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Issues: Whether a notice under section 13(2) of the SARFAESI Act constitutes a measure taken to recover secured debt under section 13(4) so as to attract the second proviso to section 15(1) of the SICA and abate the pending BIFR reference, and whether the writ petition seeking quashing of such notice could be sustained.
Analysis: The second proviso to section 15(1) of the SICA operates only when secured creditors representing not less than three-fourths in value have taken measures under section 13(4) of the SARFAESI Act. A notice under section 13(2) is only a preliminary demand calling upon the borrower to discharge its liability within sixty days, and does not by itself amount to a measure under section 13(4). The exercise of rights under section 13(4) arises only after non-compliance with the notice and after the requirements of section 13(9) are satisfied. Since the record showed that not all secured creditors had even issued notices under section 13(2), the statutory threshold for abatement was not met and the BIFR proceedings had not abated. Consequently, the bar under section 22 of the SICA continued to apply to further coercive action under section 13(4).
Conclusion: The notice under section 13(2) could not be quashed, because it was not itself a measure under section 13(4); the petitioner remained entitled to respond to the notice, and the creditor could proceed only in accordance with law and subject to section 13(9) of the SARFAESI Act and section 15(1) and section 22 of the SICA.
Final Conclusion: The writ petition failed, but the Court clarified that mere issuance of a section 13(2) notice does not amount to recovery action under section 13(4), and that the SICA protection would continue until the statutory threshold for action under the SARFAESI Act is satisfied.
Ratio Decidendi: A section 13(2) notice under the SARFAESI Act is only a pre-enforcement demand and not a measure taken under section 13(4); therefore, abatement under the second proviso to section 15(1) of the SICA arises only when the secured creditors representing the requisite three-fourths value have actually taken measures under section 13(4).
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