Ghanshamdas S/O Salchandra Ahuja v. Jintur Urban Co-Op. Bank Ltd. Others

A.B. Naik, J.

1. In all these petitions, the petitioners are challenging the action taken by the Banks under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as "the Securitisation Act"). Besides challenging the action of the Bank, they have also impugned the constitutional validity of the Securitisation Act. One common point is raised in all these petitions i.e. whether the Bank at the same time can avail/ adopt two different remedies to recover the dues from the petitioners by i) adopting regular mode under the General laws; ii) adopting the mode provided under the Securitisation Act. As these questions are common in all petitions, we propose to dispose of all the petitions by the common order.

2.Facts in Writ Petition No.3075 of 2004.

The petitioner applied to the respondent No.1 Jintur Urban Cooperative Bank Ltd., Branch Subhash Road, Parbhani (hereinafter referred to as the Bank), the petitioner being owner and possessor of two plots situated within the Municipal limits of Parbhani, desired to construct a shopping complex in the name and style as "Ahuja Complex" He requested. The bank to provide financial assistance. Accordingly, the Bank accepted the request and granted loan. As the petitioner failed to repay the loan, the Bank moved the Registrar Cooperative Societies U/s 101 of the Maharashtra Cooperative Societies Act. (hereinafter referred to as M.C.S. Act) and obtained a certificate of recovery on 18.9.2000. Thereafter, it appears that the petitioner filed a dispute U/s 91 before the Cooperative Court, Nanded being Case No.CCP/320/2000. The Cooperative Court Nanded, by its order dated 6.12.2000 dismissed the dispute as the dispute is not maintainable, challenging the certificate obtained by Bank U/s 101 of the M.C.S. Act. After dismissal of the dispute, it appears that, the Bank tried to recover the amount as per the certificate.. However, the proceedings are still not concluded and it is informed at the Bar that the petitioner has challenged the action of the Bank and the orders passed by the authorities under the M.C.S. Act by filing a writ petition No.3075/2004 which is pending in this Court. It so happened that the Bank on realising that the proceeding under M.C.S. Act are of no help, the Bank decided to initiate the proceedings under Securitization Act. Accordingly, the Bank issued notice to the petitioner as provided U/s 13(2) of the Securitization Act. The notice is placed on By the said record Exh. G dated 21.2.2004. By the said notice the bank called upon the petitioner to pay a sum of Rs.54,31,422-65 within 60 days from the date of receipt of the notice. The petitioner was put on notice that if the amount is not paid within 60 days, the Bank shall proceed to take steps as provided U/s 13(4) of the Securitization Act.

3.Immediately, on receipt of the notice the petitioner on 21.4.2004 replied, which, is made part of the paper book at Exh. H - page 45. The petitioner questioned the propriety of the bank for issuing the notice U/s 13(2) of the Act, as the Bank has already obtained a certificate U/s 101 of the M.C.S. Act, and the proceedings are challenged and pending in the High Court and the High Court has stayed the proceedings of recovery certificate. It is also stated in the said notice that as the certificate is sub judice, simultaneous proceeding under Securitization Act are barred and cannot be proceed with. It is stated in reply by the petitioner that the Bank has taken possession of 15 flats and 8 flats were sold by the Bank and still 7 flats remained in possession of the bank. The petitioner disputed the claim of the Bank in the said notice. It was also contended that the property mentioned in the notice is mortgaged with the State Bank of India and the State Bank of India, has first charge and the Cooperative Bank has second charge, therefore, he contended that the proceeding U/s 13(2) being bad in law, cannot be proceeded with. As the petitioner has failed to deposit amount as demanded within the specific period, the Bank took the possession of the properties on 26.4.2004. and intimated the petitioner by the notice as required in Schedule IV Rule 8(1). Immediately after the notice of taking possession, the petitioner by filing the instant writ petition on 10.5.2004, is seeking following reliefs :

"(B) Rule may kindly be issued and it may kindly be made absolute.

(C) To issue the writ of certiorari or any other writ or direction in the like nature to quash and set aside the impugned notice quash dt.21.2.2004 Exh. "G" and notice dt.26.4.2004 Exh. "I" issued by the Respondent No.1.

(D) Pending the hearing and final disposal of this writ petition the notice dt.21.2.2004 Exh. "G" and the notice dt.26.4.2004 Exh. "I" issued by the Respondent No.1 may kindly be stayed."

The petition was heard by this Court in vacation on 18.5.2004 and this Court granted ad-interim relief in terms of prayer clause (D) pending admission. Thereafter, the petition was placed for motion hearing before the learned Single Judge on 6.7.2004 and the learned Single Judge on noticing that the petitioner has challenged validity of the notice U/s 13(4) of the Securitisation Act, has directed the matter to be placed before the Division Bench. Thereafter, the petition was heard by the Division Bench on 29th October 2004, and adjourned the petition by consent of the parties to 8.12.2004. The Division Bench put the parties on notice that the petition will be heard finally and will be decided at admission stage and thereby, continued the interim order. Thus, the petition is placed before us and we heard this petition alongwith other two petitions, which involve similar question at this stage. We make it clear that in present petition, the petitioner has not challenged the constitutional validity of the Securitization Act, the petitioner has only challenged the action of the bank of issuing notice to recover the amount as per the certificate issued U/s 101 of the M.C.S. Act, which is pending before this Court. The petitioner during pendency of this petition has filed Civil Application No.6994/2004, seeking to challenge the subsequent action taken by the Bank during pendency of this petition. The Bank has re-issued notice U/s 13(2) of the Securitization Act on 12.5.2004 which is at Exh. D of the Civil Application. As we are hearing the petition finally as per the order passed by the Bench on 29th October 2004, will consider the Civil Application also alongwith the petition.

4.In this petition most of the facts are not disputed. The contention pressed in service by Shri Salunke, learned counsel for the petitioner is that the bank is precluded from taking two proceedings simultaneously for the same purpose and allowing the bank to have two proceedings for the same purpose is impermissible under Therefore, he submitted that the proceedings taken pursuant to the notice U/s 13(2) of the Securitization Act, are required to be set aside as bank has proceeded to recover the amount as per the Certificate U/s 101. Shri Salunke, further submitted that the action taken by the Bank U/s 101 and consequent steps thereto are challenged by the petitioner in independent petition and said petition is pending before this Court and this Court has stayed the action of the Bank. He submitted that so long as the stay granted by this Court is in operation, the Bank may not be allowed to continue to use the special procedure provided U/s 13(2) of the Act. Shri Salunke, learned counsel for the petitioner in order to substantiate his contention has placed reliance on the judgment of the Apex Court in case of Andhra Pradesh State Financial Corporation vs. M/s. GAR Re-Rolling Mills and another reported in A.I.R. 1994 Supreme Court 2151.

5.Per contra, the learned counsel Shri Adwant, appearing for the Bank has vehemently opposed the contention by submitting that the petitioner may not be allowed to take inconsistent pleas. He pointed out by referring to the petition filed by the petitioner being writ petition No.1152/ 2004, inter alia stating that the petitioner in that petition challenged the very jurisdiction of the authorities under the Cooperative Societies Act to issue certificate of recovery U/s 101 of the M.C.S. Act. He submitted that the contention was taken on the backdrop of the fact that the question whether on commencement of the recovery of debt due to the Banks and Financial Institutions Act, (Act No.51 of 1993) (hereinafter referred to as Act of 1993), the authorities under Cooperative Societies Act and the Courts established therein have no jurisdiction to issue certificate U/s 101.

Shri Adwant, pointed out that the question that authorities under Cooperative Societies Act, have no jurisdiction stands concluded by the Full Bench judgment of this Court in the case of Narendra Kantilal Shah vs. Joint Registrar Cooperative Societies (Appeal) Bombay reported in 2004 (1) Maharashtra Law Journal 704. Therefore, he submitted that the petitioner cannot be heard by this Court, as the petitioners at one stage have challenged the very authority and jurisdiction of the Cooperative authorities, the Court and now the petitioner is insisting that this Court should interfere in the notice issued U/s 13(2) of the Securitisation Act, as the Bank has taken two simultaneous remedies. It is stated at the bar that the judgment rendered by the Full Bench in the case of Narendra, is pending for consideration before the Apex Court and the Apex Court has stayed the judgment of the Full Bench. Be that as may, the fact remains that in view of the interim relief granted by this Court in W.P.No.1152/04 the Bank cannot proceed to recover an amount as per the certificate. Therefore, Shri Adwant, submitted that the proceedings or action taken U/s and 13(2) of the Act is a special extraordinary mode and remedy provided under the Securitisation Act to the Bank to recover the outstanding amount due and payable to the Bank from the borrower. That remedy is availed. and there is no embargo on the Bank to proceed with the action u/s 13 of the Securitisation Act.

6.Shri Adwant, placed strong reliance on the Constitution Bench judgment of the Apex Court in case of Mardia Chemicals Ltd. and others Vs. Union of India and others reported in 2004 (IV) Supreme Court Cases 311. Shri Adwant, also contended that there is no bar either under the M.C.S. Act or under Securitisation Act, prohibiting the Bank not to proceed under both enactments. Shri Adwant, submitted that the Securitisation Act, being a special legislation passed with an intention to recover the money from borrower without intervention of the Court, as such the bank is at liberty. to proceed u/s 13 of the Securitisation Act. Shri Adwant, learned advocate contended before us that even assuming for the sake of argument that M.C.S. Act and Securitisation Act are both special laws, still the Securitisation Act has overriding effect over all other laws in force at the relevant time. This being the position, he Submitted the steps taken by the Bank for issuance of notice u/s 13 of the Securitisation Act, to be just and proper. To substantiate this contention Shri Adwant, brought to our notice the judgment of the Apex Court in case of Allahabad Bank vs. Canara Bank and another reported in 2000 (4) Supreme Court Cases 406. Shri Adwant, then submitted that as the Bank is authorised u/s 13 of the Securitisation Act, has resorted to take action U/s 13(2) of the Securitisation Act. He submitted, it is the choice of the creditor to adopt a remedy and the borrower cannot force or contend that the creditor bank should adopt only one remedy. He pointed out that the law declared by the Apex Court in Andhra Pradesh State Finance Corporation (supra) in fact, supports the contention of the Bank and it is not helpful to the petitioners. He therefore, submitted that unless there is specific bar imposed under the statute, the Bank is free to proceed to recover its dues and this Court hearing this petition will be very slow in interfering in action of the Bank.

7.In reply, Shri Salunke, also relied on the judgment of the Apex Court in M/s. Shree Camundi Mopeds Ltd. us. Church of South India Trust Association, Madras reported in AIR 1992 Supreme Court 1439. Shri Salunke, repelled the contention of Shri Adwant, contending that when this Court stayed the action of the Bank i.e. taken under M.C.S. Act, this Court will not permit the Bank to proceed U/s 13(2). He contended and prayed that the Bank should be directed to abandon the proceeding U/s 13(2) as the action of the Bank U/s 101 is stayed by this Court. He brought to our notice the term "abandon" defined in Law Lexicon 1997 by P. Ramnath Iyer. He, therefore, submitted that when the matter is sub judice in this Court, the Bank may not be permitted to proceed under Securitisation Act. We will test rival contentions on the backdrop of the facts as most of the facts in this writ petition are admitted, those are :

(a) The petitioner borrowed loan from the Bank, the Bank obtained certificate U/s 101 of M.C.S. Act.

(b) The petitioners challenged the said certificate by raising a dispute U/s 91 of the M.C.S. Act, in which the petitioners failed;

(c) The Bank proceeded to take steps for recovery of amount as per the certificate, the proceedings are stayed by this Court.

8.The facts in Writ petition No.1071/2004.

The petitioners are heirs and legal representatives of Kashinath Murlidhar Patil, who has borrowed the loan from the Bhusawal Peoples Cooperative Bank Ltd., Bhusawal (hereinafter referred to as the Bank). The Bank had issued notice U/s 13(2) of the Securitisation Act on 20.11.2003. On 29.11.2002 the Bank published a notice U/s 13(2) of the Act. The said notice is addressed to the petitioners stating therein that they are heirs of deceased Kashinath and they were called upon to pay an amount of Rs.26,91,929/- on the date of notice. On receipt of the notice the petitioners submitted their reply on 29.12.2003 denying besides the validity of the notice, their liability to pay the amount on various grounds. It was stated in the reply that the notice is unfair and based on incomplete and incorrect information and instructions. It is stated that the notice is nothing but an abuse of process of power given to the Bank under the Securitisation Act. It was stated that the claim was already adjudicated by the Assistant Registrar Cooperative Societies, who refused to issue certificate on 20.11.1997. It is stated that the notice is issued suppressing all these facts. It is stated that the Bank has taken steps to obtain certificate U/s 101 of M.C.S. Act from the Assistant Registrar Cooperative Societies, but the Assistant Registrar, rejected the demand of the bank, hence the Bank cannot adopt special procedure prescribed U/s 13(2) of the Securitisation Act. Bank is precluded to adopt this remedy. The petitioners have specifically denied that they had any contract or there is any privity of contract between the petitioners and Bank.

It is stated that the claim made in the notice is barred by limitation, on the ground the original borrower namely Kashinath died on 19.11.1989 and the Assistant Registrar Cooperative Societies has refused the request of the Bank to issue certificate U/s 101 vide order dated 20.11.1997 as such notice given on 20.11.2003 is illegal as the Bank in the guise of notice U/s 13(2) is trying to recover a time barred debt, They also contended that the issuance of notice is barred by principles of res judicata. Further, they contended that the impugned notice is given to the legal heirs who are not borrowers within the meaning of Securitisation Act. Hence, they contend that the Bank cannot proceed against the persons who are not borrowers and therefore, they contended that the notice is bad and not maintainable and Bank should withdraw the said notice. It was also contended that the notice was vague and it did not disclose the details required U/s 13(3) of the Securitisation Act. They have further contended that the Bank has filed a dispute U/s 91 before the Cooperative Court, Jalgaon against the guarantor and the heirs of deceased borrower for recovery of Rs.12,00,000/- and that dispute is still pending. It is stated that the heirs are contesting those proceedings before the Cooperative Court and the reply is given without prejudice to the defence, raised in the dispute U/s 91. They also contended that many entries in the Bank Register maintained by the Bank regarding Interest etc. are false and bogus. They contended that the Interest as charged is not in consonance with the law declared by the Apex Court.

They further challenge the notice on the ground that the land on which the factory stands is mortgaged with M.I.D.C. Jalgaon as MIDC Jalgaon is necessary party, is not party to the notice, hence the notice is bad. They also denied that they have acknowledged any liability as alleged in the notice. Therefore, it is contended that for the reasons stated in the reply notice, the notice U/s 13(2) should have been withdrawn by the Bank by their letter dated 2.1.2004, requested the Bank to stay the proceeding of taking possession and to withdraw the notice and not to take any steps U/s 13. As the Bank has not taken any cognizance of the reply, the petitioner approached this Court by filing writ petition. Initially the writ petition was lodged at the principal seat of this Court at Mumbai on 20.1.2004 they sought following reliefs :

"a) that this Hon'ble Court be pleased to issue an appropriate writ, order or direction striking down the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

b) in the alternative to prayer clause (a) above, striking down section 9, 13, 15, 19, 34, 35, 41 and 42 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

c) that this Hon'ble Court be pleased to issue an appropriate writ, order or direction quashing the notice dated 20th November, 2003 addressed by Respondent No.2 to the Petitioners;

d) that pending the hearing and final disposal of the present petition, this Hon'ble Court be pleased to restrain Respondent No.2 its officers, servants and any person claiming through or under them from, in any manner;

(i) acting under or pursuance of the powers conferred by Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

(ii) in furtherance or in implementation of notice dated 20th November, 2003 issued by Respondent No.2 to the Petitioners in any manner whatsoever."

As this petition was lodged at Bombay and numbered as W.P.No.225/2003. The petition was heard for motion hearing by the Division Bench on 28.1.2004. The Bench while hearing the matter found that the cause of action has arisen in Jalgaon District, therefore, the petition ought to have been lodged before Aurangabad Bench of this Court. The Division Bench directed the Registry to transfer the proceedings to Aurangabad Bench. This Court directed the Bank not to take possession of the assets for a period of 10 days. Accordingly, the writ petition was transferred to this Court and renumbered as 1071/2004. Before this Bench, the matter was heard at motion hearing on 10.2.2004. This Court issued notice for admission returnable in one week and passed further order which reads thus :

"2. By an ad interim order, we direct the respondent bank not to take possession of the house property of the petitioners, till the returnable date. if the possession is not already taken."

Thereafter, this petition was heard on 26.2.2004 and on that day the learned counsel appearing for the Bank stated before this Court that possession of the property was already taken over by the Bank before passing of the ad-interim order. This Court further observed:

"2. Shri V.D. Hon further submits that, till further orders, the property, of which possession has been taken over by the bank, after issuing notice under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, will not be alienated or, in any other manner, transferred."

After service the matter was heard by the Division Bench on 20.4.2004 and it remained part heard. That Bench, continued to further hearing but however, on change of Roster, the hearing could not be concluded. Thereafter, the writ petitions were placed before the another Division Bench of (Coram : A.B. Naik and N.H. Patil, JJ.) as per the roster. The writ petition was placed for hearing on 12.7.2004 and one of the learned Judge of the Bench (N.H. Patil, J.) directed that the petition be not listed before him. Accordingly, the petition was not heard by that Bench. Then it was placed before the another Division Bench on 29th October 2004 and the petition adjourned to 8.12.2004 by putting the parties on notice that the petition will be heard and finally decided at admission stage. In this way, the matter is placed before us..

9.We heard this petition alongwith connected writ petitions and hearing of the petitions remained part heard from 17.2.2005 till 2.3.2005.

10.When this petition was called out for hearing Shri Hon, learned counsel for the respondent Bank raised a preliminary objection that the petition is not maintainable as the action sought to be impugned is, the action taken by the Bank under Securitisation Act, which is not a State or other authority within the meaning of Article 12 of the Constitution of India and therefore, the petition is not maintainable. Shri Hon, pointed out that the entire petition based on challenges to the validity of Securitisation Act. Shri Hon, pointed out by referring to various contentions raised in the petition that only pertains to challenges to the Constitutional validity of the Securitisation Act and on this basis main attack and the relief are against the validity and ancillary relief, they sought to seek only interim reliefs which relates to the notice issued and action taken by the bank u/s 13 of the Securitisation Act. He pointed out that so far the Constitutional validity of the Act is concerned, the issue stands finally concluded by the judgment of the constitution Bench of the Apex Court in Mardia Chemicals Ltd., (supra), now it will not be open for this Court to hear the petition on the points and challenged the validity. Hence, he contend that the petitioner has virtually become infructuous for that matter, which requires to be dismissed as such.

11.Shri Hon, learned advocate by alternate submission contend efficacious alternate remedy provided to the petitioners to raise all contentions as available by moving the Tribunal established under Act of 1993, as provided U/s 17 of the Securitisation Act. He therefore, submitted that the present petition requires to be rejected as not maintainable on this ground. Shri Hon, pointed out that the petitioners themselves have raised a contention in the body of the petition that the writ petition against the Bank is not maintainable but as they have challenged the constitutional validity, the petition is filed in this Court. Shri Hon, further pointed out that when the petition was entertained, the matter was sub-judice before the Apex Court, and as the Apex Court was seized of the challenges, on that basis the present petition was filed and entertained by this Court. Shri Hon, brought to our notice averments in the petition regarding pendency of the matter before the Apex Court. Shri Hon, brought to our notice the contention raised by the petitioner in ground No."aa", and stated that the petition against the Bank is not maintainable. Shri Hon, has brought to our notice the another judgment of the Apex Court, wherein the question as to whether the cooperative society is State or other country fell for consideration and Apex Court held that no writ lies against the society. Shri Hon, placed reliance on the judgment of the Apex Court in General Manager, Kisan Sahkari Chini Mills Ltd., Sultanpur, U.P. Vs. Satrughan Nishad and others reported in A.I.R. 2003 Supreme Court Weekly 5291 = equivalent to 2003 (8) Supreme Court Cases 639 and submitted that the writ petition is not maintainable, it has to be rejected as such.

12.Per contra, Shri Shah, learned senior counsel instructed by Shri Girish Rane, regarding the maintainability of the petition contended that the petition maintainable as the Bank has issued notice U/s 13(2) of the Act to the petitioners who are not the borrowers within the meaning of Section 2 sub-section (f). He submitted that the Bank is trying to recover the dues from the persons with whom there is no privity of contract. Therefore, he submitted that when the Bank takes such illegal, unlawful and coercive action against them, petitioners had only remedy to approach this Court by invoking the extra ordinary jurisdiction of this Court under Article 226 of the Constitution of India, and this Court can entertain the petition. Shri Shah, learned senior counsel relied on the judgment of the Apex Court in case of A. Umarani Vs. Registrar, Cooperative Societies and others reported in 2004 AIR Supreme Court Weekly 4462 and submitted that the action of the Bank can be challenged in the writ petition. Shri Shah, further submitted that the petitioners have no alternative efficacious remedy provided under the Act. He submitted that filing an appeal before the Tribunal tinder 1993 Act is merely illusory, as Bank has already taken possession of the property and petitioner has to surrender to the Bank and the Bank may sell the property which the Bank has taken in possession. Shri Shah, submitted that though the Apex Court has upheld the constitutional validity of the Act, certain points of challenges were not before the Apex Court. Before the Apex Court, though entire Act was challenged but the Apex Court itself in para 79 of the judgment has referred certain aspects which are not answered.

On the basis of the said observation, Shri Shah, submitted that on the facts of this case, the working of Section 13 may be considered by this Court and he submitted that admittedly notice is issued to the heirs at Shri K.M. Patil, the original borrower. The petitioner No.1 the guarantor and she is liable only to the extent of guarantee of contract executed by her with the Bank, Therefore, he submitted that without considering this contention and bearing in mind this factual aspect, the Bank hurriedly took drastic action U/s 13(2) which is per se illegal. Therefore, he submitted that on the facts of this case, the writ petition, is maintainable, as the action of the Bank is per se illegal and erroneous and is colourable exercise of power and which is being taken to recover the time barred debt. Shri Shah, further submitted that the action of the Bank is barred by limitation and he submitted by referring to Section 36 of the Securitisation Act that the provisions of the limitation Act are applicable and therefore, he submitted that the notice itself is beyond limitation and therefore, he submitted that the Bank cannot proceed to take steps for recovery of loan U/s 13(2) of the Securitisation Act. He also submitted that the petitioner are not the borrowers as defined under the Act as there is no privity of contract, as such no action can lay against the petitioners. Shri Shah, submitted that the term borrower is not used under the Securitisation Act in general terms. The definition is restricted only to the categories which are referred to in the definition. Shri Shah, submitted that the Bank issued the notice on the assumption that the petitioners have acknowledged the dues. He submitted that the so-called acknowledgment as relied upon by the Bank is no acknowledgement in the eye of law and that will not give any benefit to the Bank to save the limitation.

13. Shri Shah, further submitted that the notice itself is bad as it is vague, as it has not referred to the details as required U/s 13 of the Act. He further submitted that the Bank has suppressed several aspects in the notice such as rejection of the application by the Assistant Registrar, Cooperative Societies for recovery certificate U/s 101, filing of the dispute U/s 91. Shri Shah, therefore, submitted that on the facts which are brought on record, the Bank cannot proceed to recover the amount against the petitioners stating therein that they are borrowers. He further submitted that in view of refusal of Certificate U/s 101 and the pendency of dispute U/s 91 before the Cooperative Court, the Bank cannot take the action U/s 13(2) of the Act. He submitted that the Bank at the same time cannot take simultaneous proceedings for recovery of the amount by adopting a general remedy under the General Act i.e. M.C.S. Act and the special remedy given to the Bank under the Securitisation Act. Shri Shah, then submitted that the application for recovery certificate filed by the Bank stands rejected by the Registrar who has jurisdiction U/s 101 to issue or refuse certificate and a person aggrieved by the order of the Registrar U/s 101 has only remedy to challenge the order by filing application U/s 154 of the M.C.S. Act. The senior counsel submitted that admittedly the order passed by the Assistant Registrar Cooperative Societies Jalgaon, is not challenged and it has become final and conclusive. For this purpose, Shri Shah, brought to our notice the provisions of Section 101 of the M.C.S. Act. Shri Shah, further elaborated this contention by contending that the certificate granted by the Registrar under subsection (1) or (2) of Section 101 is final and conclusive proof of arrears stated therein. On the basis of this provision, Shri Shah, contended that when the Registrar has rejected the application in the year 1997, the only course open for the Bank to challenge the said order by moving an application for revision U/s 154 of the M.C.S. Act. He submitted that as the request of the Bank has been finally rejected, the Bank now shall be precluded from proceeding with the drastic remedy provided under the Securitisation Act.

14.Per contra, Shri Hon, learned advocate submitted that the order rejecting the application for certificate U/s 101 by the Bank is not an order on merit. The Registrar has refused the certificate an the ground that certificate which is sought to be obtained by the Bank against the heirs of the deceased member (borrower) are not members of the society. Shri Hon, submitted that the application for recovery of certificate U/s 101 of the M.C.S. Act is required to be filed against the members, therefore, the certificate was refused. He submitted that rejection of the application is not a certificate U/s 101 of the Act. Shri Hon, stated that the finality and the conclusiveness is given under sub-section 3 of Section 101 to the certificate and not to the order of rejection of application. Shri Hon, submitted that what is made final and conclusive proof of arrears stated in the certificate and not to the order of rejection of the application. Shri Hon, further submitted that rejection of application filed by the Bank U/s 101 of the M.C.S. Act by the Registrar is neither a judgment nor a decree, nor on merit he has rejected the claim of the Bank, as such it will not operate as res-judicata. He contended that there is no specific bar created in any of these enactments, barring the bank from proceeding U/s 13 sub-section 2 of the Securitisation Act. Shri Hon, therefore, submitted that unless there is specific a bar created or imposed under the Securitisation Act or M.C.S. Act, from initiating action U/s 13(2) of the Securitisation Act, it is always open for the Bank to proceed to recover the amount which is legitimately due and recovered from the borrower.

In respect of the challenge on the point of limitation as raised by the learned senior counsel, Shri Hon, submitted that the heirs of deceased Kashinath Murlidhar Patil have acknowledged the liability, to repay the outstanding loan not only that but they have repaid some amount due and payable out of the loan obtained by deceased Kashinath Murlidhar Patil to the Bank. Therefore, the question of limitation on facts brought on record has become redundant and academic. Shri Hon, further submitted that as the petitioners. have succeeded to the interest of late Shri Kashinath Murlidhar Patil as heirs and legal representatives, it is their obligation to repay the loan obtained by deceased father. He submitted that it is not the contention of the petitioners nor any plea is raised before any authority that the said loan is obtained by Shri Kashinath Murlidhar Patil for some immoral or illegal purpose. He referred to the document executed by Shri Patil, in favour of the Bank to substantiate the contentions. On the basis of these documents, Shri Hon, submitted that the mortgage executed and loan borrowed by Shri Kashinath Murlidhar Patil was as a Karta of the Joint Hindu family and as such the heirs and legal representatives and the successor of the deceased, it is their obligation to repay the dues to the Bank. Shri Hon, further submitted that the Bank by issuing notice U/s 13(2) is enforcing the security against the secured interest that is the property on which the security of interest is created qua the property. He pointed out that the documents to indicate the properties on which the security is created by deceased Kashinath Murlidhar Patil, those documents are annexed alongwith the affidavit-in-reply. He therefore, submitted that what is being enforced is the security and as the petitioners are in possession and had a control over that security and security assets for which the action is being taken to realise the outstanding amount.

15.Shri Hon, brought to our notice various definitions such as borrower as defined in clause (f) of Section 2; Secured Assets defined in clause (zo), security, interest as defined in clause (zf) of Section 2. Besides this, Shri Hon, also placed reliance on the provisions of section 35 and 37 of the Act and he submitted that the Securitisation Act has overriding effect on any statutes which are in operation. Shri Hon, stated that efficacious remedy is available to the petitioner by challenging the action of the Bank by moving the Tribunal created under 1993 Act. He submitted that the Securitisation Act now stands amended by the Ordinance called "The Enforcement of Security Interest and Recovery of Debt Laws (Amendment) Ordinance. The Ordinance came into force on 11.11.2004. By the said Ordinance the proviso of Section 17 of the Securitisation Act, providing appeal are modified. Instead of phrase "may prefer appeal", now it has to be read, "may make an application". He submitted that the petitioners have to apply to Debt Recovery Tribunal, as constituted under 1993 Act and take all these contentions before it.

He submitted that the question regarding limitation, validity of notice acknowledgement of liability, whether any loan is repaid or-not etc. are essentially the questions of fact to be decided with the evidence that may be produced by the parties before the Tribunal. He submitted that the question of limitation is not always a question of law in strict sense, the question is mixed question of law and facts and that is required to be decided by the Tribunal which has jurisdiction to decide all questions on the basis of evidence that may be placed on record. He therefore, submitted that as the contentions so advanced by Shri Shah, learned senior counsel are essentially the questions of facts which cannot be gone into by this Court in a petition filed under Article 226 or 227 of the Constitution of India. Therefore, he submitted that the petition is liable to be dismissed basically on two grounds; i) that the petition is not maintainable as the Bank is not State or other authority within the meaning of Article 12 of the Constitution of India; (ii) several disputes questions of facts are required to be gone into.

16.Shri. Hon, placed before us the document showing that after death of their father K.M. Patil, his heirs i.e. present petitioners have paid some amount, obviously thereby acknowledging the dues. They had not raised any objection earlier, inter alia, stated that they are not liable to repay the loan. Shri Hon, brought to our notice the mortgage/ hypothecation deed, executed by late Shri K M. Patil and laid emphasis on the following portion occurred in the said document

"Sadar karjache fedisati mi va maze varasdar aani sthavar jagam estate jababdar aahe. "

17.Shri Hon, submitted that the hypothecation deed executed on 6th Oct, 1986 (annexed at page 85 of the paper book) clearly states that the loan is taken for the purpose of erecting the factory on the plot obtained by him in MIDC area. Shri Hon submitted that the loan obtained by him to erect the factory was for the benefit of the entire family. Shri Hon submitted that in the registered deed, late Shri K. M. Patil, specifically mentioned that the mortgage has been executed for and on behalf of the joint family. Therefore, he submitted that the petitioners Nos.2 to 4 and their mother petitioner No.1 are the borrower within the meaning of the term "borrower". Shri Hon, brought to our notice the agreement of hypothecation of movable property, executed by late Shri K.M. Patil which reads thus :

"This Agreement made at Jalgaon on this 6th day of October 1987 between Kashinath Murlidhar Patil (hereinafter called "The Borrowers (which expression shall wherever the context shall admit include his/their heirs executors & administrators, successors & Assigns) of the First Part and The Bhusawal Peoples Cooperative Bank Limited, a Bank Registered under the Bombay Cooperative Societies Act (Act VII of 1925), as amended by the Maharashtra Cooperative Societies Act 1960 having its Registered Office at Station Road, Bhusawal, 425 201, hereinafter called "The Bank" (which expression shall wherever the context shall admit include the Successors and the Assigns of the Bank) of the Second Part And Whereas the borrower/s being members/s of the Bank has/have requested the Bank to grant accommodation by way of Overdraft/ Cash Credit/ Loan on the security thereof and the Bank has agreed to grant such accommodation upto a limit of Rs.5,00,000.00 it is hereby agreed as per annexure on page No.6."

18.Basing his arguments on these two documents, Shri Hon, submitted that the mortgage and hypothecation deeds have been executed by late K.M. Patil as the Karta/Manager. of the family. Therefore, he submitted that the notice which is given to the petitioners was valid. He submitted that it is nowhere disputed, either before the Bank or in this petition, that there was any partition in the family of late K.M. Patil. It is not stated either in the petition or in answer to the notice that the debt which is obtained was for some immoral purpose. He submitted that the parties are governed by the Hindu law. Therefore, it is specifically referred to in the notice that the petitioners had an obligation to repay the amount of loan obtained by late K.M. Patil and the loan was obtained for the purpose of erecting and running the Industrial Unit known as "Kaushal Engineering". He, therefore, submitted that it will not be open for the petitioners, now, to contend that there is no privity of contract between the Bank and the borrowers. He submitted that the petitioners after death of K.M. Patil have, in fact, admitted by the communication dated 27.1.2003 their liability to repay the loan; not only that, they expressed their willingness to have onetime settlement. The said document is produced on record at Exh.R-3. Shri Hon, already pointed out that the mother of the petitioners and wife of late Shri K.M. Patil has also executed a mortgage on the same day accepting the liability and stood as guarantor to the said mortgage amount. The said document is produced on record at Exh. R1.

On the basis of this document, Shri Hon submitted that the notice which was issued was legal proper and valid as the petitioners were borrowers of the Bank. He submitted that the definition of borrower given in the Securitization Act will have to be construed so as to mean and include the petitioners, in the present case, in view of the specific document executed by Late K.M. Patil, while executing the mortgage. He submitted that the debt is obtained by Patil for the overall development of the family and, therefore, the petitioners are under pious obligation to repay the loan. In view of this aspect, Shri Hon submitted that notice was rightly given, by pointing out that they are under an obligation to repay the loan. It is submitted that it is true that within a span of two years from the date of execution of the mortgage, K M Patil died and petitioners succeeded to his interest and, as such, it was their prime responsibility and obligation to repay the loan as they have succeeded to the estate of the deceased K.M. Patil as the heirs and successors in Hindu Law.

19.Facts in Writ Petition No.2009/2004 Before we note down the facts. we make one aspect clear that this petition is filed by, the petition challenging the notice issued by the Bhusawal Peoples Cooperative Bank Ltd., Bhusawal. This petition was lodged in this Court on 16.3.2004. On 24.3.2004 the Division Bench (Coram: R.M.S. Khandeparkar and V.G.Munshi, JJ.) issued notice to respondents and directed the parties to maintain status quo in relation to the subject matter. On 22.4.2004 it was placed before the same Bench for admission. Accordingly, the Bench adjourned to 28.4.2004 and thereafter, the matter could not be heard by the said Bench. Writ Petition was again moved for admission. At that time according to roster the Bench hearing the writ petitions consist of (Messrs A.B. Naik and N.H. Patil, JJ.) on 10.8.2004 a note/praecipe was filed by the petitioner as Patil, J. is not hearing the matters in which Bhusawal Peoples Cooperative Societies Bank is party. The Bench directed not to place the writ petition before a Bench in which N.H. Patil. J. is a party however, it appears that on record it was rioted that the writ petition shall be placed before the Bench consisting of A.B. Naik and N.H. Patil. JJ. Obviously. it was wrong note by the office. As one of us (A.B. Naik, J.) has no occasion to be an advocate of Bhusawal Peoples Cooperative Bank Ltd. Bhusawal, and he had hardly any objection to hear the matter. As we have placed other two petitions for hearing which involves identical question, this petition is also directed to be placed before us. When the matter was called out, it was noticed the above discrepancy in the noting of the office and S/Shri Hon, and Kulkarni, learned counsel stated that the Bank nor the petitioner has any objection if the matter is heard by Bench. Accordingly, we proceeded to hear this petition also.

20.The facts are not much in dispute. That the petitioners have obtained loan from Bhusawal Peoples Cooperative Bank Ltd. and executed a mortgage deed. The Bank moved Cooperative Court, Jalgaon by submitting an application U/s 91. Initially the Cooperative Court, Jalgaon passed an award. The petitioners borrowers moved the Cooperative Appellate Court by filing appeal being Appeal No.140/2002. The Cooperative Appellate Court by the judgment and order dated 17.12.2002 allowed the appeal by setting aside the award passed by the Cooperative Court. While allowing the appeal, the Cooperative Appellate Court directed the appellants i. e. the petitioners in this petition to deposit an amount of Rs.25,64,903/- with the Bank within three months from the date of the order. On failure, the appellate Court directed the Cooperative Court to pass preliminary award. It is informed at the Bar, on remand the matter is pending before the Cooperative Court. It is also stated before us by the learned counsel appearing in the matter that the petitioners and the Bank had challenged the order passed by the Cooperative Appellate Court but this Court declined to entertain both the petitions and rejected the petitions by directing the petitioners to settle the matter with the Bank. Be that as it may, the proceeding stands as it is, before the Cooperative Court.

21.The Bank on 25.11.2003 issued notice U/s 13(2) of the Securitisation Act calling upon the petitioners to repay the amount as stated in the notice about Rs.46,68,015=90. On receipt of the notice the petitioners on 26.12.2003 filed their reply pointing therein that the proceedings are pending before the Cooperative Court and the dispute is to be heard finally and it was stated that the Bank cannot take two proceedings. It was brought the notice, also the judgment and order passed by the Cooperative Court and the order passed by this Court. It was stated that the notice issued does not disclose these facts and therefore, notice is bad. With the observation and the contentions those are raised in the reply to the notice which is made part of the paper book Exh. J, the petitioners have denied their liability and questioned /the validity of the notice. The petitioners thereafter, approached this Court by filing this petition. In the meantime, the Bank has taken possession of the immoveable properties and issued possession notice as required under Appendix 8(1) of the Rules.

The main challenges in the petition, to the constitutional validity of the Act, the learned counsel Shri S.A. Kulkarni, fairly stated that in view of the judgment of the Apex Court in Mardia Chemicals, the petitioners did not wish to press the challenges. However, Shri Kulkarni, contended that notice issued U/s 13(2) is bad and illegal as the Cooperative Court which is competent Court to decide the dispute is seized of the matter, and in view of this undisputed fact, the Bank should not be allowed to proceed with the notice U/s 13(2) of the Act. He submitted that there are several discrepancies in the claim put forth by the Bank. Shri Kulkarni, pointed out that by the order passed by the Cooperative Appellate Court, the amount of Rs.25,64,903/- was determined as interim award, still the questions of interest etc. are to be gone into by that Court. Shri Kulkarni, pointed out from the notice that exorbitant interest has been levied and charged by the Bank and demanded that amount which according to the learned counsel is contrary to Constitution Bench judgment of the Apex Court in Central Bank of India vs. Ravindra and others reported in A.I.R. 2001 Supreme Court Weekly 4468. Shri Hon, learned counsel appearing for the Bank has raised similar contentions which he has raised in contesting the petition i.e. W.P. No.1071/ 2004, hence it is not necessary for us to reproduce those contentions.

22.Shri Nitin Choudhary, learned Standing counsel for the Union of India, on merit did not raise any contention because the Union of India has no concern with recovery etc. The learned counsel submitted that as the validity of the Securitisation Act is challenged, in these petitions he is making submissions to show that the challenge does not survive any more. Shri Nitin Choudhary, submitted that once the Apex Court decides the validity of the Act, it will not be open for the parties to set challenges on some different ground/point or for that purpose, the High Court to consider the validity of the Act once again. To substantiate his contention Shri Chaudhary, relied on few judgments of the Apex Court in case of Anil Kumar Neotia and Others vs. Union of India and others reported AIR 1988 Supreme Court 1353. Shri Choudhary, brought to our notice the observation of the Apex Court made in para 18 of the judgment. Further judgment which he has relied on is again that to the Apex Court in case of Director of Settlements A.P. and others Vs. M.R. Apparao and another reported A.I.R. 2002 Supreme Court 1598 and lastly, the judgment of Suganthi Suresh Kumar Vs. Jagdeeshan reported in A.I.R. 2002 Supreme Court 681. So far as proposition enunciated in these judgments the same cannot be doubted. We entirely agree with the contention advanced by Shri Chaudhary, that once the Apex Court decides the validity of a particular enactment, High Court in its jurisdiction under Article 226 of the Constitution of India, cannot again reconsider the challenges. We therefore, accept the contention of Shri Chaudhary, that it will not be permissible for this Court to consider the challenges which were finally concluded by the judgment of the Apex Court.

23.the validity of the securitisation act was challenged before the Apex Court and the Apex Court has upheld the Constitutional validity except it declared sub-section 2 of Section 17 of the Act as ultravires of Article 14 of the Constitution of India, but after the judgment of the Apex Court, Section 17 came to be amended by the Ordinance. In view of the change in law, brought by the Ordinance, we may not go on to consider submissions of the parties regarding availability of the alternate remedy as provided U/s 17(2) of the Act. In our view, by virtue of amendment in Section 17 brought by the Ordinance, the party has a remedy to approach the Tribunal by filing application before it. We may also refer to orders passed by the Division Bench in W.P. No.4251/2003 decided on 5.3.2004 and W.P. No.2166 of 2003 decided on 20.7.2004, wherein the question arose before the Division Bench regarding the availability of the alternate remedy to the parties against whom the action is taken by the Bank U/s 13(2) of Securitisation Act.

24.So far as the constitutional validity of the Act is concerned, it is no more res integra, in view of the constitution Bench judgment of the Apex Court in the case of Mardia Chemicals Limited and others vs. Union of India and others, reported in 2004 (Vol. IV) SCC 311. Here we will not advert those challenges, as is impermissible for this Court to ponder on the challenges.

25.The learned counsel for the petitioners still tried to raise the contentions regarding validity of the Securitisation Act. In respect of these challenges in our view, it will not be open for this Court to ponder on those contentions once again, in view of the law declared by the Apex Court in Mardia Chemicals (supra), Anil Kumar, Director Settlement and Suganthi Suresh Kumar (supra). Hence, we proceed to consider other contentions raised by the respective counsel.

26.In Writ Petition No.1152/2004 filed by petitioner Shri Ghan Shamdas who is also a petitioner in W.P. No.3075/2004, obtained loan from the Bank. As the borrower has failed to repay the loan in accordance with the terms and conditions, the Bank has no alternative but to have recourse to the remedy provided under the "MCS Act". Undisputedly the bank adopted that proceeding before Securitisation Act. The Bank secured an award/certificate under the relevant provisions of the "MCS Act". The action of the Bank was challenged by the borrower's by moving the Court/ Authority under the "MCS Act", but without success. Then the borrower approached this Court by filing a petition being Writ Petition No.1152/ 2004 challenging the jurisdiction of the Court/authority under M.C.S. Act, contending that on coming into force the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short "the Act of' 1993). The authorities /Court/ Tribunal under the "MCS Act" have no jurisdiction and the Bank had only remedy i.e. to proceed under Securitisation Act or Act of 1993. We make it clear at this stage itself that the Full Bench of this Court in the case of Narendra Shah (supra) has held that from the date of enforcement of the Act of 1993, the jurisdiction lies with the Tribunal under the Act of 1993 and the Court or authorities under the "MCS Act" have no jurisdiction to proceed with the claim of the Bank. As Narendra's case (supra) rendered by the Full Bench of this Court is under the seisin of the Apex Court; whereas the Apex Court has granted Special leave and the judgment is stayed.

Relying on this judgment of Full Bench, the Writ Petition filed by the borrower was admitted and the proceeding of recovery of award/certificate issued under the "MCS Act", was stayed by this Court. Therefore, so far as this Petition is concerned, the additional question, we have to consider is, whether the petitioner can be allowed to take divergent pleas that in view at the proceedings initiated and to challenge the action taken by the Bank under the "MCS Act", or the Bank is precluded from proceedings under the Securitisation Act as contend now before us. At one stage, the plea is taken by the petitioner that the authorities under the "MCS Act" have no jurisdiction to proceed for recovery of the amount and at the same time the contention is being advanced in this petition that the Bank is precluded from proceeding with the recovery under the Securitisation Act. We repel this contention at the threshold itself so far as this petition is concerned, for the obvious reason that the petitioner has approached this Court under the jurisdiction conferred on this Court by Art. 226 of the Constitution of India, and the petitioner being borrower cannot be allowed to take a divergent plea which may suit his convenience and stall the recovery of legal dues by the bank. We repel this contention on the facts of this case, in view of the judgment of the Apex Court in case of A.P. State Financial Corporation (supra) to which will refer in detail the later part of this judgment.

27.Now we have to find out, whether the Bank can be permitted to proceed to take action under the Securitisation Act and when the Bank has taken recourse to the remedy under M.C.S. Act. For this purpose, we will refer to some of the provisions of the securitisation act. We first refer to the statement of Objects and Reasons for enacting the Securitisation Act, which reads as under :

"The financial sector has been one of the key drivers of India's efforts to achieve success in rapidly developing its economy. While the banking industry in India is progressively complying with the international prudential norms and accounting practices there are certain areas in which the banking and financial sector do not have a level playing field as compared to other participants in the financial markets in the world. There is no legal provision for facilitating securitisation of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institutions. Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government for the purpose of examining banking sector reforms have considered the need for changes in the legal system in respect of these areas."

28.The Act is passed with the above-said object, with a view that liquidity of the finances and flow of money is essential for any healthy and growth-oriented economy, and more particularly when the Act is passed after Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government, We need not go into other aspects, in view of the Constitutional validity of the Act which are now finally concluded by the Apex Court judgment in Mardia Chemical's case (supra). We have to consider in these petitions, whether two remedies under different statutes can be resorted to by the Bank.

29.A great deal of submissions were made before us by referring not only to various provisions of the securitisation act, but also the provisions of the Indian Contract Act. Civil Procedure Code, Transfer of Property Act, etc. The main thrust of the learned counsel is on the principle of "fairplay" in adopting the remedy by the Bank which is more onerous than other remedies provided under the other statutes. The counsel for the petitioners went on to say that the Securitisation Act is highly loaded in favour of the Banks and the financial institutions. In other words, it is submitted that the Securitisation Act gives an unfair advantage to the Banks and the non-banking financial institutions which have rendered financial assistance to the persons like petitioners. It was submitted that the Act has provided a shortcut method to realise the dues without any ascertainment. The counsel termed the Securitisation Act as "Draconian Legislation". It is submitted before us that by action taken by the Banks u/s 13, no option is left with the petitioners than to surrender to the demand by the Bank. It was, therefore, submitted that once the procedure under general law is adopted, then, the Bank/financial institutions must be injuncted not to proceed under the Securitisation Act. In other words, the learned counsel contended that simultaneously, the Banks cannot adopt two remedies, and if that be so it will be like "riding two horses at a time." Let us consider whether the remedy u/s 13 can be allowed to be taken by the bank, once the Bank either obtains an award/section 91 certificate U/s 101 of the M.C.S. Act or proceeds with filing of dispute u/s 91 of the "MCS Act" which may be pending or concluded in favour of the Bank or against the Bank.

It is to be noted that the Securitisation Act is enacted with the avowed purpose indicated hereinabove and has given the Banks a special remedy to enforce the security interest. The term "security interest" has been defined in Section 2(zf). Sub-sec (1) of Section 2 defines "financial asset". The term "borrower" is defined under clause (f) of Section 2. It is not disputed before us that all the petitioners are the principle borrowers, except the petitioners in Writ Petition No.1071/2004 (petitioner No.1 is the guarantor), where the other petitioners are the successors/heirs and legal representatives of borrower. It is also not disputed before us that there is failure on the part of the borrowers to repay the loan and the bank having ascertained the same, has classified the assets as non-performing assets. The main contentions that are advanced revolve round the section 31, 35 to 37 of the Securitisation Act. Section 35 says that "the provisions of this Act to override other laws" and Section 37 says "that application of other laws not barred". It is contended on behalf of the Bank that the Bank is enforcing the security to recover its dues as the Bank has rendered the financial assistance to the petitioners. It is contended by the learned counsel for the Bank that there is no bar imposed, either under the Securitisation Act or under the "MCS Act" to proceed with the recovery of unpaid dues by adopting the procedure U/5 13 of Securitisation Act. It was contended that the Securitisation Act is passed with sole intention as to enable the Banks to recovery the amount as expeditiously as possible without intervention of the Court. Therefore, a special right is created in favour of the Banks or financial institutions to adopt the speedier remedy of recovering the amount which otherwise would have taken years together. It is contended by the learned counsel for the Bank that the Bank has issued notice as required u/s 13 for enforcement of security interest, to the petitioners as, according to the Bank, they are liable to pay. (So far as Writ Petition No: 1071/2004, we record submissions of the learned counsel of the Bank at a later stage).

30.It is submitted before us by the learned counsel for the Bank that on service of the notice to the borrower as required under sub-section (2) of Section 13, the borrower is under an obligation to comply with the notice, failing which the creditor Bank shall be entitled to exercise its right to enforce the security interest as per the provisions of Sub-Section 4 of Section 13 of the Act. The learned counsel for the Bank vehemently submitted that the petitioners without availing the remedy as contemplated u/s 17 of the R.D.B. Act have rushed to this Court, aborting the action of the Bank. It is contended by the learned Counsel for the Bank that adopting remedy u/s 13 of the Act is a special remedy provided under the statute and the Bank can enforce the security interest without the intervention of the Court or the Tribunal and the enforcement of the security interest has to be done in accordance with the provisions of the securitisation act. Therefore, the learned counsel for the Bank submitted that it is a choice of the creditor to prosecute the legal proceedings or to adopt special right created under the Securitisation Act. The learned counsel submitted that it does not lie in the mouth of the borrowers to insist or direct the creditor to adopt the remedy under general law i.e. "MCS Act" to recover the amount, which may suit the borrowers and prolong the recovery, if this is allowed then the borrowers will drag the bank for number of years and the bank may not be able to recover a single farthing.

Ultimately, the learned counsel contended that the Act was enacted with a definite object of "recovering outstanding dues from the borrower at earliest" so that the Banks or Financial Institutions can run smoothly and can lend financial assistance to the needy borrower in future. If the huge amount is locked for long period, then it is possible that the Bank/financial institutions will have to go in liquidation. It is submitted that there is no scope left open for this Court now as the Apex Court has answered all the questions, raised in this petition. The Apex Court in Mardia Chemical's case (supra) has answered almost all the questions. It is, therefore, submitted by the learned counsel for the Bank that the borrower cannot take a plea at one stage that the authorities or Court/ Tribunal under the "MCS Act" have no jurisdiction to entertain the applications filed by the Bank and at the same time raise the contention before this Court that the Bank/ financial institutions shall not be permitted to enforce the security interest u/s 13 of the Act.

31.The learned counsel for the Bank draws our attention to the provisions of Section 91 and 101 of the "MCS Act". He submitted that this Court in Narendra's case (supra) has already held that the jurisdiction of the Cooperative Court and the authority under the "MCS Act", is ousted from the date when the Act of 1993 came into being. Therefore, he submitted that as Section 13 creates special right in favour of the Banks and the financial institutions, the Bank/financial institutions have a choice to recover and enforce the security which is beneficial to it. Therefore, he submitted that the Bank has favour of the Bank has rightly proceeded to exercise its right given in favour of the Bank by Section 13. Shri Adwant, learned counsel for the Bank, contended that Sections 35 and 37 are clear answer to the contentions advanced by the petitioners. He submitted that the Securitisation Act has a overriding effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or Any other instrument having the effect, by virtue of any such law. He submitted that Section 35 has given overriding effect over other laws notwithstanding inconsistency in other laws i.e. therewith.

He submitted that relying on Section 37 of the Securitisation Act that the provisions of Securitisation Act are in addition to and riot in derogation of provisions of any other law for the time being in force. He submitted that a combined reading of Section 34, 35 and 37 on backdrop of the special mode made available to the bank to recover the dues. Hence, there is no bar or restriction on the bank to proceed u/s 13 of the Securitisation Act. (We will refer to these sections in later part of the judgment. Therefore, Shri Adwant, submitted that action for enforcement of the security provided under the Securitisation Act is just and proper. It is choice of the creditor to adopt the remedy which is speedier and not the borrower to insist that the creditor/Bank/financial institution should proceed only under one Act. He, therefore, submitted that the Bank or the Financial Institution has full liberty to adopt a speedier, efficacious, remedy to recover dues. The learned Advocate submitted that there is ample protection given under the Act to the borrowers to redress their grievances by applying to the Tribunal, in the light of the observations made by the Apex Court on Mardia Chemical's case (supra). He contend that if the huge outstanding dues are not recovered by the Bank/ Financial institution by a special and speedier method, and they were asked to adopt the remedy which will not yield immediate result and it takes number of years to get the amount. In such situation, the bank/financial institutions will become bankrupt and has to go under liquidation which will adversely affect not only the interest. of the Bank/Financial institutions, but also needy and honest borrowers. He, therefore, submitted that the petitioners may not be allowed to seek a relief under the Constitutional jurisdiction of this Court. We find great force in this contention.

32.From the submissions those are advanced by the respective Counsel appearing in the matter, the following points emerged for our consideration

(i) Whether the Bank can adopt the remedy provided under section 13(2) of the Securitisation Act, particularly when the Bank has already initiated the proceedings under Maharashtra Cooperative Societies Act, 1960 (for short

"MCS Act"

)

(ii) Whether the Bank can be allowed to adopt both the remedies simultaneously Points Nos.1 and 2: Yes.

(iii) Whether the action of enforcing the security can be taken against the heirs and successors of the borrowers as there is no privity of contract between the heirs of the borrowers and the Bank. Yes.

(iv) Whether the Bank can adopt the remedy provided to it, under section 13 when the authorities under the "MCS Act" rejected the prayers of the Bank for issuance of certificate u/s 101 of the "MCS Act" ... Yes.

(v) Whether writ petitions are maintainable against Banks which are cooperative societies registered under M.C.S. Act and also on the point of efficacious alternate remedy under Securitisation Act/D.R.T. Act. No.

(vi) Additional point in W.P. No.1017/2004 whether the notice issued to the heirs /successors of the borrower is within limitation. ...Not decided.

Before considering the points, we will now refer to some of the provisions of Securitisation Act, for purpose of testing the submissions.

"13. Enforcement of security interest:- (1) Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or tribunal, by such creditor in accordance with the provisions of this Act:.

(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4).

(3) The notice referred to in subsection (2) shall give details of the amount payable by the borrower and the secured assets intended to the enforced by the secured creditor in the event of nonpayment of secured debts by the borrower.

(4) In case the borrower fails to discharge his liability in full within the period specified in subsection (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:

(a) take possession at the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured assets:

(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 realise the secured asset;

(c) appoint any person (hereafter referred to as the manager), 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.

(5) Any payment made by any person referred to in clause (d) of sub-section (4) to the secured creditor shall give such person a valid discharge as if he has made payment to the borrower.

(6) Any transfer of secured asset after taking possession thereof or take over of management under sub-section (4), by the secured creditor or by the manager on behalf of the secured creditor shall vest in the transferee all rights in, or in relation to the secured asset transferred as if the transfer had been made by the owner of such secured asset.

(7) Where any action has been taken against a borrower under the provisions of sub-section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall. in the absence of any contract to the country, be held by him in trust to be applied, firstly, in payment of such costs, charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests.

(8) If the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor, and no further step shall be taken by him for transfer or sale of that secure asset.

(9) In the case of financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured creditors, no secured creditor shall be entitled to exercise any or all of the rights conferred on him under or pursuant to subsection (4) unless exercise of such right is agreed upon by the secured creditors representing not less than three forth in value of the amount outstanding as on a record date and such action shall be binding on all the secured creditors :

Provided that in the case of a company in liquidation, the amount realised from the sale of secured assets shall be distributed in accordance with the provisions of Section 529-A of the Companies Act, 1956 (1 of 1956) :

Provided further that in the case of a company being wound up on or after the commencement of this Act, the secured creditor of such company, who opts to realise his security instead of relinquishing his security and proving his debt under proviso to sub-section (1) of Section 529 of the Companies Act, 1956 (1 of 1956), may retain the sale proceeds of his secured. Assets after depositing the workmen's dues with the liquidator in accordance with the provisions of section 529-a of that Act:

Provided also that liquidator referred to in the second proviso shall intimate the secured creditor the workmen's dues in accordance with the provisions of Section 529-A of the Companies Act, 1956 (1 of 1956) and in case such workmen's dues cannot be ascertained, the liquidator shall intimate the estimated amount or workmen's dues under that section to the secured creditor and in such case the secured creditor may retain the sale proceeds of the secured assets after depositing the amount of such estimated dues with the liquidator:

Provided also that in case the secured creditor deposits the estimated amount of workmen's dues, such creditor shall be liable to pay the balance of the workmen's dues or entitled to receive the excess amount, if any, deposited by the secured creditor with the liquidator:

Provided also that the secured creditor shall furnish an undertaking to the liquidator to pay the balance of the workmen's dues, it any.

Explanation :- For the purposes of this sub-section

(a) "record date" means the date agreed upon by the secured creditors representing not less than three fourth in value of the amount outstanding on such date : (b) "amount outstanding" shall include principal, interest and any other dues payable by the borrower to the secured creditor in respect of secured asset as per the books of account of the secured creditor.

(10) Where dues of the secured creditor are not fully satisfied with the sale proceeds the secured assets, the secured creditor may file an application in the form and manner as may be prescribed to the Debts Recovery Tribunal having jurisdiction of a competent court, as the case may be, for recovery of the balance amount from the borrower.

(11) Without pre-judice to the rights conferred on the secured creditor under or by this section, the secured creditor shall be entitled to proceed against the guarantors or sell the pledged assets without first taking any of the measures specified in clauses (a) to (d) of subsection (4) in relation to the secured assets under this Act.

(12) The rights of a secured creditor under this Act may be exercised by one or more of his officers authorised in this behalf in such manner as may be prescribed.

(13) No borrower shall, after receipt of notice referred to in sub-section (2), transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor."

"35. The provisions of this Act to override other laws: The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law."

"37. Application of other laws not barred: The provisions of this Act or the rules made thereunder shall be in addition to and not in derogation of the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force."

33.Now we will test the contentions advanced by the learned counsel before us in the light of provisions of Sections 13, 35 and 37 of the Securitisation Act. Section 13 envisages that before taking any action for enforcement of security interest, the Bank/ financial institution has to issue a notice under sub-section ( 2) of Section 13 of the Act. The notice issued, shall contain the details of the amount payable by the borrower and security asset intended to be enforced by the Bank, in the event of non-payment of debt by the borrower. Thus, reasonable time is given to the borrower to comply the notice failing which the Bank/ financial institutions is at liberty to take recourse as contemplated under sub-section (4) of section 13. After this action is taken, the borrower is provided with a remedy to approach the Tribunal constituted under the Act of 1993 as contemplated under sections 17 and 18 of the Securitisation Act. Therefore, there is sufficient protection given to the borrower by the Act against action taken by the Bank. The borrower/s is/are at liberty to raise all the contention available before the Tribunal and seek appropriate relief.

34.As per action 35 and 36 as quoted above, the provisions of the securitisation act shall be in addition to and not in derogation to any other provisions of any other law for the time being in force. Having noticed the observations of Apex Court in Mardia Chemical's case (supra), having due regard to the scheme of the Act and the object and the purpose for its enactment, the purpose sought to be achieved is to enforce the security interest and to recover the outstanding debts, the provisions are required to be interpreted broadly and positively and purposefully in the context of the intention of the legislature in proper perspective by giving broad meaning to special power given to the Banks. Section 13 seeks to provide remedies under the Securitisation Act in addition to the other remedies provided under the other Act, unless there is a clear and specific bar imposed either in the Securitisation or Special Act, prohibiting the Bank/financial institution from not proceeding with both remedies. The term "enforcement of Security interest" in the title the Act furnishes key to the mind of the makers of the Act. In fact, the law meets a situation and provide a right in favour of the Bank and financial institution to recover the dues from the borrower as it is non-performing asset where huge amount is locked due to nonpayment of dues which has greatly affected the economy of this country. Various legislations have virtually failed to achieve the goal of recovery of the amount speedily from the borrowers, because of the lengthy and long-drawn process and the procedure of the Courts and the Tribunals provided under various Acts which, to some extent, helped unscrupulous elements and the Bank and the financial institutions virtually became helpless. The exiting machinery under the ordinary law, either does not move or it moves inefficiently, for the reasons which are not necessary to be stated.

35.We have noticed the special provisions made under the Securitisation Act which creates a framework for speedy recovery of the dues and an attempt has been made to remove the existing slow pace of machinery of the ordinary courts, Tribunal system and the Act being the special piece of legislation enacted with the object to recover the outstanding dues in order to help the growth of economy of our country and in this way it is a benign legislation not only in the public interest but also in the national interest and, thus, requires liberal construction in favour of the Bank/ Financial institutions. The Act was brought into force with specific object which was spelt out in the reports of the Committees to which we have made just a passing reference somewhere in the earlier part of this judgment. The Securitisation Act is brought into force with a view to protect the financial area as the ordinary law for all intent and purport has become either illusory or failed to achieve the desired object. Keeping in view the observation made by the Apex Court in Mardia Chemical's case (supra) and observations of ours, stated hereinabove, in our view, it is always open for the Bank to choose the speedier remedy to recover its dues.

Thus, we are of the considered view that inspite of the proceeding taken under the "MCS Act", it is always permissible for the Bank to proceed u/s 13 of the Securitisation Act and as it is a special legislation created for the purpose of speedy recovery of the amount which was borrowed from the Bank or financial institution. This Act is enacted to regulate the Securitisation and Reconstruction of Financial Assets and enforcement of Security Interest. Therefore, even if the bank has adopted a remedy under general law, but from the enforcement of the Securitization Act which came into force on 21st June 2002, the Bank/ financial Institution has a right to proceed u/s 13 of the Securitisation Act, notwithstanding the fact that the Bank has adopted other proceedings under the "MCS Act" or any other ordinary law. There is no question of any prejudice that is being caused to the borrowers, because admittedly the borrowers have borrowed the amount from the bank and for some reason or the other, either by the situation or with some ulterior motive they have not repaid the amount borrowed from the Bank and, therefore, in our opinion, if the Bank chooses and adopts a speedier and efficacious remedy though it may sound onerous, still it is open for the Bank to proceed under the Securitization Act. Therefore, the provisions of the Securitization Act are to be construed accordingly to give effect to the object and purpose of the Act. Sections 35 and 37 envisage that the provisions of the Securitization Act are in addition to and are not in derogation of any other law for the time being in force.

The contention that the words

"shall be in addition and not in derogation of the provisions of any other law for the time being in force"

could be given proper meaning and the effect arid if the proceeding u/s 13 of Securitisation Act are to be stayed or declared illegal, that will go against the very purpose for which the Securitisation Act is enacted. Therefore, the contention that the Securitization Act purports to operate in derogation of the provisions of other Acts is not well-founded and cannot be accepted. It is to be noted that the legislators are well aware of the provisions of the other enactments operating in the field and the Legislature correctly appreciates the needs of its own people. It lays down its law which are directed to problems made manifest by the experience. The Court while considering the contentions of the parties have to interpret the statute and must refer to legislative judgment in the matter relating to socio and economic policies and must not interfere unless the exercise of the legislative judgment appears to be palpably arbitrary. (See 1991 4 SCC Page 675).

36.Viewed from this aspect and the fact that the Securitization Act came into force from 21st June 2002 which has given specific right to enforce the securities even though there exist in ordinary law/ provision to recover the dues, it is always permissible to allow the Bank to ripe the fruits of their rights given to them by the statute, such as, section 13 of the securitization act. Therefore, in our considered view, the contention advanced by the Advocate of the petitioners cannot be accepted when they contend that the Bank at one and the same time cannot avail the remedy provided to them under different acts.

37.We have to consider this aspect from another angle. The remedy provided to the Bank under the "MCS Act" is with the intervention of the Authorities/ Court or Tribunal created under the M.C.S. Act but Section 13 of the Securitisation Act is enacted giving special right to the Banks/ financial institutions to enforce the security interest without the intervention of the Court or the Tribunal. Therefore, additional right is given to the Banks/ Financial Institutions to enforce the security and to recover the dues by taking steps in accordance with the provisions of the Securitization Act. Therefore, in our opinion, even though the Authorities under M.C.S. Act, Cooperative Court, Tribunal have entertained the proceedings, if those are decided, still it will be open for the Bank or the Financial Institutions to enforce their right of enforcing the security interest, as provided u/s 13 of the Securitisation Act. Section 13 of Securitisation Act has created a specific right in favour of the financial institutions/ Banks to enforce the security. Therefore, if the Bank or the financial institution takes resort to Section 13 of the Securitisation Act, we find that the banks and financial institutions can prosecute and proceed to enforce the security under the Securitization Act.

38.We now refer to the judgments which are cited by the learned counsel for the petitioners in support of their contentions:

The learned counsel for the petitioners have placed strong reliance on the judgment of the Apex Court reported in Andhra Pradesh State Financial Corporation Vs. M/s. GAR Re-Rollino Mills and another reported in A.I.R. 1994 Supreme Court 2151, to substantiate their contentions that the Bank cannot proceed to take measures of recovery of amount by two proceedings. The facts in case of Andhra Pradesh State Financial Corporation (supra) require to be noted. The Apex Court was dealing with two matters arising out of the Full Bench judgment of the Andhra Pradesh High Court. The question that was posed by the Apex Court for its consideration is stated by Hon'ble Dr. Anand, J., (as then His Lordship was). The common question of law which arises in these appeals by Special Leave is whether the financial Corporation set up U/s 3 of the State Financial Corporation Act (hereinafter referred to as Act) is entitled to take recourse to the remedy available to it U/s 29 of the Act, even after having obtained an order or a decree after invoking provisions of Section 31 of the Act, but without executing that decree or order?" After noticing the facts the Apex Court answered the question in following manner:

"15. The Doctrine of Election clearly suggests that when two remedies are available for the same relief, the party to whom the said remedies are available has the option to elect either of them but that doctrine would not apply to cases where the ambit and scope of the two remedies is essentially different. To hold otherwise may lead to injustice and inconsistent results. Since, the Corporation must be held entitled and given full protection by the Court to recover its dues it cannot be bound down to adopt only one of the two remedies provided under the Act. In our opinion the Corporation can initially take recourse to Section 31 of the Act but withdraw or abandon it at any stage and take recourse to the provisions of Section 29 of the Act, which section deals with not only the rights but also provides a self-contained remedy to the Corporation for recovery of its dues. If the Corporation chooses to take recourse to the remedy available under Section 31 of the Act and pursues the same to the logical conclusion and obtains an order or decree, it may thereafter execute the order or decree, in the manner provided by Section 32(7) and (8) of the Act. The Corporation, however, may withdraw or abandon the proceedings at that stage and take recourse to the provisions of Section 29 of the Act. A'decree'under Section 31 of the Act not being a money decree or a decree for realisation of the dues of the Corporation, as held in Gujarat State Financial Corpn. v. Naatson Mfg. Co. P. Ltd. recourse to it cannot debar the Corporation from taking recourse to the provisions of Section 29 of the Act by not pursuing the decree or order under Section 31 of the Act, in which event the order made under Section 31 of the Act would serve in aid of the relief available under Section 29 of the Act."

"16. The doctrine of election, as commonly understood, would, thus, not be attracted under the Act in view of the express phraseology used in Section 31 of the Act, viz., "without prejudice to the provisions of Section 29 of this Act, While the Corporation cannot simultaneously pursue the two remedies, it is under no disability to take recourse to the rights and remedy available to it under Section 29 of the Act even after an order under Section 31 has been obtained but without executing it and withdrawing from those proceedings at any stage. The use of the expression "without prejudice to the provisions of Section 29 of the Act" in Section 31 cannot be read to mean that the Corporation after obtaining a final order under Section 31 of the Act from a court of competent jurisdiction, is denuded of its rights under Section 29 of the Act. To hold so would render the above-quoted expression redundant in Section 31 of the Act and the courts do not lean in favour of rendering words used by the Legislature in the statutory provisions redundant. The Corporation which has the right to make the choice may make the choice initially whether to proceed under Section 29 of the Act or Section 31 of the Act, but its rights under Section 29 of the Act are not extinguished, if it decides to take recourse to the provisions of Section 31 of the Act. It can abandon the proceedings under Section 31 of the Act at any stage, including the stage of execution, if it finds it more practical and may initiate proceedings under Section 29 of the Act."

"17. The relief available to the Corporation under Section 29 of the Act to realise its dues in the manner prescribed therein is wider in scope than the limited reliefs available to it under Section 31 of the Act and is not controlled by Section 31 of the Act. The Legislature clearly intended to preserve the rights of the Corporation under Section 29 of the Act by expressly stating in Section 31 of the Act, that its recourse to action under that section is without prejudice to the provisions of Section 29 of the Act. What alone is not desirable or permitted by the Act is to pursue both the remedies simultaneously by the Corporation and not that it cannot withdraw or abandon the proceedings initiated under Section 31 at 'any stage' and then take recourse to the provisions of Section 29 of the Act. Any interpretation which frustrates the right of the Corporation to recover its dues must be eschewed. Similarly, if in a given case, the Corporation has taken recourse to the provisions of Section 29 of the Act, there is no bar for it without taking those proceedings to their logical conclusion to abandon them and approach the court under Section 31 of the Act to seek one or more of the reliefs available to it under that section. Where, the defaulting party fails to honour the order or decree of the Court made under Section 31 of the Act, it has neither any legal nor even a moral right to object to the Corporation from taking recourse to the provisions of Section 29 of the Act only on the ground that it has obtained a proper relief under Section 31 of the Act which relief it does not wish to pursue any further. Indeed, if the order of the court issued under Section 31 of the Act has been fully complied and honoured with by the defaulting concern, no occasion would arise for to invoke the Corporation the provisions of Section 29 of the Act. However, to hold that since the Corporation has initially taken action under Section 31 of the Act and obtained an order/decree from the Court, the Corporation is prohibited from invoking the provisions of Section 29 of the Act. However, to hold that since the Corporation has initially taken action under Section 31 of the Act and obtained an order/ decree from the Court, the Corporation is prohibited from invoking the provisions of Section 29 of the Act, notwithstanding the fact that the defaulting concern has not honoured the court's order or decree made under Section 31 of the Act, would amount to putting premium of the activities of the defaulting concern aimed at frustrating the order/decree of the court and depriving the Corporation of recovering its legitimate dues and thereby rendering the expression "without prejudice to "....... occurring in Section 31 otiose. Courts do not favour such a course."

"The Apex Court in term held that the doctrine of election cannot be enforce, it is concluded "The doctrine of election, as commonly understood, would, thus, be attracted under the Act in view of the express phraseology used in Section 31 of the Act. Therefore, the Apex Court on the terminology used U/s 29 and 31 of the Financial Corporation Act, did not grant any relief to the borrowers. On the contrary, the Apex Court went on saying that there is no equity in favour of defaulting party which may justify interference by the Courts. The Apex Court in para 18 of the said judgment made following observations:

"18. There is no equity in favour of a defaulting party which may justify interference by the courts in exercise of its equitable extraordinary jurisdiction under Article 226 of the Constitution of India to assist it in not repaying its debts. The aim of equity is to promote honesty and not to frustrate the legitimate rights of the Corporation which after advancing the loan takes steps to recover its dues from the defaulting party. Thus, the intention of the Legislature in using the expression "without prejudice to the provisions of Section 29 of the Act" clearly appears to be that recourse to the provisions of Section 29 of the Act is riot prohibited, where an order or decree under Section 31 of the Act obtained by the Corporation has not been complied with or honoured by the defaulting concern or is otherwise insufficient to satisfy the dues of the Corporation and the Corporation withdraws and abandons to pursue further proceedings under Section 31 of the Act. Passing a money decree for recovery of the outstanding dues, not being within the jurisdiction of the court under Section 31 of the Act, the Corporation retains its right to recover its dues by invoking the provisions of Section 29 of the Act in the manner prescribed therein notwithstanding any order, final or interim, obtained by it under Section 31 of the Act by withdrawing from and abandoning those provisions at any stage of the proceedings. A court of equity, when exercising its equitable jurisdiction under Article 226 of the Constitution must so act as to prevent perpetration of a legal fraud and the courts are obliged to do justice by promotion of good faith, as far as it lies within their power. Equity is always known to defend the law from crafty evasions and new subtleties invented to evade law. Since, the Legislature enacted Sections 29 and 31 with a view to aid the Corporation to recover its legitimate dues etc. from the defaulting -party, the saving clause in Section 31 of the Act, preserving the rights under section 29 of' the act by giving tip the pursuit under Section 31 at any stage of the proceedings is available to the Corporation. The two provisions must be so harmonised as to facilitate the Corporation to recover its dues from the defaulting party. The Act was enacted by Parliament with a view to promote industrialization and offer assistance by giving financial assistance in the shape of loans and advances etc. repayable in easy installments. The Corporation has to recover -the loans and advances, so as to be able to give financial assistance to other industries and unless it recovers its dues, the money will not remain in circulation for long. It is with this end in view that Parliament gave the Corporation the right to proceed under Section 31 of the Act, preserving at the same time its rights and remedy under Section 29 of the Act, so that the Corporations are not choked by the defaulting debtors by adopting frustrating or dilatory tactics in the proceedings in the court initiated- under Section 31 of the Act." (Emphasis by us).

"According to us, the ratio laid down in the said judgment in para nos.16 and 17 is of no assistance to the petitioners. On the contrary, the observations made by the Apex Court in para No.18. If considered in its right perspective, support our view. On the basis of the law declared by the Apex Court in Andhra Pradesh State Financial Corporation (supra), the petitions will have to be rejected as the Apex Court in para no.18 has categorically observed that the defaulting borrower has no equity before the Court of law and the Court may not exercise its constitutional jurisdiction conferred on it by Art.226 of the Constitution. Having considered the law declared by the Apex Court in Mardia Chemical's case wherein the Apex Court has upheld the constitutional validity of the Securitisation Apt though the Apex Court in para No.79 of the judgment has made the following observations:

"79. Some submissions have been made pointing out that in certain circumstances it would not be clear as to in what manner the provisions of the Act would be workable. We feel the objections pointed out are not such which render the statute invalid or unconstitutional. Such problems about working of any particular provision of the Act in any particular factual situation, may be considered as and when they may arise. We, therefore, do not think, it necessary to go into those questions."

Keeping in view the above-said observation of the Apex Court, we have to consider the contentions that are advanced before us but, in our opinion, the working of the provisions of Section 13 of the Securitisation Act, are so clear that protects interest of both i.e. Bank/ Financial institution and the borrower. The borrower has an efficacious remedy available as provided u/s 13 sub-section (4) by approaching the Debts Recovery Tribunal u/s 17. The Apex Court, to that extent, has declared the provisions of requirement of depositing the amount as unconstitutional. But, having noticed the Ordinance No.5/05 by which the provisions of the Securitization Act as well as the Act of 1993 has been amended, Now it is always open for the petitioners to approach the Debts Recovery Tribunal by filing an application, as envisaged under that Act and more particularly considering the observations made by the Apex Court in Mardia Chemical s case, in para no.80 of the judgment. We hold that, no prejudice will be caused to the petitioners if the Bank is allowed to enforce its security as envisaged u/s 13 of the Securitisation Act, had the petitioner/s any grievance/s about the case of the bank even legality, propriety and otherwise action of the Bank, there is provision made under the Securitisation Act and 1993 Act, so as to ventilate grievance of the petitioners by approaching the Debts Recovery Tribunal by submitting an application as provided under the provisions of section 19 as amended by the Ordinance. In this view of the matter, we are of the confirmed view that the petitioners cannot make any grievance about the Bank adopting the procedure of enforcing security as contemplated u/s 13 of the Securitisation Act, Therefore, we hold that it is always permissible for the Bank/ Financial Institutions to take recourse to Section 13 of the Securitisation Act, notwithstanding the fact that the Bank has already taken recourse to the usual proceeding for recovery of amount under the "MCS Act" with a rider that if the Cooperative Court or for that purpose the Tribunal has declared the action of the Bank illegal or refused to pass an award or certificate of recovery on merit then, in such a situation the Bank cannot take recourse to section 13 of the securitization act.

39.In the case at hand, particularly in W.P. No.1135/2004 the Bank has obtained an award from the Court/ Tribunal or the authorities under the "MCS Act" but the petitioners have challenged the action of the Bank on the ground that the authorities/ Court/ Tribunal have no jurisdiction to entertain proceedings filed by the Bank. With this backdrop as we have stated earlier, the petitioner has no say in the matter and in particular as observed by the Apex Court, in A.P.S.F.C. (supra) there is no equity in favour of the borrower. Therefore, we turn down the contentions advanced by the learned counsel for the petitioners. Accordingly, we answer point Nos.1 and 2 in affirmative.

40.Now, turning to specific contentions that are advanced by Shri P.M. Shah, learned senior counsel regarding the liability of the heirs of the deceased-borrowers. He submitted that there is no privity of contract between the heirs of the deceased and the petitioners with the Bank as the contract was entered into by the borrower. Shri Shah, drew our attention to the definition of the "borrower" under the Securitization Act. The term "borrower" as per the definition means "any person who has been granted financial assistance; (2) who has given any guarantee; or, (3) created any mortgage or pledge as security of the financial assistance. The learned senior counsel submitted that the petitioners except petitioner No.1 does not fall within the definition of the "borrower". Shri Shah placed reliance on the provisions of the Indian Contract Act, in order to substantiate his contention, more particularly, he draw our attention to Section 67 of the Contract Act. He submitted that the legislature have not defined the term "borrower in exhaustive way. The definition is restrictive and is applicable only to the categories of persons referred to in the Section. He says that the Legislature used the words "means" and not "include". Therefore, the contention of the senior counsel is that the term borrower used in the definition means only the categories of persons who have been granted financial assistance. Shri Shah submitted that admittedly the petitioners have not executed any agreement or entered into any transaction with the Bank. However, the Bank is trying to recover the amount borrowed by their father late Shri K.M. Patil. Therefore, the learned senior counsel submitted that there is no privity of contract between the petitioners and the Bank and as such, the provisions of Securitization Act cannot be brought into service by the Bank by serving the notice u/s 13(2) of the Act.

He brought to our notice that the Bank has accepted in the notice issued u/s 13(2) wherein the Bank has specifically stated that the petitioners are required to repay the amount as they are legal heirs of the deceased borrower, and after death of Shri K.M. Patil, all his heirs have acknowledged the substance of the liability as the loan is obtained by their deceased father. Therefore, he submitted that the question is whether the notice issued to the petitioners is legal and valid is main question to be decided. Apart from this contention, Shri Shah also challenged the validity of the notice, inter alia, contending that the notice is vague and bereft of details. The notice is issued suppressing all material facts, which were within the knowledge of the Bank, such as, rejection of the application of the Bank by the Assistant Registrar and refusal to issue recovery certificate u/s 101 of the Act. Similarly, there no reference to the fact of the dispute that is being filed by the bank u/s 91 of the Act. He contended that the Bank, having suffered an order passed by the Deputy Registrar or Assistant Registrar who refused to issue certificate of recovery u/s 101 of the Act, without reference to this fact the impugned notice is issued, Shri Shah pointed out that section 101 of the "mcs act", which permits the Bank i.e. Cooperative Society to apply for certificate of recovery and that certificate of recovery is final and conclusive. He also submitted that any order passed u/s 101 of the "MCS Act" is subject to challenge u/s 154 of the Act by filing revision before the State Government. Shri Shah pointed out that when the application u/s 101 came to be rejected, the bank has not challenged the said order. Therefore, the order has become final and with this backdrop, he submitted that the Bank is precluded from taking recourse to section 13 of the securitization act. He submitted that the issuance of notice and subsequent taking possession of the property by the Bank is, thus, illegal and without jurisdiction and, therefore, non-est.

41.Per contra, Shri V.D. Hon, learned counsel appearing of. the Bank, vehemently submitted on the facts which are brought on record, which indicate that the petitioner falls within the term "borrower" as the petitioners, after the death of their beloved father have executed certain documents accepting their liability to repay the amount. He submitted that the document of hypothecation and the mortgage deed executed by the late Shri K.M. Patil is not in his individual capacity, but it has been executed in the capacity of Karta/Manager of the Joint Hindu family. Shri Hon, brought to our notice the documents executed by late Shri K. M. Patil wherein he is an unequivocal term executed the mortgage deed which is executed for himself and for and on behalf of the entire family. Shri Hon, also submitted that after the death of late Shri K.M. Patil who was member of the Bank, the properties held by the deceased, were succeeded by the petitioners and, therefore, it will not be acceptable that the petitioners are not liable to repay the amount.

42.From the records produced in W.P.1071/2004 before us, we are of the prima facie view that late K.M. Patil has borrowed the loan in the capacity of the Manager or Karta of the family. Therefore, they are liable to repay the loan amount outstanding. Though definition of "borrower" read as a whole, at the first blush, may support the contention of Shri P.M. Shah, but probing deep in the matter and the facts which are brought on record, we cannot endorse the submission of the learned senior counsel that the term "borrower" will be made applicable only to late K.M. Patil and not to the heirs. We cannot accept the contention of Shri Shah in this behalf and we hold on the facts which are brought on record, that the petitioners are "borrowers". Even under common civil law legal heirs of a debtor or judgment debtor are liable to satisfy the debt of the creditor to the extent of the property to which title is derived by legal heir from on the deceased debtor. Notice u/s 13 of Securitisation Act basically proceeds against the property that was hypothecated by deceased borrower, for recovery of outstanding dues. Therefore, even under common civil law legal heirs of Shri K.M. Patil cannot legitimately object to recovery by attachment and sale of the property which they have derived from deceased borrower. They may be able to resist recovery by modes personally affect them i.e. such as detention in civil prison, in the absence of privity of contract. But they cannot object recovery by proceeding against the property which was bound by contract between bank and borrower and to which L.Rs. have succeeded through borrower.

43.The view which we are taking is well-supported by the judgment of the Apex Court in the case of Venkatesh D. Deshpande vs. Sau. Kusum Kulkarni reported in AIR 1978 SC 1791, wherein the Apex Court was considering the identical situation to which are dealing. The case before the Apex Court arose on the following facts.

44.The appellant before the Apex Court was defendant in a suit filed by Sau.Kusum Kulkarni for recovery of possession of two agricultural lands. During pendency of the suit, some portion of the said land were acquired under the Land Acquisition Act. The plaintiffs and defendants claimed the compensation of the said amount acquired under the Land Acquisition Act. The plaintiffs and defendants claimed the compensation of the amount so determined. A reference u/s 30 of the land Acquisition Act was made for determination of entitlement of the amount of compensation. The Trial Court decreed the suit of the plaintiff. The appeal preferred by the defendant to the High Court was also dismissed, following the decision of the trial Court. The reference u/s 30 of the land Acquisition Act was answered in favour of the plaintiff/ respondent and the defendant preferred First Appeal to the High Court. Both the appeals were heard together and the Division Bench of the High Court by its judgment and order dated 10/11th Oct, 1974 dismissed both the appeals, Thereupon, the aggrieved party approached the Apex Court but facts which are clear from the judgment are thus, one Dattatraya, husband of the plaintiff No.1, and father of the plaintiffs 2 to 6, had borrowed a Tagai loan by making appropriate application to the authorities. The loan was borrowed for construction of well in the agricultural land belonging to the family and the loan was for improvement of the land. The loan was advanced and the borrower failed to repay the amount, as per the stipulations. A revenue recovery proceeding was commenced and as by the sale of the land offered as security the Government could not reimburse itself the total amount outstanding, a proclamation of sale was issued and ultimately the suit lands were auctioned and it was purchased by the defendant and the sale in his favour was confirmed and he was put in possession of the land.

It is stated by the plaintiff that prior to the date of auction there was a partition between the father and his sons on 6th July 1956 and at this partition the suit land with the subdivisions came to the shares of the plaintiffs. Therefore, the father had no saleable interest in the suit land and could not have been sold, at the revenue auction for recovering the personal debt of the father. So contending plaintiffs brought an action for declaration that the sale is not binding upon them and possession may be restored to them. The trial Court held that the suit land was a joint family property consisting of Datttraya and his sons but there was an effective partition prior to revenue sale and the plaintiffs are entitled to be put back in possession. The High Court in appeal by the appellant, held that the auction sale of the lands at the relevant time standing in the names of the plaintiffs, the land being not one in respect of which the Tagai loan was advanced, or which was offered as security for that loan, would not be binding upon the plaintiffs as the plaintiffs were not borrowers within the meaning of S.7(1) of the Loans Act and the plaintiffs suit on this ground was rightly decreed. The submission on behalf of the defendant that the Tagai loan was a debt and that it was incumbent upon the sons of Dattatraya under the doctrine of obligation to pay their father's debt which were not tainted with immorality or illegality was not accepted and the High Court held that the doctrine of pious obligation cannot be extended to the debts contracted under the loans act as the act applies to all citizens of India, irrespective of their religion. With this finding the appeal was dismissed. In appeal before the apex court the same contentions were advanced by the parties and the Apex Court has differed from the view of the High Court and dismissed the suit of the plaintiffs. For our purpose, the following observations of the Apex Court will be useful :

"14. Assuming we are not right in holding that the debt, was for the benefit of the estate of the joint family and, therefore, a joint family debt, and assuming that Mr. Bal is right in contending that it was the personal debt of the father, yet the doctrine of pious obligation of the son to pay the father's debt would still permit the creditor to bring the whole joint family property to auction for recovery of such debts. Where the sons are joint with their father and debts have. been contracted by the father for his personal benefit, the sons are liable to pay the debts provided they were not incur red for an illegal or immoral purpose. This liability to pay the debt has been described as pious obligation of the son to pay the father's debt not tainted with illegality or immorality. It was once believed that the liability of the son to pay the debts contracted by the father, though for his own benefit arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara law to discharge the father's debts, where the debts are riot tainted with immorality, yet in course of time this liability has passed into the realm of law."

"14-A. In Anthonyswamy vs. M.R. Chinnaswamy Koundan, 1970 (2) SCR 648: AIR 1970 SC 223, following the decision in Muttayan v. Zamindar of Sivagiri 1882 (9) Ind App 128 (PC), this Court held that this obligation of the son to pay the father's debt not tainted with illegality or immorality was not religious but a legal obligation and the rule would operate not only after the father's death but even in the father's life time and the pertinent observation is as under : (at p. 227 of AIR SC):

"It is evident therefore that the doctrine of pious obligation is not merely a religious doctrine but has passed into the realm of law. The doctrine is a necessary and logical corollary to the doctrine of the right of the son by birth to a share of the ancestral property and both these conceptions are correlated. The liability imposed on the son to pay the debt of his father is not a gratuitous obligation thrust on him by Hindu law but is a salutary counter balance to the principle that the son from the moment of his birth acquires along with his father an interest in joint family property."

"15. It is not the case of the plaintiffs that the debt contracted by the father for which the property was sold was tainted with illegality or immorality or that it was avyavaharik in the sense opposed to good morals. Therefore, even assuming that there was a partition. the debt being antecedent debt for which no provision was made in the partition and the debt having not been shown to be tainted with illegality or immorality, the sons were liable to pay this debt to the extent the joint family property came in their hands."

"16. Viewed from either angle, the property sold was liable for the discharge of the debt of Dattatraya, the father, and even if it came in the hands of the sons on partition, the debt admittedly being a pre-partition debt not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons."

"17. Mr. Bal, however, raised an interesting contention that if the joint family property which came in the hands of the sons on partition was to be sold for recovery of the debt of the father after partition a suit would have to be filed by the creditor and if the property in the hands of the son was to be made liable for discharge of the debt, the sons ought to be joined as parties to the suit because only in such an event the sons could set up the defence of the debt being tainted with illegality or immorality. Where a revenue sale takes place, it was said, the sons would have no opportunity to contest the character of the debt, and, therefore, any sale in such circumstances, of the property that has fallen to the shares of the sons at a partition, subsequent to the partition would be void as against the sons. In support of the submission reliance was placed on an observation in Pannalal's case ( AIR 1952 SC 170) (supra) that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allotted to the sons and that a separate and independent suit must be filed against the sons before their shares can be reached. After observing that a son is liable even after partition for the pre-partition debts of his father which are not immoral or illegal, this Court proceeded to examine the question as to how this liability is to be enforced by the creditor, either during the life time of the father or after his death. After taking note of a large number of decisions in which it was held that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allocated to the sons on partition and a separate and independent suit must be instituted against the sons before their shares can be reached, it was held that the principle underlying these decisions is sound. This Court approved the decision in Jagnarayan v. Somaji, ILR (1938) Nag 136: ( AIR 1938 Nag 24). It may be noted that decree for the pre-partition debt was made after partition."

"When in the suit father after partition could not represent the sons, This very question again came up before this Court in S.M. Jakati & Anr v. S.M. Borkar, 1959 SCR 1384: (AIR 1959 SC 282). In that case the Deputy Registrar of Co-operative Societies had made an order against Mr. Jakati for realisation of the amount and an itself of property belonging to the joint family of Jakati was attached by the Collector and duly brought to sale under S.155 of the Bombay Land Revenue Code, The sale was held on 2nd February, 1943 and confirmed on 23rd June, 1943. In the meantime. On January 15, 1943, one of the sons of Jakati instituted a suit for partition and separate possession of his share in the joint family property and contended inter alia that the sale in favour of the first respondent was not binding on the joint family. If the order of the Deputy Registrar was, to be treated as a decree, the sale under s. 155 of the Bombay Land Revenue Act being execution of that decree, was after the institution of the suit for partition and therefore it was contended that a partition after the decree but before the auction sale limited the efficacy of the sale to the share of the father even though the sale was of a whole estate including the interest of the sons, because after the partition the father no longer possessed the power to sell the shares of sons to discharge his debts. Negativing this contention it was held as under: (at p.288 of AIR) "But this contention ignores the doctrine of pious obligation of the sons. The right of the pre-partition creditor to seize the property of the erstwhile joint family in execution of his decree is not dependant upon the father's power to alienate the share of his sons but on the principle of pious obligation on the part of the sons to discharge the debt of the father. The pious obligation continues to exist even though the power of the father to alienate may come to an end as a result of partition. The consequence is that as between the sons right to take a vested interest jointly with their father in their ancestral estate and the remedy of the father's creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting up their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable for the debts of the father, Therefore where the joint ancestral property including the share of the sons has passed Out of the family in execution of the decree on the father's debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons attack, because even after the partition their share remains liable."

"18. The High Court while examining the ratio in Jakati's (supra) case observed that even though Ganpatrao Vishwanathappa Barjibhe v. Bilimrao Sahibrao, 52 Bom. LR 154: (AIR 1950 Bom 278), was referred to therein it was not specifically overruled and. therefore. the trial Court was right in relying upon it and incidentally itself relied on it. In that case it was held that in order to make the share of sons liable after partition they should be brought on record. This Court referring to Ganpatrao (1) observed that the decision should be confined to the facts of that case and further observed as under (at p.288 of AIR SC) :

"Therefore where after attachment and a proper notice of sale the whole estate including the sons share, which was attached, is sold and the purchaser buys it intending it to be the whole coparcenary estate, the presence of the sons co nomine is not necessary because they still have the right to challenge the sale on showing the immoral or illegal purpose of the debt. In our opinion where the pious obligation exists and partition takes place after the decree and pending execution proceedings as in the present case, the sale of the whole estate in execution of the decree cannot be challenged except on proof by the sons of the immoral or illegal purpose of the debt and partition cannot relieve the sons of their pious obligation or their shares of their liability to be sold or be a means of reducing the efficacy of the attachment or impair the rights of the creditor."

"21. The loan sought to be recovered was a Tagai loan advanced under the Loans Act. The amount can be recovered as arrears of land revenue, Chapter XI of the Bombay Land Revenue Code provides procedure for realisation of land revenue. recovery to be made as if they are arrears of land revenue and other revenue demands. Section 150 provides that an arrear of land revenue may be recovered inter alia by sale of the defaulter's immovable property under S, 155. Section 155 provides that the Collector may cause the right title or interest of the defaulter in any immovable property other than the land on which the arrear is due to be sold. The sale is subject to sanction and confirmation."

"24. That brings us to the last contention which has found favour with the High Court. The contention is that a loan borrowed under the provisions of the loans act could always be in the individual and personal capacity of the borrower and the Loans Act being applicable to all the communities in this country, it does not admit of a person borrowing loan in his representative capacity as Karta of the joint family and, thereby making joint family property liable for the discharge of the debt. Section 5 prescribes the mode of dealing with' the applications for loans and S. 6 provides for the period for repayment of loans. Then S. 7 which is material, It provides for the mode of recovery of the loans borrowed under the Act. Section 7 reads as under :

"7.(1) Subject to such rules as may be made under section 10, all loans granted under this Act, all interest (if any) chargeable thereon, and costs (if any) incurred in making the same, shall, when they become due, be recoverable by the Collector in all or any of the following modes, namely:

(a) from the borrower-as if they were arrears of land revenue due by him;

(b) from his surety (if any) -as if they were arrears of land revenue due by him;

(c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land;

(d) out of the property comprised in the collateral security (if any)according to the procedure for the realisation of land revenue by the sale of immovable property, other than the land on which that revenue is due :

Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgages of, or persons having charges on, that interest, and where the loan is granted under section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest.

(2) When any sum due on account of any such loan, interest or costs is paid to the Collector by a surety or an owner of property comprised in any collecteral security, or is recovered under subsection (1) by the Collector from a surety or out of any such property, the Collector shall, on the application of the surety or the owner of that property (as the case may be), recover that sum on his behalf from the borrower, or out of the land for the benefit of which the loan has been granted, in manner provided by subsection (1).

(3) It shall be in the discretion of a Collector acting under this section to determine tile order in Which he will resort to the various modes of recovery permitted by it."

"25. The loan can be recovered from the borrower as if it were an arrear of land revenue due by him or from his surety by the same procedure or out of the land for the benefit of which the loan has been granted by following the same procedure or out of the property comprising as collateral security, if any, according to the procedure for realisation of land revenue by sale of immovable property or by the sale of immovable property other than the land on which the land revenue is due. Now the word 'borrower' is not defined. Could it be said that a borrower for the purpose of s. 7 can be an individual and no other person? The High Court observed that the Act is applicable to all communities in India and not merely to Hindus and there are many communities which do not have the system of joint family and if the legislature intended to include in the word 'borrower' manager of a family, it should have said so in express terms. There is nothing in the language of s. 7 which would show that the borrower must always and of necessity be an individual, Even if the Act applies to other communities which do not have the system of joint family, that by itself would not exclude the manager of a joint Hindu family from becoming a borrower under s.7. If the construction as suggested by the High Court is accepted it would put joint Hindu family at a disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer, nor could he take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family. We see no justification for restricting the word 'borrower' to be an Individual alone. In fact the Act itself contemplates joint borrowers."

"Section 9 provides for joint and several liability of joint borrowers. A Karta of a joint Hindu family therefore can be a borrower in his representative capacity. If the Karta of a joint Hindu family is considered eligible for becoming a borrower would it run counter to the position of other communities in which there is no concept of a joint family and joint family properties? In the absence of any such concept a borrower other than a Hindu can offer all the property at his disposal even if he has no sons, as security for the loan to be borrowed because in other communities governed by their personal laws the son does not acquire interest in the ancestral properties in the hand of the father from the time of his birth. But in Hindu law there are two seemingly contrary but really complimentary principles, one the principle of independent coparcenary rights in the sons which is art incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their father's debts not tainted with immorality or illegality, which lays open the whole estate to be seized for payment of such debts (see Jakati's case) (AIR 1959 SC 282). Now, if the sons of a Hindu father take interest in the ancestral property in the hands of the father by the incident of birth. They also incur the corresponding obligation of discharging the debts incurred by the father either for his own benefit or for the benefit of the joint family from the property in which the sons take interest by birth. Such a concept being absent in communities not governed by Hindu law in this behalf, the father would be free to encumber the property and the sons in such communities would neither get interest by birth nor the liability to pay' the father's debt and would not be able to challenge the sale or property for discharge of the debt incurred by the father. Therefore, the expression "borrower" in s. 7 need not be given a restricted meaning merely because the Act applies to all communities."

"Hence a father who is the Karta of the joint family consisting of himself and his sons can become a borrower in his capacity as Karta and if the loan is for legal necessity or for the benefit of the joint family estate he would render the joint family property liable for such debt and if it is for his personal benefit the joint family property even in the hands of the sons would be liable if the debt is not tainted with illegality or immorality. The High Court said that such liability which arises from the obligation of religion and piety cannot be extended to the loans borrowed under the loans Act because there is no such obligation in other communities to which the Act applies. In reaching this conclusion the High Court overlooked the principle that this doctrine of pious obligation is not merely a religious duty but has passed into the realm of law (see Anthonyswamy). ( AIR 1970 SC 223). On the facts of that case this principle was applied to parties belonging to Tamil Vannian Christians. Viewed from this angle, the High Court was in error in holding that Dharmashastras of Hindus never contemplated improvement loans being given by the Governments of the day which were usually monarchies and, therefore, a debt of the kind which is contemplated under the Loans Act could never have been under the contemplation of the writers like Brihaspati and Narada in whose texts the pious liability is imposed on the sons and others. It is not possible to subscribe to this view for the reasons hereinbefore mentioned. The decisions in Sankaran Nambudripad v. Ramaswami Ayyar ILR 41 Mad 691 (AIR 1919 Mad 590) and Chinnasami Mudaliar v. Tirumalai Pillai, ( 1902) ILR 25 Mad 572, do not touch the question herein raised and are of no assistance in the matter."

(emphasis by us)

45.Applying the abovesaid test to the case at hand i.e. W.P. No.1071/2004 and the facts which emerged from the documents produced before us, we have to accept the contention of Shri Hon that the petitioners are the borrowers for the purpose of Section 13 of the Securitisation Act and, therefore, notice was validly issued. We, are, therefore, of the prima facie view that as the petitioners have succeeded the estate of the deceased of late K.M. Patil and the land was obtained by Patil for the purpose of the family i.e. to erect factory at MIDC area, in our opinion, for the purpose of the present petitioners were under pious obligation to repay the loan. Therefore, in such a situation, the contention of Shri Shah that there was no privity of contract between the Bank and the petitioners cannot be accepted as we have noticed that provisions of section 35 and 37 clearly helps the contention of Shri Hon and, therefore, in our opinion, the action taken by the Bank is just and proper. Accordingly, point No.(iii) is answered in affirmative.

46.We have recorded our above conclusion as the learned counsel appearing for the petitioners have made elaborate submissions which compelled us to consider them and to answer.

47.Now we have to find out whether the petition as filed can be entertained by this Court, (i) on the question of maintainability; (ii) on the backdrop of availability of alternative remedy. If we answer this question in favour of the respondent then whatever observations and findings recorded by us may not be considered by the Tribunal in case the petitioners choose to file application/appeal to the Tribunal U/s 17 and 18 of the Securitisation Act. Before we proceed to consider the authorities cited by the learned counsel to substantiate their contention about maintainability of this petition, we may refer to one of the Full Bench judgment of this Court in Shamrao Vithal Cooperative Bank Ltd. and another Vs. Padubidri Pattabhiram Bhat and another reported in 1993 Maharashtra Law Journal 1. The Full Bench of this Court was called upon to consider whether Cooperative Societies registered under the provisions of the Maharashtra Cooperative Societies Act, 1960 and under the Multi State Cooperative Societies Act, 1984 carrying on business of banking and governed by the Banking Regulation Act, 1949 is not "State" under Article 12 of the Constitution of India.

The petitioner before the Full Bench was a Bank registered under the Maharashtra Cooperative Societies as well as Multi State Cooperative Societies Act, 1944 and was carrying on business of Banking and undoubtedly it was governed by Banking Regulation Act, 1949. In the present case also the Bank though, not a Multi State Cooperative Bank but it is a Cooperative Society registered under the Maharashtra Cooperative Societies Act, 1960 and doing the banking business and governed by Banking Regulation Act, 1949. In this aspect, the observation made by the Full Bench of this Court in para 11, 12, 19 would suffice. The Full Bench of this Court held that the Bank is not a State within the meaning of Article 12 of the Constitution of India. We may refer case of General Manager, Kisan Sahkari Chini Mills Ltd., Sultanpur U.P. (supra). The appellant before the Apex Court was a Cooperative Sugar Mill duly registered under U.P. Cooperative Societies Act, 1965. The case relates to a dispute between the society and its workers. The Apex Court considered whether the Cooperative Sugar Mill is other authority within the meaning of Article 12 of the Constitution of India. The Apex Court in para 8 and 9 of the Judgment held thus :

"8. From the decisions referred to above, it would be clear that the form in which the body is constituted, namely, whether it is a society or cooperative society or a company, is not decisive. The real status of the body with respect to the control of Government would have to be looked into. The various tests, as indicated above, would have to be applied and considered cumulatively. There can be no hard and fast formula and in different facts/situations, different factors may be found to be overwhelming and indicating that the body is an authority under Article 12 of the Constitution. In this context, Bye-Laws of the Mill would have to be seen. In the instant case, in one of the writ applications filed before the High Court, it was asserted that the Government of Uttar Pradesh held 50% shares in the Mill which fact was denied in the counter-affidavit filed on behalf of the State and it was averred that majority of the shares were held by cane growers. Of course, it was not said that the Government of Uttar Pradesh did not hold any share. Before this Court, it was stated on behalf of the contesting respondents in the counter-affidavit that the Government of Uttar Pradesh held 50% shares in the Mill which was not denied on behalf of the Mill. Therefore, even if it is taken to be admitted due to non-traverse. the share of the State Government would be only 50% and not entire. Thus, the first test laid down is not fulfilled by the Mill. It has been stated, on behalf of the contesting respondents that the Mill used to receive some financial assistance from the Government."

"According to the Mill, the Government had advanced some loans to the Mill. It has nowhere been stated that the State used to meet any expenditure of the Mill much less almost the entire one, but, as a matter of fact, it operates on the basis of self generated finances. There is nothing to show that the Mill enjoys monopoly status ill the matter of production of sugar. A perusal of ByeLaws of the Mill would show that its membership is open to cane growers, other Societies, Gram Sabha. State Government, etc. and under Bye-Law 52, a Committee of Management consisting of 15 members is constituted, out at whom, 5 members are required to be elected by the representatives of individual members, 3 out of cooperative society and other institutions and 2 representatives of financial Institutions besides 5 members who are required to be nominated by the State Government which shall be inclusive of the Chairman and Administrator. Thus, the ratio of the nominees of state Government in the Committee is only 1/3rd and the management of the Committee is dominated by 2/3rd non-Government member's. Under the ByeLaws, the State Government can neither issue any direction to the Mill nor determine its policy as it is an autonomous body. The State has no control at all in the functioning of the Mill much less deep and pervasive one. The role of the Federation which is the apex body and whose ex. officio Chairman cum Managing Director is Secretary, Department of Sugar Industry and Cane, Government of Uttar Pradesh, is only advisory and to guide its members. The letter sent by Managing Director of the Federation on 22nd November, 1999 was merely by way of an advice and was in the nature of a suggestion to the Mill in view of its deteriorating financial condition. From the said letter, which is in the advisory capacity, it cannot be inferred that the State had any deep and pervasive control over the Mill. Thus, we find none of the indicia exists in the case of Mill, as such the same being neither instrumentality nor agency of Government cannot be said to be an authority and, therefore, it is not State within the meaning of Article 12 of the Constitution of India."

"9. Learned counsel appearing on behalf of the contesting respondents submitted that even if the Mill is not an authority within the meaning of Article 12 of the Constitution, Writ application can be entertained as mandamus can be issued under Article 226 of the Constitution against any person or authority which would include any private person or body. Learned counsel appearing on behalf of the appellant, or the other hand, submitted that mandamus can be issued against private person or body only if infraction alleged is in performance of public duty. Reference in this connection alleged is in performance of public duty. Reference in this connection may be made to the decisions of this Court in Andi Mukta Sadguru Trust and others Vs. V.R. Rudani and others 1989 (2) SCC 691 in which this Court examined the various aspects and distinction between the authority and a person and after analysis of the decisions referred in that regard came to the conclusion that it is only in the circumstances when the authority or the person performs a public function or discharges a public duty that Article 226 of the Constitution can be invoked. In the cases of K. Krishnamacharyulu and others Vs. Sri Venkateswara Hindu College of Engineering and another 1997 (3) SCC 571 and VST Industries Ltd. Vs. VST Industries Workers Union and another 2001 (1) SCC 298, the same principle has been reiterated. Further, in the case of VST Industries Ltd. (supra), it was observed that manufacture and sale of cigarettes by a private person will not involve any public function. This being the position in that case, this Court held that the High Court had no jurisdiction to entertain an application under Article 226 of the Constitution. In the present case, the Mill is engaged in the manufacture and sale of sugar which, on the same analogy, would not involve any public function. Thus, we have no difficulty in holding that jurisdiction of the High Court under Article 226 of the Constitution could under not have been invoked."

Applying the abovesaid test to the facts of this case, the petitioners have challenged the action of the Bank issuing notice U/s 13(2) of the Securitisation Act. As the relation between the petitioner and the Bank is on the basis that the petitioners are the members of the society (ii) They have obtained the loan by executing the mortgage deed, therefore, the relations being contractual one i.e. creditor and borrower. With the back drop of these facts which are not disputed before us, and particularly when the challenges to the Constitutional validity are no more resintegra, in view of the judgment of the Apex Court in Mardia Chemicals, now it is not open for us to entertain these petitions on that Count i.e. challenges to constitutional validity. In our view, the petitions as filed are not maintainable as the Full Bench of this Court in Shamrao Vithal (supra) and the Apex Court in General Manager, Kisan Sahkari Chini Mills Ltd. (supra) held that the Cooperative Society is not a State within the meaning of Article 12 of the Constitution and it is not also other authority within the meaning of Article 12 of the Constitution. Applying the law which is binding on us, we hold that the writ petitions as filed are not maintainable. Besides, maintainability of the petitions on these aspects, otherwise also the petitions involved seriously disputed questions of facts and therefore, it will be improper for the writ Court to exercise the jurisdiction under Article 226 of the Constitution of India, in the peculiar facts of W.P. No.1071/2004, where several disputed facts were pressed in service and the petitioners themselves have contended in the body of the petition that the Bank is not amenable to the writ jurisdiction as it does not fall within the ambit of Article 12 of the Constitution of India. We accordingly hold that these petitions are not maintainable as i) Bank is not amenable to writ jurisdiction, ii) Several serious disputed questions of facts are involved, iii) There is effective efficacious remedy available to the petitioners U/s 17 and 18 of the Securitisation Act, by approaching the Tribunal under 1993 Act.

48.Shri Kulkarni, learned counsel appearing for the petitioner has specifically contended that it was incumbent on the Bank after it receives reply to the notice U/s 13(2) of the Act, the Bank should have communicated the reasons for non-accepting the explanation tendered. Therefore, he submitted by placing reliance on the Division Bench judgment of this Court decided by Nagpur Bench, whereby this Court insisted that the Bank should communicate the reasons in facts of this case. We direct the Bank to communicate the reasons to the petitioners, if not already communicated, for non-accepting their case, so that it will be possible for the petitioners to approach the appropriate forum. We may now refer to the two unreported judgments relied on by Shri Hon, to substantiate his contention regarding maintainability of this petition. W.P. No.4251/2003 is decided by the Division Bench of this Court, one of us (Dabholkar, J.) was party to the said judgment. The Division Bench of the Court was considering identical situation and the point raised in that petition, the Division Bench upheld the contentions of the respondents of maintainability and this Court rejected the petitions to file appeals. The Division Bench made following observations in para 9 :

"9. Ultimately, we hold that the petition is not tenable, in view of alternate remedy available to the petitioners and the respondent Bank is not "State" within the meaning of Article 12 of the Constitution of India. We make it clear that for any other purpose. we do not feel it appropriate to entertain the petition under Article 226 of the Constitution of India. The petition, therefore, stands rejected summarily."

We respectfully agree with the observation made the Division Bench. The next unreported Judgment W.P. No.2166/2003 decided on 20.7.2004. The Division Bench upheld the contentions of the respondent regarding maintainability of the petition a disposed of the petition by making following observations :

"5. Shri Dhorde, learned Advocate for the petitioners, has invited our attention to paragraph 83 of' the judgment of the Apex Court in the case of Mardia Chemicals Limited and others (supra) and urged that in view of the pendency of the present petition, it be directed that the limitation ought to run as and from today."

"6. It is not possible to accept the said request, for the reason that on the date on which the Apex Court pronounced the judgment in the case of Mardia Chemicals Limited and others (supra), the limitation for filing of an appeal would run. We do not think that there would be any problem for the petitioners in regard to the period of limitation in filing of an appeal, for the reason that prosecuting a remedy, bona fide, before a wrong forum by itself would be a sufficient ground to condone the delay."

"We hope and trust, that as the present petition was pending before this Court and an interim order therein was operating, the Debts Recovery Tribunal would consider the application to be moved by the petitioners, for condonation of delay, sympathetically and liberally, in accordance with law."

"7. In view of the judgment of the Apex Court, referred to herein above, we dispose of the petition by granting, liberty to the petitioner to raise all the grounds raised in the present petition, in an appeal to be filed by the petitioners before the Debts Recovery Tribunal under Section 17 of the Securitisation Act."

"It is made clear that the petitioners are at liberty to raise all the grounds put forth in the present petition, in the appeal, bearing the challenge to the constitutional validity of the provisions of the securitisation act."

Lastly we may also refer to a judgment relied on Shri Shah, learned senior counsel to substantiate contention that the writ petition is maintainable, case of A. Umarani Vs. Registrar, Cooperative Societies and others reported in 2004 AIR SCW 4462. The question that arose before the Apex Court in A. Umarani's case (supra) that the Cooperative Society and Land Development Bank constituted and registered in the State of Tamil Nadu used to be governed under Tamil Nadu Cooperative Societies Act, 1961 and Tamil Nadu Land Development Bank Act, 1934. Large number of employees employed were appointed without notification of the vacancies to the Employment Exchanges and without following the other mandatory provisions of the Act and the Rules framed thereunder relating to the recruitment. It was also disputed before the Apex Court that large number of appointees did not have requisite qualifications other qualifications like cooperative training etc. The reservation policy of the State was also not followed by the Cooperative Societies. The Recruitment were made beyond the permissible cadre strength. With a view to condone the serious lapses on the part of the Cooperative Societies in making such appointments in illegal and arbitrary manner, the Government of the State of Tamil Nadu issued various orders from time to time in terms whereof such appointments were sought to be regularized by fixing a cut off date. Thereafter, the cut off date was extended from time to time by the Government by issuing various orders. These appointments were regularized without following the due process of law. Several writ petitions were filed before the High Court of Judicature at Madras praying for issuance of appropriate directions, regularization in service working in the Cooperative Societies of the State of Tamil Nadu. Some petitions were dismissed by the High Court. The Division Bench heard the petitions. One of the points which was considered by the Division Bench of the Madras High Court is whether the writ petitions are maintainable. For our purpose other points which were considered by the Madras High Court are not necessary as Mr. Shah, learned senior counsel has placed reliance only on those observations made by the Apex Court regarding maintainability of the writ petition against the society. Para 59 which is relied on by Shri Shah, learned senior counsel reads as under:

"59. Although we do not intend to express any opinion as to whether the Cooperative Society is a "State" within the meaning of Art. 12 of the Constitution of India but it is beyond any cavil of doubt that the writ petition will be maintainable when the action of the Cooperative Society is violative of mandatory statutory provisions. In this case except the Nodal Centre functions and supervision of the Cooperative Society, the State has no administrative control over its day today affairs. The State has not created any post nor they could do so on their own. The state has not borne any part of the financial burden. It was, therefore, impermissible for the State of direct regularization of the services of the employees of the Cooperative Societies. Such an order cannot be upheld also on the ground that the employees a allegedly served the Cooperative Societies for a long time."

Having gone through the entire judgment of the Apex Court, we fail to understand as to how the observation made by the Apex Court in para 59 are of any assistance to the learned counsel because the Apex Court in the opening sentence of that paragraph observed that it Apex Court did not express any opinion as to whether Cooperative Society is the State within the meaning of Article 12 of the Constitution of India, but the Apex Court further observed that the writ petition will be maintainable when the action of the Cooperative Society is mandatory. With respect, these observations are of no help to the learned senior counsel for the petitioner. Whether the action of issuance of the notice by the Bank which admittedly has issued notice U/s 13(2) of the Securitisation Act is under the statute and prima facie we find that the said notices are valid. Therefore, it is not possible for us to accept the contention of Shri Shah, when he placed reliance on the judgment of the Apex Court in A. Umarani's case. Accordingly. We answer point Nos.v, vi in affirmative.

49.We may now note one submission advanced by S/Shri P.M. Shah, senior advocate and Kulkarni for petitioners that the charging of the interest by the Bank seems contrary to law laid down by the Apex Court in Central Bank of India Vs. Ravindra others reported in A.I.R. 2001 Supreme Court 3095. The Constitution Bench of Apex Court was required to consider the true meaning and interpretation of Section 34 of C.P.C. The point for which reference was made to Constitution Bench can be noted :

"What is the meaning to be assigned to the phrases "the principal sum adjudged" and "such principal sum" as occurring in Section 34 of C.P.C. 1908."

The Apex Court answered the point in following paras:

"55. During the course of hearing it was brought to our notice that in view of several Usury Laws and Debt Relief Laws in force in several States private money-lending has almost come to an end and needy borrowers by and large depend on banking institutions for financial facilities. Several unhealthy practices having slowly penetrated into prevalence were 'pointed out. Banking is an organized institution and most of the banks press into service long running documents wherein the borrowers fill in the blanks, at times without caring to read what has been provided therein, and bind themselves by the stipulations articulated by best of legal brains. Borrowers other than those belonging to corporate sector, find themselves having unwittingly fallen into a trap and rendered themselves liable and obliged to pay interest the quantum whereof may at the end prove to be ruinous. At times the interest charged and capitalised is manifold than the amount actually advanced. Rule of damdupat does not apply. Penal interest, service charges and other over-heads are debited in the account of the borrower and capitalised of which debits the borrower may not even be aware. If the practice of charging interest on quarterly rests is upheld and given a judicial recognition. Unscrupulous banks may resort to charging interest even on monthly rests and capitalising the same. Statements of Accounts supplied by banks to borrowers many a times do not contain particulars or details of debit entries and when written in hand are worse than medical prescriptions putting to test the eyes and wits of the borrowers. Instances of unscrupulous, unfair and unhealthy dealings can be multiplied though they cannot be generalised. Suffice it to observe that such issues shall have to be left open to be adjudicated upon in appropriate cases as and when actually arising for decision and we cannot venture into laying down law on such issues as do not arise for determination before us. However, we propose to place on record a few incidental observations, without which, we feel, our answer will not be complete and that we do as under :

(1) Though interest can be capitalised on the analogy that the interest falling due on the accrued date and remaining unpaid, partakes the character of amount advanced on that date, yet penal interest, which is charged by way of penalty for nonpayment, cannot be capitalised. Further interest, i.e. interest on interest, whether simple, compound or penal, cannot be claimed on the amount of penal interest. Penal interest cannot be capitalised. It will be opposed to public policy.

(2) Novation, that is, a debtor entering into a fresh agreement with creditor undertaking payment of previously borrowed principal amount coupled with interest by treating the sum total as principal, any contract express or implied and an express acknowledgment of accounts are best evidence of capitalisation. Acquiescence in the method of accounting adopted by the creditor and brought to the knowledge of the debtor may also enable interest being converted into principal. A mere failure to protest is not acquiescence.

(3) The prevalence of banking practice legitimatises stipulations as to interest on periodical rests and their capitalisation being incorporated in contracts. Such stipulations incorporated in contracts voluntarily entered into and binding on the parties shall govern the substantive rights and obligations of the parties as to recovery and payment of interest.

(4) Capitalisation method is founded on the principle that the borrower failed to make payment though he could have made and thereby rendered himself defaulter. To hold an amount debited to the account of the borrower capitalised it should appear that the borrower had an opportunity of making the payment on the date of entry or within a reasonable time or period of grace from the date of debit entry or the amount falling due and thereby avoiding capitalisation. Any debit entry in the account of the borrower and claimed to have been capitalised so as to form an amalgam of the principal sum may be excluded on being shown to the satisfaction of the Court that such debit entry was not brought to the notice of the borrower and/or he did not have the opportunity of making payment before capitalisation and thereby excluding its capitalisation.

(5) The power conferred by Sections 21 and 35-A of the Banking Regulation Act, 1935 is coupled with duty to act. Reserve Bank of India is prima banking institution of the country entrusted with a supervisory role over banking and conferred with the authority of issuing binding directions, having statutory force, in the interest of public in general and preventing banking affairs from deterioration and prejudice as also to secure the proper management of any banking company. generally. Reserve Bank of India is one of the watchdogs of finance and economy of the nation. it is, and it ought to be, aware of all relevant factors, including credit conditions as prevailing, which would invite its policy decisions, RBI has been issuing directions/circulars from time to time which, inter alia, deal with rate of interest which can be charged and the periods at the end of which rests can be struck down, interest calculated thereon and charged and capitalised. It should continue to issue such directives. Its circulars shall bind those who fall within the net of such directives. For such transaction which are not squarely governed by such circulars, the RBI directives may be treated as standards for the purpose of deciding whether the interest charged is excessive, usurious or opposed to public policy.

(6) Agricultural borrowing art to be treated on a pedestal different from others. Charging and capitalisation of interest on agricultural loans cannot be permitted in India except on annual or six monthly rests depending on the rotation of crops in the area to which the agriculturist borrowers belong.

(7) Any interest charged and/or capitalised in violation of RBI directives, as to rate of interest, or as to periods at which rests can be arrived at, shall be disallowed and/or excluded from capital sum and be treated only as interest and dealt with accordingly.

(8) Award of interest pendente lite and post decree is discretionary with the Court as it is essentially governed by section 34 of the cpc dehors the contract between the parties. In a given case if the Court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the Court may exercise its discretion in awarding interest pendente lite and post decree interest at a lower rate or may even decline awarding such interest. The discretion shall be exercised fairly. judiciously and for reasons and not in an arbitrary or fanciful manner."

"56. In view of the law having been settled with this judgment, it is expected henceforth from the banks, bound by the directives of the Reserve Bank of India, to make an averment in the plaint that interest/compound interest has been charged at such rates and capitalised at such periodical rests, as are permitted by and do not run counter to, the directives of the Reserve Bank of India. A statement of account shall be filed in Court showing details and giving particulars of debit entries, and if debit entry relates to interest then setting out also the rate of, and the period for which the interest has been charged. On the Court being prima facie satisfied, if a dispute is raised in that regard, of the permissibility of debits, the onus would be on the borrower to show why the amount of debit balance appearing at the foot of the account and claimed as principal sum cannot be so accepted and adjudged. This practice would narrow down the scope of controversy in suits filed by banking institutions and enable an expeditious disposal of the suits, the issues wherein are by and large capable of being determined by documentary evidence. RBI directives have not only statutory favour, any contravention thereof or any default in compliance therewith is punishable under subsection (4) of Section 46 of Banking Regulation Act, 1949. The court can act on assumption that transactions or dealings have taken place and accounts maintained by banks in conformity with RBI directives."

"58. Subject to the above we answer the reference in following terms :

(1) Subject to a binding stipulation contained in a voluntary contract between the parties and/or an established practice or usage interest on loans and advances may be charged on periodical rests and also capitalised on remaining unpaid. The principal sum actually advanced coupled with the interest on periodical rests so capitalised is capable of being adjudged as principal sum on the date of the suit.

(2) The principal sum so adjudged is such principal sum within the meaning of Section 34 of the Code of Civil Procedure, 1908 on which interest pendente lite and future interest i.e. post-decree interest, at such rate and for such period which the Court may deem fit, may be awarded by the Court.

(3) Corporation Bank V. D.S.Gowda, 1994 (5) SCC 213 and Bank of Baroda Vs. Jagannath Pigment and Cham, have been correctly decided."

As the law declared by the Apex Court in Ravindra's case (supra) is binding on all, as we have come to the conclusion that the petitioners have efficacious alternate remedy provided under the Securitisation Act, by filing proceedings under 1993 Act, the petitioners are at liberty to raise the question of charging of interest also, whether the calculation and charging of interest by the bank is proper or correct cannot be gone in to by this Court in this petition.

50.Accordingly, we conclude:

(i) There is no prohibition for the Bank to proceed U/s 13(4) notwithstanding the fact that the Bank has approached the ordinary remedy under the M.C.S. Act.

(ii) The Writ petition against the Banks at not maintainable for the reasons recorded above.

(iii) The petitioners are at liberty to approach the Tribunal by filing appeal/application as contemplated U/s 17 and 18 of the Securitisation Act.

(iv) Any observation or findings recorded will not be considered by the Tribunal while hearing the application/appeal. The Tribunal shall decide the application/appeal on its own merit without being influenced by the observation made by us in this judgment.

51.Accordingly, we dismiss all the petitions with costs.

52.Shri Shah, Senior Advocate, prayed that the interim protection given by this Court be continued for a period of four weeks. Shri Hon, learned counsel for the Bank has vehemently opposed the request made by the petitioners. Shri Hon submitted that in case this Court is inclined to grant stay then in that event this Court may direct the petitioners to deposit at least 80% of the amount as demanded by the notice, specific submission that if the outstanding amount/dues are not recovered, the Bank apprehends that the Reserve Bank of India may take drastic steps by invoking the provisions of Section 35 and 35A of the Banking Regulation Act, 1949, and it will be hazardous in that situation. Therefore, it was submitted that this Court may not stay the order. Having considered the rival submissions on the point of stay, we are of the view that on the facts which are brought before us, we are of the view that to enable the petitioners to approach the Tribunal and file appropriate application, accordingly, the operation of this order will be stayed for a period of four weeks, only on condition that the petitioners before us deposit 80% amount as demanded in the notice with the respective Bank within two weeks from today, that too without prejudice to the rival contentions that may be taken before the appropriate forum. On depositing the amount as directed as directed, the judgment stands stayed for a period of four weeks and failure of which the Bank will be at liberty to proceed U/s 13(4) of the Act and adopt subsequent stages. The amount if deposited as aforesaid, the Bank shall given credit to that amount accordingly.