HC allows 6 petitions on instance of Bank

Shimla: The Himachal Pradesh High Court allowed six writ petitions, filed by State Bank of India, against the state government as the bank challenged the recovery proceeding in the high court after failure of government and its agencies to repay the loan amount as the accounts of the state and other borrowers were declared non-performing assets (NPAs) by the bank.
A division bench of Justices Tarlok Singh Chauhan and Bipin Chander Negi said in a 13-page verdict passed on December 18, a copy of which was supplied to UNI on Wednesday.
The HC said that the moot question that arises for consideration, in all six petitions lodged by the bank, is the nature of power exercised by the District Magistrate in application(s) filed by the Bank or financial institutions under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
The court clubbed and allowed all the petitions of the SBI and directed the respondent to decided the applications filed by the Bank under section 14 within the parameters of the law as explained by the Supreme Court.
The HC allowed the writ petitions, stating that it is appropriate to direct the respondent state to decided an application of the petitioner bank under section 14 of the Act within the parameters of the law as explained by the Supreme Court of India.
The HC in the verdict passed appropriate orders within an outer limit of 30 days extendable up to 60 days, but after recording reasons for delay.
The court said that the borrowers availed of various financial assistance the petitioner-Bank by mortgaging their immovable properties. However, the borrowers failed to repay the loan amount, as a result …. their loan accounts were classified as non-performing assets (NPA).
The Bank, thereafter, issued notices under sections 13(2) and 13(4) of the Act to borrowers, but to no avail, constraining the Bank to file application(s) under section 14 of the Act, seeking assistance in taking over possession of the secured assets.
However, prior to aforesaid application(s), the borrowers filed caveat petition(s) before the District Magistrate in respect of order of delivery of possession.
The respondent-District Magistrate has contested the petitions by filing replies, wherein common defense has been taken to the effect that on examination of the case files.
The District Magistrate started hearing the borrowers and directed the Bank to supply documents to
borrowers’ petitions.
The HC further said that the borrowers had raised objections that classification of their accounts as NPAs was not in accordance with statutory guidelines of the RBI.
The state maintained that the Bank had wrongly clubbed the liability of other independent and distinct entities, as a result of which their accounts turned NPAs.