Case Law Details
Punjab National Bank Vs. Mithilanchal Industries Pvt. Ltd. (Gujarat High Court)
In the present case, the borrower took an objection of non-compliance of sub-section (3), in his objection / representation given sub-section (3A), but despite the same the Bank – Secured Creditor in the present case rejected the objection instead of ensuring the compliance of sub-section (3). A perusal of the notice under sub-section (2) which is already reproduced above does not spell out the details of the amount payable by the borrower, but only mentions a lump sum aggregate amount. The dispute with regard to rate of interest being charged by the bank was pre-existing the stage of section 13, and therefore, when the borrower called upon the Secured Creditor to provide the details, as a fair and reasonable Secured Creditor – the appellant Bank ought to have come out with such details, justification of such details would be a different aspect, but the Bank could not withhold the details. Even the details of the secured assets had not been correctly provided as recorded by the Tribunal, which finding has not been altered or upset at any subsequent stage. If the Bank withholds the details, as in the present case, then such action cannot be sustained.
The above discussion further strengthens theanswers to both the questions. Firstly that whether the bank was required to spell out the details or not, the answer would be, `YES’ and the Bank is required to furnish the details on its own and all the more when the borrower demands it. Secondly, whether under Section 17, the Tribunal could examine the validity of the notice under Section 13(2), the answer would again be `YES’. The Tribunal has to examine the validity and only based upon the validity of notice and validity of discharge of obligation of the secured creditor under sub-sections (2), (3) and (3A) that the Tribunal would hold that the action under sub-section (4) to be valid. In the present case, such action having been held to be invalid and as the same is apparent from the record, no error could be found in the order of the Tribunal. The appellate Tribunal as also the learned Single Judge rightly dismissed the appeal and the writ petition filed by the Secured Creditor – the appellant Bank. Accordingly, the present appeals fail and are liable to be dismissed. It is ordered accordingly.
The present case, as highlighted by us in the paragraphs hereinabove, is a classic example how the judicial system is getting clogged with frivolous litigation. The facts and the circumstances that have led to the filing of the present appeal before us, leave us with no choice but to impose exemplary costs on the appellant Secured Creditor. The Hon’ble Supreme Court has stressed in a catena of matters that costs should be in real and compensatory terms and not merely symbolic. We are of the firm opinion that costs act as a deterrent to vexatious, frivolous, impractical and unnecessary litigation. The whole objective behind imposition of costs is that every litigant, especially big public sector entities, like the appellant bank, would have to think twice before engaging in such litigation, as the one before us.
The appellant Secured Creditor ought to have at the first instance corrected its mistake by issuing a fresh notice providing the details of the amount payable by the Borrower as also correcting the details of the secured assets rather than continuing to challenge it repeatedly before every possible forum and wasting its time. The litigation is ultimately going to cause suffering to the appellant Bank i.e. Secured Creditor.
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