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2004 (12) TMI 380 - HC - Companies Law
Issues:
1. Whether a bank can invoke section 13 of the Securitisation Act against a borrower when the liability and correct amount payable are pending consideration before a Civil Court. Analysis: The judgment addresses the issue of whether a bank can rely on section 13 of the Securitisation Act against a borrower while the liability and amount payable are under dispute in a Civil Court. The case involved a writ petitioner who received a notice from the bank demanding payment for outstanding loans. The petitioner had filed suits in the Civil Court regarding the amounts owed. The petitioner argued that since the matter was sub judice before the Civil Court, the bank could not invoke section 13(2) of the Act. The bank, on the other hand, contended that the pending suits did not prevent them from utilizing the provisions of the Securitisation Act. The court examined the provisions of the Securitisation Act, emphasizing that section 13(1) empowers the creditor to enforce security without court intervention. The court rejected the petitioner's argument that court involvement barred the bank from invoking section 13. It clarified that the Act allows the bank to choose between approaching the Civil Court or the Tribunal, but court intervention does not automatically preclude the application of section 13. The court referenced a previous decision to support the view that multiple remedies for recovery can coexist as long as statutory guidelines are followed. Additionally, the court highlighted section 37 of the Securitisation Act, which states that the Act's provisions are supplementary to other laws. Therefore, the bank's use of the Securitisation Act alongside pending civil suits was deemed legal. The judgment concluded that unless there is a specific statutory bar, the bank can enforce its claim under section 13 even when civil suits are ongoing. As a result, the appeals were dismissed, affirming the bank's right to utilize the Securitisation Act despite the pending civil litigation.
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