1 IBIt ^it M lif ^m. ts) 1» 1IIII II1i^ •ss' ^M 11 i'iih. '••: :1 \ 9 ^t^. '^K^ 3?ts ::§.:^r' I.^Ii:^: t|ii " 1 ••s'l^S^ ^^ JJ '^•- c^ AF^. mGH COURT OF CHHATTISGARH AT BILASPUR WRIT PETITION (227) No. 2462 of2010 PETITIONER : Ramdas Agrawal. VERSUS RESPONDENTS : Collector (District Magistrate) District Durg & another. WRIT PETITION UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA SB: Hon'ble Shri Satish K. Agnihotri, J. Present: Ms. Sharmila Siaghai, Advocate for the petitioaer. Shri Shashank Thakur, Panel Lawyer for the State/respondent No. 1 Shri Abhishek Sinha, Advocate for the respondent No. 2. ORDER(ORAL) (Passed on Olstday of July, 2010) 1. Challenge in this petition is to the order dated 31.03.2010 (Annexure P/6) passed by the respondent No. 1, i.e. Collector (District Magistrate), Durg, in Case No. 22/B-121/2009-2010, in exercise of its power under the provisions of section 14 of the Securitisation and Reconstmction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinqfter referred to as 'theSARFAESIAct,2002'). 2. The indisputable facts, relevant for adjudication of the case is that the petitioner obtained a fmancial assistance to the time ofRs. 2.35 crores in the shape of cash-credit limits from the respoadent No. 2- Bank. A demand notice under section 13(2) ofthe SARFAESI Act, 2002 was issued on 05.02.2008 (Annexure P/l) for recoveiy of a l^^s^*^^ '!Ss3^^S^^ .>%^^^^^^ ';'S^!i£^S^^S y^iSff^sss ^"ssssssws iii sum of Rs. 2,49,33,035.52 p. Symbolic possession of the mortgaged three properties namely, factory, land and building including plant and machinery, open land attached to the factory and residential house at Bhilai, was taken.The petitioner, being aggrieved, preferred a writ petition being W.P.(C) No. 2425/2009, questioning the legality and validity ofthe order dated 22.04.2008 passed under the provisions of section 13(4) of the SARFAESI Act, 2002. The said petition was dismissed on 9.7.2009 (Annexure R/2-1) holdiag that the writ petitioa was not maintainable on account of availability of statutory altemative remedy under the provisions of section 17 of the SARFAESI Act, 2002, granting liberty to the petitioner to avail the altemative statutory remedy under the provisions of SARFAESI Act, 2002. Thereafter, the petitioner preferred an appeal being Second Appeal No. 101/2009 before the Debt Recovery Tribunal (for short 'the DRT') at Jabalpur. Alongwith memo of appeal, an application for interim relief was also filed for restraining the respondent-Bank from taking possession ofthe residential house and removal ofthe seal on the part of the house already taken possession and further restoration of possession of the same. (Annexure R/2-2). The leamed Tribunal, after having heard all the concemed parties, dismissed the application for interim relief oa 17.7.2009 (Annexure R/2-2). Thereafter, according to learned counsel for the respondent-Bank, the petitioner preferred a Writ Petition No. 7217/2009 in the High Court of Madhya Pradesh at Jabalpur, challenging the order dated 17.7.2009 passed by the DRT, Jabalpur. Indisputably, the said writ petition was also dismissed by the leamed Division Bench reserviag liberty to the petitioner to avail alternative remedy under the provisioas of section 18 of the SARFAESI Act, 2002 with a further direction that for a period of one week, status quo as obtained on that date, would be maintained in respect of the petitioner's residential house. It is not clear asto whether any appeal under 18 of the SARFAESI Act, 2002 was prefen-ed or not on account of rejection of interim application by the DRT on 17.07.2009 and subsequently, dismissal of the writ petition by the High Court of Madhya Pradesh ia W.P. No. 7217/2009 on 27.7.2009 (Annexure A/l). The respondent-Bank preferred an application under section 14 of the SARFAESI Act, 2002 to the District Magistrate, Durg on 06.10.2009 (Annexure P/3). The District Magistrate, after having afforded an opportunity ofhearing and considering the objection ofthe petitioner, passed the order for handing over the possession ofthe residence situated at plot No. 11-A, Khursipar, Bhilai, to.the respondent-Bank. Thus, this petition. 3. Ms. Sharmila Singhai, leamed counsel appearing for the petitioner submits that the District Magistrate could not have passed the order in hurry without affording an opportunity of heariag to the petitioner. Ms. Singhai further submits that on 08.03.2001, the petitioner made an application through his agent for adjourning the ^I t-^,-'/:.^;., v^ "^n: 1 matter. The same was not considered and the final order was passed. Thus, the impugned order is vitiated. On the other hand, Shri Abhishek Sinha, learned counsel appearing for the respondent-Bank submits that the petitioner has filed proper response/reply to the application filed by the respondent-Bank before the District Magistrate and thereafter, on the date of hearing, the agent/representative ofthe petitioner declined to argue the matter, thus, the District Magistrate took up the matter and passed the order after considering response of the petitioner. The provisions of section 14 of the SARFAESI Act, 2002 is in the nature ofexecution ofthe order passed by the DRT aad there is not much scope to contest the matter and get it re-agitated. Having heard leamed counsel for the parties, pemsed the pleadings and documents appended thereto, it is evident that the order under section 13(4) ofthe SARFAESI Act, 2002 was passed, thereafter, the statutory remedy of appeal under section 17 of the SARFAESI Act, 2002 was resorted to by the petitioner. The petitioner, without preferring a further appeal under section 18 of the SARFAESI Act, 2002 to the appellate Tribimal, preferred to file a writ petition which was dismissed and pursuant to that, the Bank took recourse to remedy of taking over the possession of the property in dispute under the provisions of section 14 ofthe SARFAESI Act, 2002. Under the provisions of section 14 of the SARFAESI Act, 2002, the Chief Metropolitan Magistrate or District Magistrate has to arrarige to take possession of such asset and documents relating thereto and forward such assets and documents to the secured creditor. There canaot be any adjudication on the nature ofthe land or on the question asto whether any due was payable or whether payment was made or not. Section 14 ofthe SARFAESI Act, 2002, reads as under: "14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset. - (1) Wbere the possession of any secured asset is required to be taken by the secured creditor or ifany ofthe secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purp.ose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, oa such request being made to him - (a) take possession of such asset and documents relatiag thereto; and (b) forward such assets and documents to the secured creditor. (2) For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary. (3) No act ofthe ChiefMetropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority." 6. Leamed counsel appearing for the respondeat-Bank relies on a decision of leamed Division Bench of Bombay High Court, in M/s. Trade Well a Proprietorship Firm,Mumbai & Anr. v. Indian Bank & Another. , wherein it was observed as under: "90. Following conclusions emerge from the above discussion. 1 .2. The bank or financial institution shall, before making an application under section 14 of the NPA Act verify and confirm that notice under section 13(2) ofthe NPA Act is given and that the secured asset falls within the jurisdiction of CMM/DM before whom application under section 14 is made. The bank and fmancial institution shall also consider before approachiag CMM/DM for an order under section 14 ofthe NPA Act, whether seetion 31 of the NPA Act excludes the application of section 13 and 14 thereofto the case on hand. CMM/DM acting under section 14 ofthe NPA Act is not required to give notice either to the rd borrower or to the 3 party. XXX XXX xxx' I am in respectful agreement with the observations made by leamed Division Bench in M/s. Trade WeU (supra). 7. The Supreme Court, in Authorised Officer, Indian Overseas Bank & Another v. Ashok Saw Mill, observed as under: "37. The consequences ofthe authority vested in the DRT under sub-section (3) of Section 17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue ofSection 13(4) ofthe Act. The legislature by including sub-section (3) in sectioa 17 has gone to the extent of vestiug the DRT with authority to even set aside a transaction including sale and to restore possession to the borrower in appropriate cases. Resultantly, the submissions advanced by Mr. Gopalan and Mr. Altaf Ahmed that the DRT has no jurisdiction to deal with a post- Section 13(4) situation, cannot be accepted." ' (2007) CRLJ 2544 2 (2009) 8 SCC 366 -tf!<ia""°¥.~a.. /yv^."'%. 1 ^l, 'i i^^c.^' ^ .rf*'' 'ci!£sro"t*'?' 8. In the case on hand, the petitioner has already filed response and on the date ofhearing, the agent/representative ofthe petitioner did not feel to argue the matter, however, there was an application for adjoumment ofthe case. It is not clear asto whether or not the said application was pressed as response of the petitioner was already on record and it is recorded in the impugned order that no argument was advanced by the agent/representative of the petitioner. Thus, the impugned order was passed by the District Magistrate. The same does not suffer from any irregularity or illegality warranting interference by this Court. 9. For the reasons stated hereinabove, the writ petition is dismissed. 10. There shall be no order asto costs. Sd/- SatishK.Agnlhotri Judge Amit