M/S Hygiene Poultries And Others vs. Punjab National Bank And Others

Held

The Court did not decide the merits of the case. The learned counsel for the petitioners, after arguing for some time, sought permission to withdraw the instant petition. The liberty was requested to approach the Debts Recovery Tribunal and raise all the pleas that were presented in the writ petition. The Court granted this request. Therefore, the issues regarding the validity of the auction and the bank's obligation to consider representations were not adjudicated upon by the High Court. The operative direction was to dismiss the petition as withdrawn with liberty to the petitioners to pursue their remedies before the Debts Recovery Tribunal.

Facts

The petitioners, M/s Hygiene Poultries and others, had availed a cash credit limit of Rs. 80 Lakh from Punjab National Bank (respondent No. 1). Petitioner No. 1 provided a poultry unit as security. Due to financial policy changes, demonetization, and the introduction of GST, the business incurred losses, leading to the cash credit limit being declared a Non-Performing Asset (NPA) on September 16, 2019, with an outstanding demand of Rs. 82,67,214.86. The petitioners offered to sell their properties to discharge the liability. The bank subsequently issued a notice under Section 13(4) of the SARFAESI Act and took symbolic possession. The secured asset was sold through an e-auction on January 16, 2020, for Rs. 96 Lakh. The petitioners filed a writ petition challenging the auction and seeking a direction to consider their representations to pay the full amount.

Key Issues

1. Whether the auction dated 16.01.2020 and consequent proceedings under the SARFAESI Act are liable to be quashed/set aside? (Question of law and fact, concerning the validity of auction proceedings). 2. Whether the respondent bank should be directed to consider the petitioners' representations dated 02.09.2020 and 26.10.2020, wherein they expressed readiness to pay the full outstanding amount in a single installment? (Question of law and fact, concerning the bank's obligation to consider settlement proposals). Petitioner's contentions: The petitioners sought to quash the auction and consequential proceedings under the SARFAESI Act. They also prayed for a direction to the bank to consider their representations for full and final payment. The petitioners argued that the financial difficulties arose due to government policies like demonetization and the introduction of GST, and recurring poultry diseases. Revenue/State's contentions: The judgment does not record any specific arguments made by the respondents (Punjab National Bank and others) regarding the merits of the case. The counsel for the respondents was present, but their arguments are not detailed in the judgment.