ORDER
S.C. Sharma, J.
1. Regard being had to the similitude of the controversy involved in this batch of writ petition they were heard analogously together and disposed of by this singular order. For the sake of convenience the facts in Writ Petition No. 408/2009 are exposited herein.
2. The petitioner before this Court has filed this present writ petition being aggrieved by the action of the respondent-Bank in issuing notice under Section 13(2) under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The contention of the petitioner is that the petitioner-Company has availed financial assistance from the respondent-Bank and as the account became irregular a notice was issued on 2-9-2008 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 directing him to discharge his full liability by depositing Rs. 10,14,811/-. The petitioner has further stated that the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 are not at all applicable in the case of petitioner and learned Counsel for the petitioner has relied upon a judgment delivered by the Apex Court in the case of Greater Bombay Co-operative Bank Ltd. v. United Yarn Tex. Pvt. Ltd. and Ors. AIR 2007 SC 1585. Learned Counsel for the petitioner has also stated before this Court that the action of the respondent-Bank is per se illegal and arbitrary and they have violated the guidelines framed by the Reserve Bank of India and the account of the petitioner cannot be classified as NPA. The petitioner has also contended that the action of the respondent Bank is an unilateral action and without deciding the objection raised by the petitioners, the Bank is proceeding ahead in the matter. Besides this other grounds have also been raised regarding maintainability of the proceeding under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner has prayed for following reliefs before this Court:
(i) In view of the facts and grounds mentioned in the writ petition and further in view of the document annexed thereto the humble petitioners most respectfully prays that this Hon'ble Court may kindly be allowed the writ petition and issue a writ of mandamus and or/any other appropriate writer or direction against the respondents and quashing the impugned notice of Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 dated 2-9-2008 and Annexure P-3 and the entire proceeding/action initiated against the petitioner under the Act, 2002 with the further directions to the respondent to allow the petitioner to repay the loan amount in installment.
(ii) That passing any other order or direction, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.
(iii) That the respondents be directed not to auction or took possession of the petitioner's house and time to deposit the balance amount may kindly be granted.
(iv) That the respondent be directed to recalculate the amount of interest on the basis of circular and guidelines issued by the RBI and RRB and also directed to adjust the amount which was deposited by the petitioner with the respondent Bank.
(v) That the cost of petition may kindly be allowed to the petitioner.
3. A reply has been filed on behalf of respondent No. 2 Bank and it has been stated in the reply that the respondent No. 2 Bank a Co-operative Bank and it is the Bank for the purpose of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The respondents have further stated that the proceedings were initiated against the petitioner under Sub-sections (3) and (4) of the Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the petitioner is certainly having an alternative remedy under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the present writ petition is not at all maintainable before this Court. The respondents have also stated that the account of the petitioner became irregular and was declared as NPA and the respondent Bank has demanded the outstanding dues from the petitioner for closing the entire account. It has also been stated that in spite of repeated requests the petitioner did not deposit the amount, and therefore, a notice under Section 13(2) was issued to the petitioner on 2-9-2008 for depositing outstanding dues of Rs. 9,73,228/- as on 31-8-2008. It has been further stated that the petitioner did not deposit the aforesaid outstanding amount, and therefore, after expiry of 60 days period as provided in the said notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, further notice was issued to the petitioner under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for taking peaceful possession of the relevant property under the security of said account. The respondents have further stated that the present writ petition was filed by the petitioner and by virtue of an interim order passed by this Court on 30th January, 2009, no further action has been taken in the matter. The respondents have prayed for dismissal of the writ petition and have relied upon a judgment delivered by the Division Bench of Kerala High Court in the case of George Kutty Abraham and Ors. v. Secretary, Kottayam District Co-operative Bank Ltd. and Ors. : AIR 2008 Kerala 137 (DB). The respondents have also relied upon a judgment delivered by the Division Bench of this Court in the case of Hafiz Zakir Hussain v. Akola Janta Commercial Co-operative Bank Ltd. AIR 2008 MP 193. Learned Counsel for the respondents has also relied upon a judgment delivered by a Division Bench of Bombay High Court in the case of Khaja Industries & etc. v. State of Maharashtra and Anr. etc. AIR 2008 Bom 44 . In the aforesaid case, the Division Bench has dismissed the writ petition filed challenging the Constitutional validity of Sections 13 and 17 of the Act, 2002 and has also held the action of the Bank in consonance with the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Division Bench has also held that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is applicable in respect of the Co-operative Bank and respondents have prayed for dismissal of the writ petition.
4. Heard learned Counsel for the parties at length and perused the record.
5. In the present case, the petitioner has not disputed the financial assistance extended by the respondent Bank which is certainly a Co-operative Bank registered under the provisions of M.P. Co-operative Societies Act, 1960. It is also not been disputed by the petitioner that the account of the petitioner became NPA and a notice was issued to the petitioner under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The return filed by the Bank reflects that a notice was initially issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 on 2-9-2008 directing the petitioner to deposit the outstanding amount of Rs. 9,73,228/-, however, the same amount was not deposited by the petitioner, therefore, a notice was issued under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for taking peaceful possession of the relevant property. The Apex Court while dealing with the case of Greater Bombay Co-operative Bank Ltd. (supra), has held as under:
59. The RDB Act was passed in 1993 when Parliament had before it the provisions of the BR Act as amended by Act No. 23 of 1965 by addition of some more clauses in Section 56 of the Act. The Parliament was fully aware that the provisions of the BR Act apply to co-operative societies as they apply to hanking companies. The Parliament was also aware that the definition of banking company' in Section 5(c) had not been altered by Act No. 23 of 1965 and it was kept intact, and in fact additional definitions were added by Section 56(c). 'Co-operative Bank' was separately defined by the newly inserted Clause (cci) and 'primary co-operative bank' was similarly separately defined by Clause (ccv). The Parliament was simply assigning a meaning to words; it was not incorporating or even referring to the substantive provisions of the BR Act. The meaning of 'banking company' must, therefore, necessarily be strictly confined to the words used in Section 5(c) of the BR Act. It would have been the easiest thing for Parliament to say that 'banking company' shall mean 'banking company' as defined in Section 5(c) and shall include 'co-operative bank' as defined in Section 5(cci) and 'primary co-operative bank' as defined in Section 5(ccv). However, the Parliament did not do so. There was thus a conscious exclusion and deliberate commission of co-operative banks from the purview of the RDB Act. The reason for excluding co-operative banks seems to be that co-operative banks have comprehensive, self-contained and less expensive remedies available to them under the State Co-operative Societies Acts of the States concerned, while other banks and financial institutions did not have such speedy remedies and they had to file suits in Civil Courts.
A Division Bench of this Court while dealing with a similar issue wherein action was initiated by the Co-operative Bank by invoking provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has held that Section 2(e) of Section 13 includes a Co-operative Bank within the definition of Bank by virtue of the notification of the Central Government and a Co-operative Bank can take action under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for recovery of advance loan. The Division Bench of this Court in the case of Hafiz Zakir Hussain v. Akola Junta Commercial Co-operative Bank Ltd. (supra), in Paragraphs 6, 7, 8, 9, 10, 11, 12 and 13 had held as under:
6. From the aforesaid rival submissions raised at the Bar it is luminescent that the centripodal question that emerges for that emerges for adjudication whether the learned Single Judge is justified in holding that the respondent a Co-operative Bank, is entitled under law to take action under the 2002 Act against the appellant herein. Submission of Mr. Yadav, learned Counsel for the appellant is that if the principles laid down in Manoj Tarwala (supra), are properly understood and appreciated there can be no trace of doubt that a Co-operative Bank being not a Banking Company cannot take recourse to the provisions engrafted under 2002 Act. In the case of Manoj Tarwala (supra), a Division Bench of this Court while answering the reference made by the learned Single Judge in respect of the issue whether the Co-operative Bank comes within the ambit and sweep of the 1993 Act has opined as under:
We agree with the aforesaid reasons of the Division Bench of the Rajasthan High Court and hold that Parliament did not intend to include recovery of debts due to the Co-operative Bank within the ambit and sweep of the 1993 Act. With the great respect, we are unable to persuade ourselves to accept the view of the Division Bench of the Bombay High Court in the case of Shamrao Vithal Co-operative Bank Ltd. AIR 2003 Bom 205 (supra) and the view of the Full Bench of the Bombay High Court in the case of Narendra Kantilal Shah : AIR 2004 Bom 166 (supra), that debts due to a Co-operative Bank would also come within the ambit and sweep of the 1993 Act. The conclusions in the Division Bench and the Full Bench judgments of the Bombay High Court are based on Section 56 in Part V of the 1949 Act, but as we have held above, by Section 56 in Part V of the 1949 Act only are made applicable to co-operative societies carrying on banking business and the said Section 56 of the 1949 Act cannot be construed to mean that the provisions of the 1993 Act are also applicable to co-operative societies carrying on a banking business. For the aforesaid reasons, we are also unable to persuade ourself to accept the conclusions of the Full Bench of the Andhra Pradesh High Court in M. Babu Rao AIR 2005 (AP) 661 (supra), that recovery of debt to Rs. 10 lakhs or more by a Co-operative Bank is within the exclusive jurisdiction of the Tribunal constituted under the 1993 Act. The first question of law referred to us is answered accordingly.7. In Greater Bombay Co-operative Bank Ltd. : AIR 2007 SC 1584 (supra), the Apex Court was dealing with the facet whether debts due to the Co-operative Banks constituted under the Co-operative Societies Act of the Maharashtra and Andhra Pradesh could be covered under the provisions of the 1993 Act. Their Lordships in Paragraphs 88 and 89 have expressed the opinion as under:
88. For the reasons stated above and adopting pervasive and meaningful interpretation of the provisions of the relevant Statutes and Entries 43, 44 and 45 of List I and Entry 32 of List II of the Seventh Schedule of the Constitution, we answer the Reference as under:
Co-operative Banks' established under the Maharashtra Co-operative Societies Act, 1960 [MCS Act. 1960]; the Andhra Pradesh Co-operative Societies Act, 1964 [APCS Act, 1964] and the Multi-State Co-operative Societies Act, 2002 [MSCS Act, 2002] transacting the business of banking, do not fall within the business of banking, do not fall within the meaning of 'banking company' as defined in Section 5(c) of the Banking Regulation Act, 1949 (BR Act). Therefore, the provisions of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 (RDB Act) by invoking the Doctrine of incorporation are not applicable to the recovery of dues by the co-operatives from their members.89. The field of Co-operative Societies cannot be said to have been covered by the Central Legislation by reference to Entry 45, List I of the Seventh Schedule of the Constitution. Co-operative Banks constituted under the Co-operative Societies Act enacted by the respective States would be covered by co-operative societies by Entry 32 of List II of Seventh Schedule of the Constitution of India.
8. From the aforesaid decision, it is vivid that the Co-operative Bank is not a banking company, and therefore, it cannot recover its debts or dues by taking recourse to the 1993 Act as it is not a bank within the dictionary clause and the scheme of the 1993 Act. The fulcrum of the matter is whether the said decision can be taken aid of by learned Counsel for the appellant to build an edifice for the conclusion that the 2002 Act is not applicable. Mr. Vipin Yadav, learned Counsel for the appellant has invited our attention to Paragraphs 30 and 31 of the decision rendered in Greater Bombay Co-operative Bank Ltd. (supra), in which Their Lordships were dealing with the 2002 Act. For the proper appreciation it is thought appropriate to reproduce both the paragraphs:
30. The Parliament had enacted the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ['the Securitisation Act'] which shall be deemed to have come into force on 21st day of June, 2002. In Section 2(d) of the Securitisation Act same meaning is given to the word 'banking company' as is assigned to it in Clause (e) of Section 5 of the BR Act. Again the definition of banking company' was lifted from the BR Act but while defining 'bank', Parliament gave five meanings to it under Section 2(c) and one of which is 'banking company'. The Central Government is authorized by Section 2(c)(v) of the Act to specify any other bank for the purpose of the Act. In exercise of this power, the Central Government by Notification dated 28-1-2003, has specified 'co-operative bank' as defined in Section 5(cci) of the BR Act as a 'bank' by lifting the definition of 'co-operative bank' and 'primary co-operative bank' respectively from Section 56 Clauses 5 (cci) and (ccv) of Part V. The Parliament has thus consistently made the meaning of banking company' clear beyond doubt to mean 'a company engaged in baking, and not a cooperative society engaged in banking' and in Act No. 23 of 1965, while amending the BR Act, it did not change the definition in Section 5(c) or even in Section 5(d) to include co-operative banks; on the other hand, it added a separate definition of 'co-operative bank' in Section 5(cci) and 'primary co-operative bank' in Section 5(ccv) of Section 56 of Part V of the BR Act. Parliament while enacting the Securitisation Act created a residuary power in Section 2(c)(v) to specify any other bank as a bank for the purpose of that Act and in fact did specify 'co-operative banks' by Notification dated 28-1-2003. The context of the interpretation clause plainly excludes the effect of a reference to banking company being construed as reference to a co-operative bank for three reasons : firstly, Section 5 is an interpretation clauses; secondly, substitution of co-operative bank' for 'banking company' in the definition in Section 5(c) would result in an absurdity because then Section 5(c) would read thus : 'co-operative bank' means any company, which transacts the business of banking in India; thirdly, Section 56(c) does define 'co-operative bank' separately by expressly deleting/inserting Clause (cci) in Section 5. The Parliament in its wisdom had not altered or modified the definition of 'banking company' in Section 5(c) of the BR Act by Act No. 23 of 1965.
31. As noticed above, 'Co-operative bank' was separately defined by the newly inserted Clause (cci) and 'primary co-operative bank' was similarly separately defined by Clause (ccv). The meaning of 'banking company' must, therefore, necessarily be strictly confined to the words used in Section 5(c) of the BR Act. If the intention of the Parliament was to define the 'co-operative bank' as 'banking company', it would have been the easiest way for the Parliament to say that 'banking company' shall mean 'banking company' as defined in Section 5(c) and shall include 'co-operative bank' and 'primary co-operative bank' as inserted in Clauses (cci) and (ccv) in Section 5 of the Act 23 of 1965.
9. Submission of Mr. Alok Aradhe, learned Senior Counsel for the respondent is that the said paragraphs in fact, support the contention of the respondent-Bank. It is urged by him that the Central Government has been authorised under Section 2(c)(v) of the 2002 Act to specify any other bank for the purpose of the Act and in exercise of the said power the Central Government by notification dated 28-1-03 has specified co-operative bank' as defined in Section 5(c)(cci) of the BR Act bank by lifting definition of the 'co-operative bank'.
10. Section 2(c) of the 2002 Act defines, 'bank' as under:
(i) a banking company; or
(ii) a corresponding new bank; or
(iii) the State Bank of India; or
(iv) a subsidiary bank; or
(v) such other bank which the Central Government may by notification, specify for the purpose of this Act.
11. Thus, Clause (v) empowers the Central Government by a notification to specify any other bank for the purposes of this Act. Thus, power has been conferred on the Central Government in the 2002 Act for including any other bank within the definition by issuing a notification and the Central Government has issued a notification and included co-operative banks for the purposes of the said Act. In this context, we may refer with profit to a Division Bench judgment of the Bombay High Court in M/s. Khaja Industries (supra), wherein the Division Bench after referring to the decision rendered in Greater Bombay Co-operative Bank Ltd. (supra), and after referring to Paragraphs 30, 34 and 59 has expressed the opinion to the effect that the co-operative banks can take action under the 2002 Act.
12. We are in entire agreement with the view expressed in the said decision.
13. In view of the aforesaid premises, we are of the considered opinion that the view expressed in Manoj Tarwala (supra) is not applicable as it was not a case relating to 2002 Act but with regard to forum under the 1993 Act and the status of the bank. In the case at hand the power has been exercised by the Central Government under the 2002 Act and the Apex Court has clearly stated that the Central Government is authorised by Section 2(c)(v) of the Act to specify any other bank for the purpose of the said Act.
It has been held by the Division Bench of this Court that the Central Government is authorised by Section 2(c) to specify any bank for the purposes of the Act, 2002. A similar view has been expressed by a Division Bench of Kerala High Court in the case of George Kutty Abraham and Ors. (supra), Paragraphs 7 and 8 of the aforesaid judgment reads as under:
7. The main contention of the learned Counsel for the appellants was that the decision in Greater Bombay Co-operative Bank Ltd.'s case : AIR 2007 SC 1584 will, on all fours, apply to the provisions of the Securitisation Act. We find it difficult to accept the said contention. In the said case, the Apex Court found that the co-operative bank is not a bank as defined under Section 2 (d) of the RDDB Act, and therefore, the provisions of the said Act, and therefore, the provisions of the said Act are not applicable. The definition of bank in the said Act contained in Section 2 (d) thereof reads as follows:
bank means:
(vi) a banking company;
(vii) a corresponding new bank;
(viii) State Bank of India;
(ix) a subsidiary bank; or
(x) a Regional Rural Bank.
Unless a co-operative bank comes under Clause (1) of the above definition, the provisions of the Act are not applicable to it. Analysing the provisions of the RDDB Act, the Apex Court held a co-operative bank can never be treated as a banking company. But, as noticed by the Apex Court, in the said decision itself, in the definition of bank in Section 2(1)(c) under the Securitisation Act, which we have already quoted above, there is Clause (v), which enables the Central Government to notify other banks also as banks for the purposes of the Act. The Central Government, in fact invoked the said power and issued a notification to the effect that a co-operative bank is also a bank for the purpose of the Securitisation Act. The said notification dated 28-1-2003 reads as follows:
S.O.105 [H]- In exercise of the powers conferred under item (v) of Clause (c) of Sub-section (1) of Section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002), the Central Government hereby specifies 'Co-operative Bank' as defined in Clause (cct) of Section 5 of Banking Regulation Act, 1949 (10 of 1949) as 'bank' for the purpose of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002).In the absence of any challenge to the said notification, the contention of the appellants, that the provisions of the Securitisation Act are not applicable to co-operative banks, cannot be accepted. The remedy of filing a petition under Section 17 of the Securitisation Act can be invoked by the loanee aggrieved by the actions of the secured creditor under Section 13(4) of the Securitisation Act. Always, it is the loanee, who invokes the said provision, while enacting the Securitisation Act, the Parliament has provided a remedy of filing a petition under Section 17 of the Securitisation Act to the aggrieved persons. Instead of providing a separate machinery, the Parliament in its wisdom provided that the aggrieved party can move the machinery provided under the RDDB Act. The decision of the Apex Court in Greater Bombay Co-operative Bank Ltd. 's case (AIR 2007 SC 1584) disables a co-operative bank from moving the DRT for the recovery of loans. The said decision cannot, in any way, affect the remedy provided under Section 17 of the Securitisation Act. Therefore, the contention in this regard are plainly untenable.
8. In the absence of any challenge to any of the provisions of the Securitisation Act or the notification issued thereunder, we feel that it is unnecessary to consider the contentions raised by the learned Senior Counsel for the appellants concerning Legislative competence etc. Since the point whether a writ will lie against a co-operative bank was not seriously raised or canvassed, we are leaving the said question open. But, even assuming a writ will lie against a co-operative bank this Court can decline jurisdiction in view of the alternative remedy available to the aggrieved loanee under the provisions of Section 17 of the Securitisation Act. In this case, since a substantial question of law concerning the applicability of the Securitisation Act to Co- operative Banks has been raised for the consideration of this Court, we did not relegate the appellants to invoke the statutory remedy at the threshold and decided the question by ourselves. In the result, the writ appeals fail and they are accordingly dismissed. But, it is clarified that this judgment will not affect the rights, if any, of the appellants to invoke the statutory remedy available to them. No costs.
The Division Bench of Kerala High Court has held that an alternative remedy is available to the loanee/person aggrieved under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and therefore, even if a writ will lie against a Co-operative Bank, the High Court can decline to exercise jurisdiction in view the alternative remedy available to the aggrieved loanee under the provisions of Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 in the facts and circumstances of the case. The Division Bench of Kerala High Court has also considered the judgment delivered by the Apex Court in the case of Greater Bombay Co-operative Bank Ltd. (supra). The definition of Bank as defined under Section 2(c) empowers the Central Government to notify such other Bank which the Central Government may, by notification, specify for the purpose of the Act and the Central Government has specified Co-operative Bank as defined in Section 5(c)(cci) of the Bank Regulation Act, 1949 (10 of 1949). Bank vide notification dated 28th January, 2003 published in the gazette dated 28th January, 2003, and therefore, there remains no manner of doubt that the respondent Bank though a Co-operative Bank is a Bank within the meaning of Bank as defined under Section 2(1)(c) of the Act, 2002. Resultantly, no case for interference is made out in the matter especially keeping in view the fact that the petitioner is having an alternative remedy under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The present writ petition stands disposed of with a liberty to the petitioner to avail the alternative remedy available to him in accordance with law.
6. With the aforesaid observation, the present writ petition is disposed of. No order as to costs.