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TMI Blog2011 (1) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... I Act and therefore, as per the second proviso to section 15(1) of the SICA, the proceeding pending before the BIFR has not abated and so, the bar under section 22 of the SICA is applicable. Therefore, in the instant case, section 22 of the SICA is a bar for any further proceedings to be initiated by the first respondent under section 13(4) of the SARFAESI Act. As we have noticed, the prayer in this writ petition is for quashing the notice issued under section 13(2) of the SARFAESI Act. In our considered opinion, as we have held supra, since the notice under section 13(2) of the SARFAESI Act does not constitute a measure to exercise the power of the first respondent under section 13(4) of the SARFAESI Act, the said notice cannot be quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order dated September 20, 1999, the BIFR declared the reference made by the petitioner as not maintainable. As against the said order of BIFR an appeal was filed by the petitioner before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) and by order dated April 28, 2000, the order of BIFR dated September 20, 1999, was set aside and the case was remanded to the BIFR for fresh consideration. Again, the BIFR by order dated December 29, 2000, rejected the reference, as against which, the petitioner once again preferred an appeal before the AAIFR. By order dated May 10, 2001, the AAIFR set aside the order of the BIFR dated December 29, 2000 and once again remanded the matter to the BIFR for decision in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner has not taken any measure to recover their secured debt under sub-section (4) of section 13 of the SARFAESI Act as per the second proviso to section 15(1) of the SICA as amended by section 41 read with Schedule of the SARFAESI Act. 5. In the counter filed by the first respondent, it is contended that the second proviso to section 15(1) of the SICA is not applicable to the facts of the present case because, mere issuance of notice under section 13(2) of the SARFAESI Act shall not amount to taking measures to recover the secured debt under sub-section (4) of section 13 of the SARFAESI Act. Under section 13(9) of the SARFAESI Act, for exercising the right conferred under sub-section (4) of section 13 of the SARFAESI Act, it would be su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standing against financial assistance disbursed to the borrower of such secured creditors, have taken any measures to recover their secured debt under sub-section (4) of section 13 of that Act." 8. A perusal of the above proviso would make it abundantly clear that on coming into force of the SARFAESI Act, as per the second proviso to section 15(1) of the SICA, the said proceeding before the BIFR shall stand abated unless the secured creditors representing not less than three-fourths in value of the amount outstanding have taken measures to recover the secured debt under section 13(4) of the SARFAESI Act. 9. The next question is as to whether mere issuance of notice under section 13(2) of the SARFAESI Act shall amount to taking measure as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of the SARFAESI Act shall not amount to taking of measures to exercise the right of the bank under section 13(4) of the SARFAESI Act. For instance, on receipt of the notice under section 13(2) of the SARFAESI Act, if the debtor pays the amount demanded in the said notice within the time stipulated, there shall be no further action under section 13(4) of the SARFAESI Act. It is only the failure of the debtor to comply with the notice under section 13(2) of the SARFAESI Act, which gives rise to a cause of action for the bank to further proceed and pass an order under section 13(4) of the SARFAESI Act. At the time when the bank issues notice under section 13(2) of the SARFAESI Act, the bank may not know as to who are all the other secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, as per the second proviso to section 15(1) of the SICA, the proceeding pending before the BIFR has not abated and so, the bar under section 22 of the SICA is applicable. Therefore, in the instant case, section 22 of the SICA is a bar for any further proceedings to be initiated by the first respondent under section 13(4) of the SARFAESI Act. 12. As we have noticed, the prayer in this writ petition is for quashing the notice issued under section 13(2) of the SARFAESI Act. In our considered opinion, as we have held supra, since the notice under section 13(2) of the SARFAESI Act does not constitute a measure to exercise the power of the first respondent under section 13(4) of the SARFAESI Act, the said notice cannot be quashed at all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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