9911796707
TMI Blog2006 (2) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... ty seven only) within sixty days from the date of receipt of the said notice. The second respondent was also informed that the default on its part would entail any action under section 13(4)( a ) to ( d ) of the Act. The second respondent did not pay the amount. Therefore, the first respondent initiated action under section 13(4) of the Act and issued auction notice proposing to sell house bearing door No. 17/144-3, situated in Nandyal Town, Kurnool District for realizing the security. Aggrieved by the same, the petitioner filed the present writ petition seeking a writ of certiorari to quash the notice under section 13(2) of the Act issued by the first respondent. 2. Learned Counsel for the petitioner, Mrs. Ch. Vedavani, vehemently contends that the action initiated by the first respondent Bank under section 13(2) of the Act and thereafter action under section 13(4) of the Act is illegal and without Jurisdiction. According to the learned Counsel, the Act has no application for the recovery proceedings initiated by the first respondent against the petitioner, in respect of SOD availed by the second respondent. She would urge that the first respondent has not classified SOD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... An amount due under any credit facility is treated as past due when it has not been paid within 30 days from the due date. Due to the improvements in the payment and settlement systems, recovery climate, upgradation of technology in the banking system, etc., it had been decided to dispense with past due concept with effect from 31-3-2001. Accordingly, as from that date, a non-performing asset (NPA) shall be an advance where ( i )interest and/or instalment of principal remains overdue for a period of more than 180 days in respect of a Term Loan; ( ii )the account remains out of order as indicated in paragraph 5-6.3 below, in respect of an Overdraft/Cash Credit (OD/CC); ( iii )the bill remains overdue for a period of more than 180 days in the case of bills purchased and discounted; ( iv ) interest and/or instalment of principal remains overdue for two harvest seasons but for a period not exceeding two half-years in the case of an advance granted for agricultural purposes; and ( v )any amount to be received remains overdue for a period of more than 180 days in respect of other accounts. With a view to moving towards international best practices and to ensure gre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show, that the first respondent did not act illegally while issuing notice under section 13(2) of the Act. 6. The above observations are made having regard to the material placed before this Court and the averments made in the affidavit filed by the petitioner. Whether SOD advance availed by the second respondent is a NPA of the first respondent and whether the first respondent was justified in initiating action under the Act are matters which can be best adjudi-cated by appellate authority under section 17 of the SARFAESI Act. This is because a writ petition would not lie against the first respondent, which is a Company registered under the Companies Act, 1956, engaged in the banking business. 7. The writ petition filed against a private bank is not maintainable. First respondent is Company registered under Companies Act and is engaged in banking business. The same is not a creation of statute nor established under the provisions of statute. Merely because, a private Bank is regulated or controlled by law made by Parliament to regulate banking business, it cannot be said that such body discharges public functions or vested with public duty. The precedents in this regard in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic funding of the activities of an otherwise private body was relevant to the nature of the functions performed, it was not by itself determinative of whether the functions were public or private. The foundation was not standing in the shoes of the local authority. Section 26 of the 1948 Act provided statutory authority for the actions of the local authority, but provided the foundation with no powers. The foundation was not exercising statutory powers in performing functions for the claimants. The fact that, if the foundation were not performing a public function, the claimants would not be able to rely on Article 8 as against it could not change the appropriate classification of the foundation s function. Accordingly, the appeal would be dismissed, although it had been appropriate to bring to the Court by way of judicial review the question whether the foundation was performing a public function." 9. The seven-Judge Bench of the Supreme Court in Pardeep Kumar Biswas v. Indian Institute of Chemical Biology [2002] 5 SCC 111, considered the question whether the Council of Scientific and Industrial Research (CSIR), is a State within the meaning of Article 12 of the Constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1949, the Apex Court held that notwithstanding the regulatory power in relation to private bank vesting the Government as well as Reserve Bank of India, a private bank cannot be considered as State and cannot be treated as performing any public duty. The relevant passages from the judgment are as under: "Merely because the Reserve Bank of India lays the banking policy in the interest of the banking system or in the interest of monetary stability or sound economic growth having due regard to the interests of the depositors etc. as provided under section 5( c )( a ), of the Banking Regulation Act does not mean that the private companies carrying on the business of or commercial activity of banking, discharge any public function or public duty. These are all regulatory measures applicable to those carrying on commercial activity in banking and these companies are to act according to these provisions failing which certain consequences follow as indicated in the Act itself. Provision regarding acquisition of a banking company by the Government, it may be pointed out that any private property can be acquired by the Government in public interest. It is now judicially accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
