AWARD IN PLP.N0 1342/2021** **EXHIBIT R1(A) TRUE COPY OF THE PLP NO. 1340/2021 DATED 6/12/2021 EXHIBIT R2(A) THE CERTIFIED STATEMENT OF ACCOUNT BEARING NO. 67288155903 FOR THE PERIOD FROM 1/1/ 2022 TO 16/11/2023** **EXHIBIT R2(B) THE CERTIFIED STATEMENT OF ACCOUNT BEARING NO. 67039162799 FOR THE PERIOD FROM 1/1/ 2022 TO 16/11/2023**