K.S Rathore, J.:— Brief facts of the case are that the petitioner firm applied before the non-petitioners for sanction of Export Credit Limit and after considering an doing all the formalities the limit was sanctioned towards pre-shipment limit for Rs. 70 lacs, towards post shipment limit for Rs. 50 lacs and limit of Foreign L.C for Rs. 30 lacs.
2. The security was given to the Bank by the guarantor Shri Shyam Lal son of Late Shri Radhey Shyam Sharma and portion of house no. 1658, Ballabh Bhawan, Jat Ke Kuwe Ka Rasta was mortgaged.
3. During the period March 2003, some Export Bills were pending with the Bank for remittance. Since these bills were not credited within time by the Foreign Bank and the amount was not realized in the account of the petitioner hence non-petitioner no. 1 declared the account of the petitioner as Non-Performing Account (NPA).
4. Learned counsel for the petitioner further submits that it was the duty of the Bank to claim the amount from ECGC and get realization of Foreign Bills. There was no role and liability of the petitioner nor petitioner could pursue the bills for realization. Therefore, the present petition is preferred by the petitioner seeking writ order or direction directing the respondent to pursue the claim towards the foreign bills from ECGC and adjust the payment of the same in the petitioner's account. Petitioner further prayed that the respondents be directed to regularize/upgrade the account of the petitioner.
5. The action of the non petitioner was challenged by the petitioner on several counts:
6. So far as the declaration of petitioner's non performing assets (NPA) is concerned, the petitioner submits that the respondent has violated the guidelines as laid down by the Reserve Bank of India and also acted in contravention with the ratio decided by Hon'ble the Supreme Court in the case of Maradia Chemicals reported in (2004) 4 SCC 311 : AIR 2004 SC 2371.
7. The petitioner also referred the meaning of non performing assets:
NPA means “an asset or account of a borrower, which has been classified by a bank or financial institution as sub standard, doubtful or loss asset, in accordance with the directions or under guidelines relating to asset classifications issued by the Reserve Bank”.
8. The petitioner also referred the recommendations of 1991 relating to the Financial System prevailing in the country and Standard Policy as laid down by the Export Credit Guarantee Corporation of India Ltd.
9. The ECGC policy which is designed to protect exporters from losses that may arise due to a variety of commercial and political risks which are beyond their control. Backed by this insurance, an exporter can expand his business by taking on new buyers, entering new markets or by taking up new products. In the policy it was also provided that the Corporation normally pays 90% of the loss, whether it is arises due to commercial risks or political risks. The remaining 10% has to be borne by the exporter himself.
10. And after referring the standard policy of ECGC, learned counsel for the petitioner submits that this is only the bank to pursue the matter and realized the amount which has been paid towards this scheme by the petitioner.
11. The Committee further suggested that the same should be followed by the banks and financial institutions in India and an advance is to be shown as non-performing assets where the interest remains due for more than 180 days and placed reliance on the judgment of Hon'ble Supreme Court in the case Maradia Chemicals Ltd. v. Union of India reported in (2004) 4 SCC 311 : AIR 2004 SC 2371.
12. The petitioner tried to make out his case that the petitioner firm was declared NPA without following norms and shown the details of the payment credited in the account and further submits that besides the amount paid towards ECGC some other amounts were also credited in the account from time to time. Hence on the basis of record it is emphatically clear that amount more than the interest was credited in the account and there was regular transaction in the account. Hence, the account cannot be declared as NPA as held in the case of Maradia Chemicals (supra).
13. With regard to alternative remedy, the petitioner submits that since he is not challenging any order by which the amount which is payable by the petitioner and the petitioner through this writ petition only prayed therein seeking direction to pursue the claim towards Foreign Bills from ECGC and adjust the payment of the same in the petitioner's account and further prayed with regard to regularization of the account of the petitioner. Therefore, the objection raised on behalf of the respondent that the petitioner has alternative efficacious remedy before the DRT and Civil Court is menaningless.
14. He further submits that the petitioner cannot be compelled under section 17 of the Act of 2002 as the petitioner is not aggrieved by any of the measures referred to in sub-section 4 of section 13 taken by the secured creditors or his authorized officers. Section 13(4) of the Act of 2002 prescribes following measures namely:—
(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset;
(b) take over the management of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realize the secured asset;
(c) appoint any person to manage the secured assets the possession of which has been taken over by the secured creditor.
(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.
15. And after referring section 13(4), learned counsel for the petitioner submits that in para 18 of the writ petition the petitioner has specifically mentioned that their account has wrongly been declared as NPA. Statement of Account preceding 180 days also prove this fact. Therefore, without exhausting remedy available under section 17, the petitioner has preferred this writ petition seeking relief for declaring the action of the Bank illegal in treating the petitioner's account as NPA.
16. Per contra, learned counsel for the respondents submits that this writ petition is not maintainable as the petitioner has come to this court without availing alternative remedy which is available to the petitioner under section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
17. Learned counsel for the respondent also placed reliance on the case of Maradia Chemicals (supra) wherein application before the DRT was to be tried and Hon'ble the Supreme Court has held that the Remedies against available to borrower and borrower can raise objection to notice that has to be served on borrower. Objection, if any raised, must be communicated to borrower - Borrower has also the right to approach DRT after recovery measure is taken. He can also approach Civil Court in cases of fraud and absurdity.
18. Therefore, so far declaring the account of the petitioner as NPA is concerned, learned counsel for the respondents submits that the petitioner was well aware that since in the case of the petitioner as many as four export bills remained outstanding for more than a year the bank had to classify all the accounts of N.P.A on 31.03.2003 and it was emphatically denied that any Foreign Bill was credited to the account on 31.03.2003 And the respondent Bank had informed the petitioner and demanded payment on various occasions i.e on 10.2.2003, 10.2.2003 and 20.2.2003 which are placed on record and all these bills are of the month of August 2002 and their due dates had also expired in the months of October/November, 2002. Since the Bills were raised it was also the duty of the petitioner to have made efforts to get the bills realized.
19. It is also stated on oath that non petitioner Bank had made claim with the Export Credit Guarantee Corporation under the Policies, but the claims were declared by ECGC. It is denied that the amount of premium paid to ECGC against the export bills was debited to the account of the petitioner.
20. It is also denied that the Bank has not pursued the claim and submitted that after the payment of the bills had not been received, claims were made against the policies with ECGC but those claims were also declined and even after advising the petitioner of the above when it did not take any action to make payment of the amounts advanced, the Bank had no alternative but to initiate recovery proceedings as per law.
21. And the contentions raised on behalf of the petitioner that the petitioner was not well informed and the procedure has not been conducted in accordance with the provisions of law was declared as the petitioner has applied for one time settlement. And for the purpose of one time settlement the petitioner failed to deposit the required amount and only a sum of Rs. 2.50 lacs had never been paid with the result no settlement could be arrived at and all the action shows that the petitioner is not serious about the settlement with a view to linger on the issue of realization.
22. Hon'ble the Supreme Court in the case of State Bank of Bikaner and Jaipur v. Ballabh Das & Co. reported in (1999) 7 SCC 539 has held as under:—
The contract of insurance/guarantee is between the Export Credit and Guarantee Corporation of India Ltd. and the appellant Bank and prima facie the term/condition in the said insurance cover/guarantee referred to above is for the benefit of the insurer and not for the benefit of the export i.e the respondents. It does not absolve the respondents of the liability to repay the amounts borrowed for the purpose of making exports if the foreign buyer of those goods does not make payment to the Bank of the amount payable in respect of those goods. though the insurer/guarantor under the insurance/guarantee possibly would stand discharged from its liability to the insured on the exporters delivering the documents of export of goods to the insured, prima facie, the principle debtor would still remain subsisting. Thus, even this prerequisite for the liability to be called a debt as contemplated by the Act having been satisfied the suits filed by the Bank should have been treated by the High Court as proceedings for recovery of the debts.
23. Having considered the submissions made on behalf of the parties and upon careful perusal of the Standard Policy of the ECGC as well as the guidelines issued by the State Bank of India and the judgments referred by the parties, it is not disputed that the petitioner has defaulted in making payment and not serious about repayment of it and therefore recovery proceedings initiated by the respondent which appears to be reasonable. It is also not disputed that the account of the petitioner is declared NPA and the petitioner himself admit in the writ petition and submits that this writ petition is only with regard to seeking direction directing the respondent to pursue the claim towards foreign bills of ECGC and it is not disputed that the respondent has pursued the claim towards the foreign bills from ECGC but same has been rejected not only once but in the second instance also the claim towards the foreign bill from ECGC was also rejected.
24. Consequently, the direction with regard to pursuance of claim towards foreign bills from ECGC is not tenable. Consequently, this writ petition so far as this relief is concerned stand dismissed.
25. Now with regard to direction to regularize/upgrade the account of the petitioner as the petitioner himself admit that the account of the petitioner is already declared NPA and recovery proceedings already initiated, the question of regularizing and upgrading of account does not arise as the petitioner also failed to take advantage of one time settlement as stated by the respondent that he only deposited Rs. 2 lacs and failed to deposit the balance amount as demanded therefore his case was not considered for one time settlement and further more he is not serious to the regularization of the account. Even considering the ratio declared by Hon'ble the Supreme Court in the case of Maradia Chemicals, Hon'ble the Supreme Court has clearly stipulated that the petitioner has right to approach DRT after recovery measure is taken and it is not disputed that the recovery measure is taken and same is not challenged by the petitioner before the DRT.
26. Further the Supreme Court has held that appeal under section 17 of the Act is like that of a suit in the Court of the first instance under the Code of Civil Procedure. No doubt in suits also it is permissible, in given facts and circumstances and under the provisions of the law to attach the property before a decree is passed or to appoint a receiver and to make a provision by way of interim measure in respect of the property in suit. But for obtaining such orders a case for the same is to be made out in accordance with the relevant provisions under the law. There is no such provision under the Act.
27. In any case since this writ petition involves several disputed question which cannot be decided by this court while exercising power under Article 226.
28. In view of the settled propositions of law and the ratio decided by Hon'ble the Supreme Court, this writ petition does not survive and deserves to be dismissed being devoid of merit and same is dismissed with no orders as to cost.