J.N. Singh, J.

1. From the very beginning of his submissions, Mr. Sanjay Singh, learned counsel for the petitioners, restricted himself to the legal issues being raised by him in the case, and rightly so, because, had he entered into the thickets of the disputed facts, it might have been difficult for him to successfully ward off the charge of under utilization, non-utilization and diversion of fund, made available to the petitioner by the Bank in phases, as per its policy, more particularly in the light of the approved valuers report dated 16.2.2012, annexed with the counter affidavit as Annexure-K. But, before crystallizing his submissions into questions of law arising in the matter, the essential facts of the case, appearing from the pleadings of both the parties, which may require reference in this judgment, are only appropriate to be noticed first, in chronological order at one place. They are:--

25.4.2003--Letter of National Horticultural Research & Development Foundation, informing the Sr. Manager, U.C.O. Bank, Fraser Road, Patna that proposal of petitioner holds promise and appears technically sound. (Annexure-1).

--N.B.C. office of the respondent Bank at Calcutta sanctioned a term loan of Rs. 2.46 crores (pleading para 4 W.P.).

8.10.2003--Senior Manager issued letter of sanction of term loan of Rs. 1.53 crores with terms and conditions including schedule of repayment by petitioner. Loan to be released in phases upon works completion and after site/job inspection. (Annexure-2 & Annexure-A).

15.3.2004--Bank released first installment of Rs. 30 lacs (Annexure-3)

--Small amount disbursed by Bank in phases.

7.2.2006--Request of petitioner to Bank for release of rest of the 92 lacs (Annexure-4/1).

--Petitioners account classified N.P.A. But subsequently some amount was deposited. Hence account became performing. As such some loan amount was disbursed. But statutory auditor at the time of audit, found account unsatisfactory and as such declared the account N.P.A. with effect from 31.3.2007 (pleading para 22 C.A.).

19.3.2008--Bank sanctioned loan to petitioner under UCO Shelter and UCO Mortgage Schemes (Annexure-E series).

--Petitioner paid interest upto 2008 from the loan sanctioned (pleading para 23 Writ Application).

5.3.2009--Request of petitioner for rescheduling/restructuring (Annexure-6).

6.3.2009--Demand Notice u/s 13(2) of the Act issued by registered post (Annexure-F).

--Registered letter returned unserved (pleading para 23 Counter Affidavit).

23.4.2009--Letter of Bank. Enquiry about certain facts regarding progress of project and requirement of funds in view of revised project report submitted by petitioner (Annexure-7).

--Other correspondences after 13(2) notice between Bank and petitioner in respect of project, fund, offer of compromise, its response etc.

20.6.2011--Possession Notice issued u/s 13(4) (Annexure-17).

21.6.2011--Possession Notice issued u/s 13(4) (Annexure-17/A).

--Representations and objections of the petitioner. Never received 13(2) notice.

27.8.2011--Banks final reply to petitioner. Informed that term loan was classified on 31.3.2007 and notice under the Act was issued by Authorized Officer on 6.9.2009, copy enclosed (Annexure-22).

--Filed objection again. Expressed intention to settle. Deposited critical amount of the two accounts. Requested to regularize the accounts.

--Bank asked for 25% down payment with proposal. Filed. But petitioners cheque bounced.

5.3.2012--Writ petition presented first time in High Court office for filing after service of copy.

22.8.2012--Writ petition filed again after removing defects.

24.8.2012--Writ petition registered.

24.8.2012--Proposal of petitioner dated 21.8.2012 rejected (Annexure-J).

25.8.2012--Auction Sale Notice u/s 13(4) issued (Annexure-I).

In the back drop of the above facts, the questions, which emerged from the submissions of Mr. Singh, for consideration by this Court can be formulated in the following manner:--

(i) Whether strict compliance of the provisions of sub-sections (2), (3) & (3-A) (in case a representation/objection is filed) of Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short the Act), independently or collectively, is a pre-condition for any secured creditor to initiate action under sub-section (4) of the Act

(ii) Whether any lapse, independently or collectively, in compliance of any of the provisions of the said sub-sections (2), (3) & (3-A) of Section 13 of the Act makes it impermissible for a secured creditor to initiate steps under sub-section (4) to recover its secured debt in the manner prescribed

(iii) Whether notice period of 60 days, as prescribed in sub-section (2) of Section 13 of the Act, for a borrower to discharge his liability towards his secured creditor, starts running only from the date of valid service of notice on the borrower and not from the date of issue of the notice by the secured creditor

(iv) Whether the requirements of sub-section (2) of Section 13 of the Act gets complied with only upon valid service of notice upon the borrower in the manner prescribed in law for service of summons as per Rule 5 of the Code of Civil Procedure and not otherwise

(v) Whether the expression "shall give details of the amount payable" used in sub-section (3) of Section 13 of the Act by the Legislature makes it obligatory on the part of the secured creditor to give the details of calculation leading to the final figure of amount payable by the borrower and not only the final figure of the amount payable

(vi) Whether in view of the provisions of sub-section (3-A) of Section 13 of the Act, the reasons for non-acceptance of representation or objection of the borrower, made after receipt of notice under sub-section (2), communicated by the secured creditor within one week, must necessarily be a speaking order dealing with each and every objection/claim of the borrower separately and in reference to the specific Act/Rules/Regulations or instructions/guidelines of the Reserve Bank of India applicable in the matter

(vii) Whether, the remedy of Section 17 of the Act, available to a borrower, is an alternative efficacious remedy only in respect of his grievance against any action of the secured creditor under sub-section (4) and not against his any grievance in respect of breach of provisions of sub-sections (2), (3) and (3-A), independently or collectively

(viii) Whether, in spite of the judgment of Apex Court in the case of Union of India EdsicUnited Bank of India vs. Satyawati Tondon: [: (2010)8 SCC 110] , even after initiation of action under sub-section (4) of Section 13 of the Act by the secured creditor, the borrower can maintain a writ application in this Court under Article 226 of the Constitution of India in respect of breach of provisions of sub-sections (2), (3) and (3-A), independently or collectively

(ix) Whether in view of bar to any remedy to the borrower under the Act against the said communication of reasons by the secured creditor, as per proviso to sub-section (3-A) of Section 13 of the Act, the only remedy available to a borrower against validity of rejection of his representation or objection, is to approach this Court under Article 226 of the Constitution of India for exercise of its powers of judicial review within the well established parameters laid down in this regard by a long line of authoritative judicial pronouncements of the Apex Court

(x) Whether the right of the secured creditor to take recourse to any of the measures prescribed under sub-section (4) of Section 13 of the Act gets extinguished by efflux of time if not taken soon after the prescribed period under sub-section (2) is over, or by intervening developments involving the secured creditor also

(xi) Whether the right of a borrower to question the violations of provisions of sub-sections (2), (3) or (3-A) before this Court under Article 226 is available to him even after initiation of action by the secured creditor under sub-section (4) and at any point of time thereafter

2. Mr. Singh, appearing for petitioner in the case, advanced his entire arguments, obviously, to persuade this Court to answer the above questions with a big Yes. For this he placed various documents, annexed with the writ application as well as with the supplementary affidavit of the petitioner, before this Court, to show that, admittedly, the demand notice, issued under Section 13(2) of the Act was never served on the petitioner. He submitted that the Bank cannot be allowed to approbate and reprobate at the same time. He submitted that the subsequent letters, issued by the Bank, clearly made the said notice a dead letter. Hence, if at all, the Bank wanted to initiate action under the Act, it had to de novo take steps from Section 13(2) stage itself. He submitted that, in view of proviso to Section 13(3-A) of the Act, a borrower has no remedy except to move this Court under Article 226 of the Constitution of India against any breach of provisions of sub-sections (2), (3) or (3-A) committed by the Bank. He submitted that remedy available to a borrower under Section 17 of the Act is only against any measures taken by a secured creditor in terms of sub-section (4) of Section 13 and not against any action taken under sub-sections (2), (3) or (3-A). For this he referred to the provisions of the Act and also placed reliance on various paragraphs of the Apex Court judgment in Mardia Chemicals Limited vs. Union of India: [: (2004)4 SCC 311] and also on various paragraphs of judgment in United Bank of India vs. Satyawati Tandon: [: (2010)8 SCC 110] . He also placed reliance on paragraph 23 of the Apex Court judgment in the case of Kanhaiya Lal vs. State of Maharashtra [: (2011)2 SCC 782] . He submitted that recourse to remedy under Article 226/ 227 of the Constitution of India is not available to an aggrieved person only if an efficacious alternative remedy is available to him under the ordinary law of land, and not otherwise.

3. Learned counsel for the respondents, on the other hand, advanced his entire arguments with a view to persuade this Court to answer the above questions with a firm No. He placed several documents available on record to show that petitioner was a chronic defaulter and, therefore, Bank had rightly taken action against it. He submitted that the question of validity of service of notice can also be looked into by the Tribunal in exercise of its powers under Section 17 of the Act, where he would get reasonably fair deal and opportunity to get the matter adjudicated upon. Referring to the judgment of Apex Court in Mardia Chemicals (supra), he also submitted that, in certain circumstances, remedy is available to the borrower before Civil Court also. He placed strong reliance on the judgment of the Apex Court in Satyawati Tandon (supra) and extensively referred to the observations of the Court in its various paragraphs, in support of his submissions, to persuade this Court to answer question no. (viii), as above, in the negative. He also placed reliance on paragraphs 22 and 23 of the judgment of the Apex Court in Kanhaiya Lal (supra) for this purpose. He placed some more facts from the records to point out the defaults and delays caused by the petitioner at every stage which he termed as deliberate.

4. From the submissions of the learned counsel for the parties and from the questions formulated on its basis, it is apparent that all the issues for consideration by this Court in this case revolve around the import and interpretation of sub-sections (1), (2), (3) and (3-A) of Section 13 of the Act and their non-compliance by the secured creditor individually or collectively and remedy available to a borrower in this regard. Hence, for easy reference it is only appropriate to reproduce the said sub-sections here at one place in this judgment before entering into the consideration of the issues:--

13. Enforcement of security interest.--(1) Notwithstanding anything contained in Section 69 or Section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or Tribunal, by such creditor in accordance with the provisions of this Act.

(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4).

(3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower.

(3-A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower:

Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under Section 17 or the Court of District Judge under section 17A.

5. Now coming to the questions formulated, since question nos. (vii) and (viii) raise a question of the very propriety of exercise of its jurisdiction by this Court under Article 226 of the Constitution of India, in the facts and circumstance of this case, it is only proper for this Court to examine the same first.

6. Learned counsel for the respondents has relied upon various paragraphs of the judgment of the Apex Court in Satyawati Tandon (supra) in support of the submissions that this writ application before this Court is not maintainable, as Bank has already initiated action under Section 13(4) of the Act by issuing the possession notice dated 20-21.6.2011 (Annexures-17 & 17/A). In Satyawati Tandon (supra) the question before the Court was whether Section 17 of the Act provided efficacious alternative remedy to any person, including a borrower, against action of the secured creditor in terms of sub-section (4) of Section 13, or not. The Court examined, in detail, the developments leading to the enactment of the SARFAESI Act, 2002 and thereafter it examined each and every provision of the Act, relevant for the consideration of issue before it. It also noticed its earlier judgment in Mardia Chemicals (supra) and found that the Court had already held, in clear terms, that the remedy available to any person, including a borrower, under Section 17 of the Act was an efficacious alternative remedy available to him against any action of secured creditor taken under the provisions of sub-section (4) of Section 13 of the Act. In paragraph 42 of the judgment in Satyawati Tandon (supra), the Court held that Tribunal under Section 17 or Appellate Tribunal under Section 18 were empowered to pass interim orders also and were required to decide the matter within a fixed time schedule. Hence, the Court held that the remedy available to an aggrieved person under the SARFAESI Act is both expeditious and effective. Therefore, it held that in all such cases High Court must insist upon an aggrieved party to exhaust his remedy available under the Act first. The Court found that though the remedy under Article 226 was not barred by any provision of the Act, but at the same time the Court, while exercising its powers under the said Article, should not be oblivious of the rules of self-imposed restrained evolved by the Court (the Apex Court), which every High Court is bound to keep in view while exercising powers under Article 226 of the Constitution. Thereafter in paragraph 46, the Court took notice of the narrow scope (in reference to three earlier judgments of the Court) under which a High Court could be held justified in passing appropriate interim orders. Finally, in paragraph-52, the Court noticed the parameters laid down by it in its earlier judgment in the case of City and Industrial Development Corp. vs. Dosu Aardeshir Bhiwandiwala: [: (2009)1 SCC 168] and in paragraph 55 expressed serious concern over the ignorance by the High Courts of its repeated pronouncements in the matter.

7. This judgment is an authority on the point that the alternative remedy available to any person, including a borrower, under Sections 17 and 18 of the Act, against any action taken by a secured creditor under the provisions of sub-section (4) of Section 13 is expeditious and efficacious. Hence, in view of this judicial pronouncement it is not permissible for any court to entertain any writ application under Article 226 raising a challenge to any action taken by a secured creditor in terms of any of the clauses of sub-section (4) of Section 13 of the Act. But in the present case the first challenge of the petitioner is to non-compliance of the provisions of the sub-section (2), (3) and (3-A) of Section 13 of the Act by the Bank. Consequently only, learned counsel for the petitioner has prayed for quashing of the Section 13(4) action also, which was admittedly initiated by issue of possession notice more than two years after the alleged demand notice under sub-section (2) was issued.

8. Now coming to the alternative remedy available under the Act, recognized by the Apex Court in paragraph-42 of judgment in Satyawati Tondon (supra) as expeditious and effective, this Court has examined the language and wordings of Section 17. This Court finds that the Section 17, in clear terms, talks of sub-section (4) of Section 13 only. The language of the provision makes it clear that the measures taken by a secured creditor or his authorized officer under sub-section (4) of Section 13 can only be challenged before the Debts Recovery Tribunal by any person, including a borrower. The Section and all its sub-sections refer only to sub-section (4) of Section 13 and no other sub-section of Section 13. Hence, in view of the clear wordings of Section 17, it is difficult for this Court to accept that a Debts Recovery Tribunal can, on its own, go into and examine and entertain the allegations of violations of provisions of sub-sections (2), (3) and (3-A) by the secured creditor in an appeal filed before it by any person, including a borrower, in exercise of its powers under Section 17A close examination of the sub-sections (2), (3) and (3-A) and (4) of Section 13 also shows that sub-sections (2), (3) and (3-A) together form one stage of action of the secured creditor, whereas sub-section (4), with all its clauses, forms the second stage of action by him for recovery of his secured debt. Sub-section (4) gives jurisdiction to a secured creditor to initiate action for recovery of the debt simply if the borrower fails to discharge the liability in full within the period specified in sub-section (2). The language of this sub-section does not envisage any consideration of validity, or otherwise, of action of a secured creditor under sub-sections (2), (3) or (3-A). Hence, it is abundantly clear that, the action of a secured creditor under sub-section (4) is clearly separate and independent, without involving the question of validity of any action of secured creditor under sub-sections (2), (3) and (3-A). The proviso to sub-section (3-A) clearly bars any application under Section 17 before the Debt Recovery Tribunal against the reasons communicated by the secured creditor or any likely action to be taken by him. In the circumstances, in the opinion of this Court, remedy to any person, including a borrower, under Sections 17 and 18 of the Act does not envisage a remedy to him, also against the non-compliance of provisions of sub-sections (2), (3) and (3-A) by the secured creditor. In the present case, it is the breach of provisions of sub-sections (2) by the Bank which is primarily under challenge. Therefore, against that, in the opinion of this Court, the petitioner has no alternative efficacious remedy available under the Act. Even if it is assumed that the proviso to sub-section (3-A) governs only that subsection, and not sub-sections (2) and (3), but the wordings of sub-section (4), read with the Wordings of Section 17, makes it clear that the legislature did not intend to make it open for the Tribunal to go into the question of compliance of sub-section (2) and (3) also in an appeal preferred by any person, including a borrower, after initiation of an action under sub-section (4) of Section 13. Therefore, in the opinion of this Court, a borrower, alleging breach of any of the provisions of sub-sections (2), (3) and (3-A), independently or collectively, has no remedy available under the Act to ventilate his grievances, except to move this Court under Article 226 of the Constitution of India. As a result, this Court comes to the conclusion, that the law laid down by the Apex Court in Satyawati Tondon (supra) has no application in a case where breach of provisions of sub-sections (2), (3) and (3-A), independently or collectively, is directly raised by an aggrieved party through an application before this Court under Article 226 of the Constitution of India. The answer to the question nos. (vii) & (viii), therefore, has to be Yes.

9. The deck now, having become clear for entertaining this writ application on merits, this Court now proceeds to consider other questions formulated by the Court; as above, in the light of submissions of Mr. Singh. The question nos. (i), (ii), (iii) & (iv) appear to be somewhat interrelated and overlapping. Hence this Court will like to take them up together.

10. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is divided into different chapters. Chapter-III is titled Enforcement of Security Interest, and starts with Section 13, containing provisions, in its various sub-sections, for enforcement of security interest, and ends with Section 19, containing provisions in respect of Right of borrower to receive compensation and costs in certain cases. Section 13 starts with sub-section (1) and ends with sub-section (13). In between these two sub-sections, in the other sub-sections, steps are laid down for a secured creditor to follow, if it intends to enforce its security interest, without any intervention of the Court or Tribunal and notwithstanding anything contained in Section 69 or Section 69A of the Transfer of Property Act, 1982. The first step, laid down in the procedure is in sub-section (2), which requires a notice in writing to be issued to a borrower, who has defaulted in repayment of a secured debt or installment thereof and whose such debt has been classified as non-performing asset, requiring him to discharge his liability in full within sixty days from the date of notice, failing which the secured creditor has been held entitled for exercise of all or any of the rights under sub-section (4).

11. The provisions of the Act has been under detailed scrutiny by the Apex Court in Mardia Chemicals (supra), while dealing with challenge to its vires; in M/s Transcore vs. Union of India [: (2008)1 SCC 125] , while dealing with validity of initiation of action in terms of the Act during the pendency of a proceeding under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (in short the DRT Act) and again in Satyawati Tondon (supra), while dealing with the nature of remedy available to any person, including a borrower under Sections 17 & 18 of the Act and the propriety of a court to pass interim orders in such matter in exercise of its powers under Article 226 of the Constitution. In Mardia Chemicals consideration of the provisions of the Act starts from paragraph 38 in the following manner:--

38. We may now consider the main enforcing provision which is pivotal to the whole controversy, namely, Section 13 in Chapter-III of the Act. It provides that a secured creditor may enforce any security interest without intervention of the court or tribunal irrespective of Section 69 or Section 69A of the Transfer of Property Act where according to sub-section (2) of Section 13, the borrower is a defaulter in repayment of the secured debt or any instalment of repayment and further the debt standing against him has been classified as a non-performing asset by the secured creditor. Sub-section (2) of Section 13 further provides that before taking any steps in the direction of realizing the dues, the secured creditor must serve a notice in writing to the borrower requiring him to discharge the liabilities within a period of 60 days failing which the secured creditor would be entitled to take any of the measures as provided in sub-section (4) of Section 13. It may also be noted that as per sub-section (3) of Section 13 a notice given to the borrower must contain the details of the amounts payable and the secured assets against which the secured creditor proposes to proceed in the event of non-compliance with the notice given under sub-section (2) of Section 13.

(emphasis is mine)

12. Here it may be noticed that, though in sub-section (2) the language used by the Legislature is the secured creditor may require the borrower by notice in writing and within sixty days from the date of notice, but Apex Court, in the above paragraph, has used the expression must serve a notice in writing. The Court has held that, before issue of notice, a borrower is not entitled to be heard, but it has held that the act of the secured creditor must fulfill the requirement of reasonableness and fairness. It has held that The purpose of serving a notice upon the borrower under sub-section (2) of Section 13 of the Act is, that a reply may be submitted by the borrower explaining the reasons as to why measures may or may not be taken under sub-section (4) of Section 13 in case of non-compliance with notice within 60 days. The Court has held that no one should be hit below the belt and the plea of absence of natural justice lies ill in the mouth of chronic defaulters and condemning them unheard and presupposing admission of the liability by the borrowers and all of them to be chronic defaulters can be one example of hitting below the belt. Finally, in paragraph 80 of the judgment, the Court crystallized it findings. The first finding of the Court, which is relevant of the purposes of this discussion is as follows:--

1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days notice before proceeding to take any of the measures as provided under sub-section (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be, must be communicated to the borrower. In connection with this conclusion we have already held a discussion in the earlier part of the judgment. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under Section 17 of the Act, at that stage.

(emphasis is mine)

13. For the purposes of mode and manner of service of demand notice in terms of sub-section (2), this Court need not revert to rule 5 of the Code of Civil Procedure as The Security Interest (Enforcement) Rules, 2002 (in short = the said Rules) contains elaborate provision, in Rule 3 thereof, for service of demand notice (and not for issue of notice), and any other notice, under the Act. Rule 3 of the said Rules reads as follows:--

3. Demand Notice.--(1) The service of demand notice as referred to in sub-section (2) of Section 13 of the Act shall be made by delivering or transmitting at the place where the borrower or his agent, empowered to accept the notice or documents on behalf of the borrower, actually and voluntarily resides or carries on business or personally works for gain, by registered post with acknowledgement due, addressed to the borrower or his agent empowered to accept the service or by Speed Post or by courier or by any other means of transmission of documents like fax message or electronic mail service:

Provided that where authorised officer has reason to believe that the borrower or his agent is avoiding the service of the notice or that for any other reason, the service cannot be made as aforesaid, the service shall be effected by affixing a copy of the demand notice on the outer door or some other conspicuous part of the house or building in which the borrower or his agent ordinarily resides or carries on business or personally works for gain and also by publishing the contents of the demand notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality.

(2) Where the borrower is a body corporate, the demand notice shall be served on the registered office or any of the branches of such body corporate as specified under sub-rule (1).

(3) Any other notice in writing to be served on the borrower or his agent by authorised officer, shall be served in the same manner us provided in this rule.

(4) Where there are more than one borrower, the demand notice shall be served on each borrower.

(emphasis is mine)

14. Hence, this Court is of the considered opinion that sub-section (2) of Section 13 of the Act calls for its strict compliance. The Demand Notice has to be served upon the borrower, strictly in the manner prescribed in Rule 3 of the said Rules and the sixty days period, for the borrower to discharge in full his liability, starts running only from the date of service of such notice, and not from any earlier date. This Court is also of the opinion that, expiry of sixty days from such service of notice is a precondition for initiation of a proceeding by a secured creditor under sub-section (4) as it starts with the language "in case the borrower fails to discharge his liability in full within the period prescribed in sub-section (2)" Resultantly, any action by a secured creditor, in terms of sub-section (4), in absence of strict compliance of sub-section (2) shall be impermissible.

15. Coming to the question no. (v) above, in respect of the scope and import of sub-section (3) of Section 13 of the Act, this Court finds that this sub-section has been incorporated by the Legislature in the section only to specify as to what is required to be mentioned in the notice to be issued under sub-section (2). Insertion of this sub-section makes it clear that the Legislature did not intend any ambiguity or insufficiency of information to get into the notice under sub-section (2) by leaving the discretion with the authorized officer of the secured creditor to decide its contents. That is why the Legislature has provided in this sub-section that the notice "shall give details of the amount payable" and "the secured assets intended to be enforced". It is significant to note that the Legislature has used the expression shall give the details of the amount and not shall give the final amount payable or shall give total amount due or the like. The word details used by the Legislature before the amount payable is, in the opinion of this Court, very significant. This Court is of the view that, by using the word details before the expression of the amount payable, the Legislature clearly intended that in the notice under sub-section (2) the details of calculation of principal and interest, with all debits and credits, must be mentioned. The use of words shall give before details further leaves no discretion to a secured creditor to withhold any information from the borrower in respect of steps taken by it to reach final figure of amount payable by him in sixty days from the date of service of notice under sub-section (2). In Mardia Chemicals (supra) the Court has found the requirement of reasonableness and fairness in the dealings of institutional financing and has used the expression transparency, though in the context of informing a borrower the reasons for not accepting his objections. The observations of the Court in paragraph 47 of the judgment, in this context are:--

47. This will also be in keeping with the concept of right to know and lenders liability of fairness to keep the borrower informed particularly of the developments immediately before taking measures under sub-section (4) of Section 13 of the Act. It will also cater to the cause of transparency and not secrecy and shall be conducive in building an atmosphere of confidence and healthy commercial practice. Such a duty, in the circumstances of the case and the provisions, is inherent under Section 13(2) of the Act.

16. It must be noticed that, the expression cause of transparency has been found inherent by the Court, in the above paragraph, in the context of Section 13(2), i.e. in respect of the notice of demand to be issued and served on the borrower. In the circumstances, the details of calculation is all the more required to be mentioned in the notice, so that the borrower may know as to how the final figure was arrived at by the secured creditor and which law or guidelines had been followed for the purpose, to enable the borrower to take a meaningful objection to the notice in a given situation. This becomes necessary also because, in terms of Section 13(1) of the Act, a creditor is empowered to enforce the security himself without intervention of the Court. Interestingly, the judgment of the Apex Court in Satyawati Tondon (supra), which has virtually barred exercise of powers by the High Courts under Article 226 of the Constitution, in the matter of an action taken by a secured creditor under Section 13(4), except in exceptional circumstances, due to availability of efficacious alternative remedy available to a borrower or any person under the Act, has also recognized the right of a borrower to challenge the, classification of his account as non-performing asset as also the quantum of amount, specified in the notice, in his representation which he may file in terms of sub-section (3-A). The observations of the Court in paragraph 13 of the judgment, in this regard, are as follows:--

13. Sub-section (3) of Section 13 lays down that notice issued under Section 13(2) shall contain details of the amount payable by the borrower as also the details of the secured assets intended to be enforced by the bank or financial institution. Sub-section (3-A) of Section 13 lays down that the borrower may make a representation in response to the notice issued under Section 13(2) and challenge the classification of his account as non-performing asset as also the quantum of amount specified in the notice. If the bank or financial institution comes to the conclusion that the representation/objection of the borrower is not acceptable, then reasons for non-acceptance are required to be communicated within one week.

17. Thus it is clear that, in view of the intent and import of sub-section (3) of Section 13 of the Act, a notice issued under sub-section (2) thereof, must contain all necessary details leading to the determination of final amount by the secured creditor found payable by the borrower and not only the figure of final amount payable. This is all the more necessary because, non-payment of this amount give the secured creditor a right under law to enforce its security interest in the manner prescribed under sub-section (4) of Section 13 of the Act, without intervention of the Court or Tribunal. The Apex Court in paragraph 71 of Mardia Chemicals (supra) has observed that Possessing more drastic powers calls for exercise of higher degree of good faith and fair play". Hence, in the opinion of this Court, the mandate of the Legislature for a secured creditor, through sub-section (3), is to maintain complete transparency, at the time of issue of notice under sub-section (2) and nothing less.

18. Question No. (vi) above does not heed much deliberation as the Apex Court, in the case of Mardia Chemicals (supra), has made the imperative nature of duty, cast upon a secured creditor by the Legislature, to communicate the reasons for non-acceptance of the representation or objection to the borrower, very clear in paragraphs 45 & 46, which is simply being reproduced hereinbelow in answer to the question:--

45. In the background we have indicated above, we may consider as to what forums or remedies are available to the borrower to ventilate his grievance. The purpose of serving a notice upon the borrower under sub-section (2) of Section 13 of the Act is, that a reply may be submitted by the borrower explaining the reasons as to why measures may or may not be taken under sub-section (4) of Section 13 in case of non-compliance with notice within 60 days. The creditor must apply its mind to the objections raised in reply (sic) such notice and an internal mechanism must be particularly evolved to consider such objections raised in the reply to the notice. There may be some meaningful consideration of the objections raised rather than to ritually reject them and proceed to take drastic measures under sub-section (4) of Section 13 of the Act. Once such a duty is envisaged on the part of the creditor it would only be conducive to the principles of fairness on the part of the banks and financial institutions in dealing with their borrowers to apprise them of the reason for not accepting the objections or points raised in reply to the notice served upon them before proceeding to take measures under sub-section (4) of Section 13. Such reasons, overruling the objections of the borrower, must also be communicated to the borrower by the secured creditor. It will only be in fulfilment of a requirement of reasonableness and fairness in the dealings of institutional financing which is so important from the point of view of the economy of the country and would serve the purpose in the growth of a healthy economy. It would certainly provide guidance to the secured debtors in general in conducting the affairs in a manner that they may not be found defaulting and being made liable for the unsavoury steps contained under sub-section (4) of Section 13. At the same time, more importantly, we must make it clear unequivocally that communication of the reasons for not accepting the objections taken by the secured borrower may not be taken to give occasion to resort to such proceedings which are not permissible under the provisions of the Act. But communication of reasons not to accept the objections of the borrower, would certainly be for the purpose of his knowledge which would be a step forward towards his right to know as to why his objections have not been accepted by the secured creditor who intends to resort to harsh steps of faking over the management/business of viz. secured assets without intervention of the court. Such a person in respect of whom steps under Section 13(4) of the Act are likely to be taken cannot be denied the right to know the reason of non-acceptance and of his objections. It is true, as per the provisions under the Act, he may not be entitled to challenge the reasons communicated or the likely action of the secured creditor at that point of time unless his right to approach the Debts Recovery Tribunal as provided under Section 17 of the Act matures on any measure having been taken under sub-section (4) of Section 13 of the Act.

46. We are holding that it is necessary to communicate the reasons for not accepting the objections raised by the borrower in reply to the notice under Section 13(2) of the Act, more particularly for the reason that normally in the event of non-compliance with notice, the party giving notice approaches the court to seek redressal but in the present case, in view of Section 13(1) of the Act the creditor is empowered to enforce the security himself without intervention of the court. Therefore, it goes with logic and reason that he may be checked to communicate the reason for not accepting the objections, if raised and before he takes the measures like taking over possession of the secured assets, etc.

19. Obviously, the reasons, which have to be communicated by a secured creditor, must be a speaking one and, as and when necessary, must also disclose the basis of the reason assigned by him for not accepting the representation or objection of the borrower as not tenable. The question is answered accordingly.

20. Coming to question no. (x) above, this Court finds that the Legislature has given a secured creditor a right to take steps under various clauses of sub-section (4) of Section 13 of the Act for enforcing his security interest only if a borrower fails to discharge his liability in full within the period specified in sub-section (2). This shows that, the moment the sixty days period is over and the secured creditor finds that the liability has not been discharged by the borrower in full, he must decide whether he wants to initiate action under sub-section (4) or would like to take recourse to other remedies available to it for getting his secured debt liquidated. In a given situation it may find any other remedy as more appropriate than initiating action under sub-section (4). But this decision cannot be deferred for months and years, while letting the liability of the borrower getting inflated by addition of interest to it, all the time. This cannot be termed as fair play by a secured creditor. It will only amount to putting more burden on the borrower by its own inaction and this will be highly improper for a secured creditor. In a given case, in such a situation, question may arise of entitlement of the secured creditor for interest over the due amount, multiplied only due to delay caused by him in enforcing his interest even after expiry of the sixty days time prescribed in sub-section (2). In cases in which, after service of notice under sub-section (2) and after expiry of sixty days time, a secured creditor entertains and takes into active consideration any proposal of the borrower, or offers any proposal to the borrower, the initial notice issued under sub-section (2) and non-discharge of his liability by the borrower in full within sixty days, may not remain a valid ground for initiation of action by the secured creditor under sub-section (4). But this Court will hasten to add that this cannot be a hard and fast rule and it has always to depend on the particular facts and circumstances of each case. The question is answered accordingly.

21. So far as question no. (xi) above is concerned, the Apex Court, in the case of M/s Transcore (supra), while noticing, in detail, the Reasons for Enactment of the NPA Act, 2002 (the Act), has observed as follows:--

13. Non-performing assets (NPA) are a cost to the economy. When the Act was enacted in 2002, the NPA stood at Rs 1.10 lakh crores. This was a drag on the economy. Basically, NPA is an account which becomes non-viable and non-performing in terms of the guidelines given by RBI. As stated in the Statement of Objects and Reasons, NPA arises on account of mismatch between asset and liability. The NPA account is an asset in the hands of the bank or Fl. It represents an amount receivable and realisable by the banks or FIs. In that sense, it is an asset in the hands of the secured creditor. Therefore, the NPA Act, 2002 was primarily enacted to reduce the non-performing assets by adopting measures not only for recovery but also for reconstruction. Therefore, the Act provides for setting up of asset reconstruction companies, special purpose vehicles, asset management companies, etc. which are empowered to take possession of secured assets of the borrower including the right to transfer by way of lease, assignment or sale. It also provides for realisation of the secured assets. It also provides for takeover of the management of the borrower company.

14. There is one more reason for enacting the NPA Act, 2002. When the civil courts failed to expeditiously decide suits filed by the banks/FIs, Parliament enacted the DRT Act, 1993. However, DRT did not provide for assignment of debts to securitisation companies. The secured assets also could not be liquidated in time. In order to empower banks or Fls to liquidate the assets and the secured interest, the NPA Act was enacted in 2002. The enactment of the NPA Act is, therefore, not in derogation of the DRT Act. The NPA Act removes the fetters which were in existence on the rights of the secured creditors. The NPA Act is inspired by the provisions of the State Financial Corporations Act, 1951 (the SFC Act), in particular Sections 29 and 31 thereof. The NPA Act proceeds on the basis that the liability of the borrower to repay has crystallised; that the debt has become due and that on account of delay the account of the borrower has become substandard and non-performing. The object of the DRT Act as well as the NPA Act is recovery of debt by non-adjudicatory process. These two enactments provide for cumulative remedies to the secured creditors. By removing all fetters on the rights of the secured creditor, he is given a right to choose one or more of the cumulative remedies. The object behind Section 13 of the NPA Act and Section 17 r/w Section 19 of the DRT Act is the same, namely, recovery of debt. Conceptually, there is no inherent or implied Inconsistency between the two remedies. Therefore, as stated above, the object behind the enactment of the NPA Act is to accelerate the process of recovery of debt and to remove deficiencies/obstacles in the way of realisation of debt under the DRT Act by the enactment of the NPA Act, 2002.

22. Hence, as emphasized in Satyawati Tondon (supra) also, any liberty to a borrower to drag a secured creditor into a protracted litigation, through a writ application filed under Article 226 of the Constitution before a High Court, as per his own sweet will and as per his convenience, will only amount to let the object and reasons of the Act get frustrated with its resultant adverse effect on the National economy. In the circumstances, in the opinion of this Court, no borrower can be allowed to take the matter to a Court, as and when he desires and no Court will be justified in entertaining such matters at the behest of a recalcitrant and defaulting applicant, coming to the court as per his convenience, particularly after the action is initiated by the secured creditor under sub-section (4) of Section 13 of the Act by issue of possession notice, unless, he approaches the court immediately after coming to know the intention of the secured creditor to take recourse to the provisions of the Act, and, on the basis of records, it is established that no occasion had arisen to him earlier to approach the court under Article 226. In the opinion of this Court, only glaring cases of infraction of law by a secured creditor, brought to the notice of the court at the earliest, for exercise of its extraordinary discretionary jurisdiction under Article 226 of the Constitution, can only be entertained in a writ proceeding, leaving it for the Tribunal to decide challenges to actions of the secured creditor under any of the clauses of sub-section (4) or any disputed question of fact, in exercise of it powers under Section 17. The act of a borrower of entering into negotiation or making offers and proposal with a view to settle the matter, even after initiation of action by the secured creditor in terms of sub-section (4) of Section 13 of the Act, may, in the circumstances; amount to acquiescence by the borrower to the actions of the secured creditor in terms of sub-sections (2), (3) and (3-A). The question is answered accordingly.

23. Now, coming to the last question, i.e. question no. (ix), there can be no doubt that powers of judicial review is available to a court, in exercise of powers under Article 226 of the Constitution of India, against any action of State, its instrumentalities or statutory bodies, whether it be in the realm of administrative/executive decision or in the realm of a policy decision and the court can interfere in the matter, and strike down such decision, if the same is found to be arbitrary, capricious, unreasonable, mala fide, in violation of any constitutional mandate or in violation of a statutory provision applicable in the matter or in violation of principles of natural justice. In the matters of policy decisions the court does not examine the wisdom of the policy maker, nor does it look into the comparative merits and substitute its views for that of the decision maker. It is only the decision making process and its vires on the touchstone of Article 14 of the Constitution of India, which the court, in exercise of limited scope of judicial review in the matters, can examine.

24. But in a case where action of a secured creditor, under the provisions of the Act, falls for consideration, the parameters of judicial review, in the opinion of this Court, has to be quite different. The Act, by virtue of the provisions of sub-section (1) of Section 13, empowers a secured creditor to enforce its security interest, created in its favour, without the intervention of the Court or Tribunal, in the manner provided in the various provisions of the Act. A secured creditor has been given this liberty, notwithstanding the provisions of Sections 69 and 69A of the Transfer of Property Act, 1882. From the various sub-sections of Section 13 of the Act, it appears that, the procedure laid down therein for enforcing a security interest by a secured creditor, is somewhat in the nature of execution of a money decree, and not in the nature of an executive/administrative action/decision. In the matter of classification of a debt as non-performing asset and enforcing its security interest, a secured creditor has no discretion. Once a debt (sic) classified as non-performing asset, for which also he has to follow the guidelines of the Reserve Bank of India (in short the RBI), he has only to further follow its guidelines at every stage, together with the provisions of the Act, to recover his secured debt Hence, he has only to make calculations and take steps to recover his secured debt by initiating the process in terms of sub-section (4) of Section 13. While upholding the vires of the Act, the Apex Court has made this clear in Mardia Chemicals (supra) in the following words:--

37. Next we come to the question as to whether it is on the whims and fancies of the financial institutions to classify the assets as non-performing assets, as canvassed before us. We find it not to be so. As a matter of fact a policy has been laid down by Reserve Bank of India providing guidelines in the matter for declaring an asset to be a non-performing asset known as RBIs prudential norms on income recognition, asset classification and provisioning--pertaining to advances through a circular dated 30.8.2001.

25. The Court thereafter considered the various provisions of the said circular dated 30.8.2001 of the RBI and came to the following conclusion:--

From what is quoted above, it is quite evident that guidelines as laid down by Reserve Bank of India which are in more details but not necessary to be reproduced here, lay down the terms and conditions and circumstances in which the debt is to be classified as non-performing asset as early as possible. Therefore, we find no substance in the submission made on behalf of the petitioners that there are no guidelines for treating the debt as a non-performing asset.

26. In the circumstances, in the opinion of this Court, in exercise of powers of judicial review under Article 226 of the Constitution, which, in terms of Satyawati Tondon (supra), has to be exercised with greater caution, care and circumspection, matters regarding validity of actions of a secured creditor, initiated under the provisions of the Act, can be examined by the court only in reference to the policies and guidelines of the RBI and/or in reference to the provisions of Act, in the light of the discussions above, and no more. In the said judgment, the Apex Court, in paragraph 13, has acknowledged that sub-section (3-A) of Section 13 lays down that the borrower may make a representation in response to the notice issued under Section 13(2) and challenge the classification of his account as non-performing asset as also the quantum of amount specified in the notice, which also can be tested in the background of policies and guidelines, issued by the RBI in the matter, and may also be a subject matter of judicial review, within its narrow scope as indicated earlier. In this too, actions of a secured creditor under various clauses of sub-section (4) has to be left for the borrower to challenge before the Tribunal in terms of the provisions of Section 17, and as laid down by the Apex Court in the said judgment. The question is answered accordingly.

27. But, before reverting to the facts of the present case, it may also be noticed that the Apex Court in Mardia Chemicals (supra) has acknowledged the application of principles of lenders liability in such transactions, in paragraph 71 thereof, and has held that the borrowers cannot be left remediless in case they have been wronged against or subjected to unfair treatment violating the terms and condition of the contract. The observations of the Court are:--

71. Arguments have been advanced as to how far principles of lenders liability are applicable. Whatever be the position, however, it cannot be denied that the financial institutions, namely, the lenders owe a duty to act fairly and in good faith. There has to be a fair dealing between the parties and the financing companies/institutions are not free to ignore performance of their part of the obligation as a party to the contract. They cannot be free from it. Irrespective of the fact as to whatever may have been held in decisions of some American courts, in view of the facts and circumstances and the terms of the contract and other details relating to those matters, that may or may not strictly apply, nonetheless, even in absence of any such decisions or legislation, it is incumbent upon such financial institutions to act fairly and in good faith complying with their part of obligations under the contract. This is also the basic principle of the concept of lenders liability. It cannot be a one-sided affair shutting out all possible and reasonable remedies to the other party, namely, borrowers and assume all drastic powers for speedier recovery of NPAs. Possessing more drastic powers calls for exercise of higher degree of good faith and fair play. The borrowers cannot be left remediless in case they have been wronged against or subjected to unfair treatment violating the terms and conditions of the contract. They can always plead in defence deficiencies on the part of the banks and financial institutions.

28. But, where and in what manner a borrower can find his remedy in such matters, on whatever grounds available to him, has not been elaborated by the Apex Court, nor is it necessary for this Court to go into that aspect of the matter, as the submissions of learned counsel for the petitioner did not raise that issue before this Court for consideration.

29. Now, coming to the facts of the present case, the Bank claims that it had issued a notice to the petitioner in terms Section 13(2) of the Act on 6.3.2009 (Annexure-F) through registered post, which, as per its own pleadings in paragraph 23 of the counter affidavit, returned unserved. Thereafter, apparently, Bank did not take any further step to get the notice validly served on the petitioner in the manner prescribed under Rule 3 of the Rules, 2002, as reproduced above. A bare perusal of the said notice also makes it clear that it can hardly be termed as conforming to the mandate of sub-section (3). After that, correspondences were exchanged between the parties, in which the letters of the Bank dated 23.4.2009 (Annexures-7 & 31), and dated 16.11.2009 (Annexure-35) are fit to be noticed, which show that proposal of petitioner for rehabilitation and for release of further instalment was under consideration and enquiries were being made in respect of progress of the project for the purpose. Significantly, in these letters no mention is found of the said Section 13(2) notice. There are some other letters also of the Bank referred to in the pleadings of the petitioner, but, since copies thereof have not been placed on record by the petitioner, this Court cannot take cognizance of the same, though in the counter affidavit, their existence has not been denied. There is also a pleading in paragraph no. 22 of the counter affidavit of the Bank that "when the petitioner neglected to repay the loan amount his account became NPA but subsequently some amount was deposited in the account and the account of the petitioner became performing assets and as such some loan amount was disbursed thereafter the statutory Auditor at the time of audit found the account of the petitioner unsatisfactory and as such declared NPA with effect from 31.3.2007". This gives an indication that the account of the petitioner was declared NPA the second time from a retrospective date, though in the meanwhile some loan amount was disbursed to it. The letter of the Bank dated 24.8.2011 (Annexure-22) was the final reply to the petitioner, in which, by hand, it is inserted that a copy of the said notice dated 6.9.2009 (correct date is 6.3.2009, vide Annexure-F), issued in terms of sub-section (2), was being enclosed. This insertion, by hand in the said letter dated 24.8.2011, does not inspire confidence of this Court, especially as it does not find mention in its comprehensive reply by the petitioner dated 5.9.2011 (Annexure-37/A). Thus, for an account which is said to have been classified as NPA w.e.f. 31.3.2007, notice in terms of sub-section (2) of Section 13 of the Act is said to have been issued on 6.3.2009 and possession notice, in terms of sub-section (4), is issued on 20-21.6.2011, i.e. more than two years after.

30. However, this Court finds that, at least through Annexures-17 & 17/A dated 20th and 21st of June 2011, which were possession notice issued under Section 13(4) of the Act, petitioner had come to know that Bank had already taken steps under the SARFAESI Act. It is true that petitioner did object to it immediately, with a stand that it had not received any notice under Section 13(2). But instead of challenging the action of the Bank before this Court or before the Tribunal, it kept on insisting for start of disbursement and enhancement of limit of his loan only. Petitioners proposal was refused by the Bank through its letter dated 27.8.2011 (Annexure-22), by which it was also informed that a Section 13(2) notice had been issued to it earlier. But thereafter also it did not move this Court or the Tribunal taking a stand that Bank had initiated action without service of a notice in terms of sub-section (2) and thus denying it the opportunity to object under sub-section (3-A). By letter dated 5.9.2011, petitioner was again informed that SARFAESI proceeding was already on and hence it should take steps to repay the entire dues. But in response, petitioner deposited only critical amount of the two loans with a request to regularize them and nothing further. There are several other letters of the petitioner on record written to the Bank thereafter, with an attempt to get the loans regularized and get the disbursement started again. This went on for months, and finally petitioner took steps to file this writ application before this Court only on 2nd of March 2012, which was actually filed, after removing defects, on 22.8.2012. This course of action on the part of petitioner clearly shows that it had acquiesced to the actions of the Bank and had kept on making attempts, all throughout, only to get the loans regularised and get fresh disbursements. However, after the notices dated 20-21.6.2011, Bank did not show any inclination, at any point of time, to consider the requests of the petitioner favourably.

31. In the circumstances, this Court finds that, only on account of delay and laches on its part in raising his grievances in respect of breach of provisions of sub-sections (2), (3) and (3-A) by the Bank, in time, petitioner has disentitled itself to get any relief from this Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. So far as matters of accounting, regularization of loan accounts, release of installments of remaining amount of loans or drawing up a fresh schedule of repayment are concerned, it is for the contracting parties to come to a meeting point in accordance with the policies and guidelines of the RBI, for which petitioner has the liberty to take steps in accordance with law or to approach the Tribunal under the provisions of Section 17 of the Act. In the result, following the law laid down by the Apex Court in Satyawati Tondon (supra), this writ application is, dismissed.