SARFAESI notice challenge at section 13(2) stage was premature where objections were considered and no section 13(4) action had begun.

Security interest over tea estate, factory and allied assets was treated as falling within the SARFAESI Act, because the record did not show mortgage of agricultural land and the section 31(i) bar was therefore not attracted. The borrower's objection to the section 13(2) notice was considered to have been dealt with by the bank in a reasoned reply, consistent with the requirement recognised in Mardia Chemicals, and the existence of a parallel BPDR/Bakijai proceeding did not prevent recourse to SARFAESI after the bank elected to proceed under that special statute. At the notice stage under section 13(2), with no measure under section 13(4) taken and a statutory remedy available under section 17, writ intervention under Article 226 was regarded as premature.

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Issues: (i) Whether the notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was inapplicable on the ground that the security interest related to agricultural land under section 31(i) of the Act; (ii) whether the bank had complied with the requirement of dealing with the borrower's objection to the section 13(2) notice and whether the pending proceeding under the BPDR Act barred recourse to the SARFAESI Act; and (iii) whether the writ petition was maintainable at the stage of a section 13(2) notice in view of the statutory remedy under the Act.

Issue (i): Whether the notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was inapplicable on the ground that the security interest related to agricultural land under section 31(i) of the Act.

Analysis: The documents and loan agreement showed mortgages, hypothecation and charges over tea estate assets, factory assets and allied properties, but did not disclose creation of security interest in agricultural land. On that basis, the bar in section 31(i) was not attracted. The security description supported the bank's case that the secured assets were within the sweep of the Act.

Conclusion: The objection based on section 31(i) failed, and the SARFAESI notice was not rendered inapplicable on that ground.

Issue (ii): Whether the bank had complied with the requirement of dealing with the borrower's objection to the section 13(2) notice and whether the pending proceeding under the BPDR Act barred recourse to the SARFAESI Act.

Analysis: The bank had issued a reply to the borrower's objection and had specifically dealt with the grounds raised, thereby satisfying the requirement recognised in Mardia Chemicals. As to the parallel Bakijai proceeding, the bank had informed the Bakijai Officer that it intended to proceed under the SARFAESI Act and not pursue the earlier proceeding further. In that situation, the earlier proceeding and the appeal arising from it did not affect the bank's right to proceed under the special statute.

Conclusion: The objection to the notice was treated as duly considered, and the existence of the BPDR proceeding did not bar action under the SARFAESI Act.

Issue (iii): Whether the writ petition was maintainable at the stage of a section 13(2) notice in view of the statutory remedy under the Act.

Analysis: The matter was only at the notice stage under section 13(2), with no measure under section 13(4) having yet been taken. The Act provides a specific remedy under section 17 after action under section 13(4), and judicial intervention under Article 226 was not warranted at this premature stage. The borrower's own admission of liability further weakened the challenge.

Conclusion: The writ petition was not maintainable at that stage and was liable to be dismissed.

Final Conclusion: The challenge to the SARFAESI notice failed on merits and on maintainability, and the borrower was left to the statutory framework under the Act.

Ratio Decidendi: A writ petition challenging only a section 13(2) notice under the SARFAESI Act is premature where the secured creditor has considered the objection and no measure under section 13(4) has yet been taken, especially when an effective statutory remedy is available.

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