Division Bench upholds dismissal of writ petition challenging NPA classification by Bank under SARFAESI Act

The Division Bench upheld the Single Judge's decision to dismiss the writ petition challenging the Non-Performing Asset (NPA) classification by the Bank. Despite the rejection of the petitioner's representation under Section 13(3A) of the SARFAESI Act, the Division Bench emphasized the availability of statutory remedies and dismissed the appeal. The Bank subsequently took possession of the secured assets under Section 13(4) of the SARFAESI Act, with the Division Bench finding no grounds to intervene. The petition was ultimately dismissed for lack of merit.

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Issues:
1. Classification of account as NPA and subsequent actions by the Bank
2. Challenge to the declaration of NPA status and letters issued by the Bank
3. Dismissal of writ petition by the learned Single Judge
4. Appeal against the order of the Single Judge
5. Consideration of representation under Section 13(3A) of the SARFAESI Act
6. Rejection of representation and subsequent appeal
7. Division Bench's decision and reasoning
8. Possession of secured assets by the Bank under Section 13(4) of the SARFAESI Act

Analysis:

1. The case involved the classification of the account as a Non-Performing Asset (NPA) by the Bank due to irregularities in servicing the credit facilities. The Bank issued multiple letters to the petitioner, informing them of the NPA status and requesting regularization of accounts.

2. The petitioner challenged the NPA classification and letters issued by the Bank by filing a writ petition in the Calcutta High Court. The Single Judge dismissed the petition citing the availability of an alternate statutory remedy under Section 13(3A) of the SARFAESI Act.

3. The dismissal of the writ petition by the Single Judge was based on the ground that the petitioner could make a representation against the Bank's actions under Section 13(3A) of the SARFAESI Act, which would be considered by the Bank.

4. Following the dismissal of the writ petition, the petitioner made a representation to the Bank under Section 13(3A) of the Act. An intra court appeal was filed against the Single Judge's order, but the representation made to the Bank was not explicitly mentioned in the appeal.

5. The Division Bench, considering the statutory mechanism and previous court observations, upheld the decision of the Single Judge. Despite the rejection of the representation by the Bank, the Division Bench heard the appeal but did not delve into the merits due to the availability of the statutory remedy.

6. The Division Bench emphasized that the petitioner had availed of the statutory remedy under Section 13(3A) of the SARFAESI Act, and the matter was adequately addressed through the statutory mechanism. The appeal was ultimately dismissed.

7. Subsequently, the Bank took possession of the secured assets of the petitioner under Section 13(4) of the SARFAESI Act. The Division Bench found no reason to interfere with the High Court's order, allowing the petitioner to take further steps to safeguard its interests if deemed necessary. The petition was dismissed for lack of merit.

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