. . . . ¥ ) , I N T H E H I G H C O U R T O F J U D I C A ‘ T U R E A T B I L A S P U R J W R I T P E T m O N { c 1 N o M Q g é / o f z o g l : K V i s h w a n a t h G u p t a , s o n o f S h r i J a g a n n a t h G u p t a , a g e d a b o u t 3 6 y e a r s , r e s i d e n t o f S h i v a m V i h a r , M u n g e l i R o a d , B ' i l a s p u r . ( C . G . . ) C 2 ? ! w t / P E T I T I O N E R M a " ° ° ’ “ R E S P O N D E N g ? : . ‘ , « / 1 . S t a t e B a n k o f m d i a , t h r o u g h t h e C h i e f M a n a g e r , S t a t e B a n k o f l n d i a , P h a p h a d i h B r a n c h , R a i p u r . ( C . G . ) ( 2 1 ’ C h a n d e l a H o u s i n g P r i v a t e L i m i t e d , 7 0 A n a n d N a g a r , R a i p u r ( C . G . ) / 3 . A g r o h a G r e h N i r m a n S a h k a r i S a m i t i , S i d d h a r t h C h o w k , T i k r a p a r a , R a i p u r ( 0 . 6 . ) 4 . ( / R . K . D h a m a n i , R e s i d e n c e o f N - 1 9 , S e c t o r 2 , A g r o h a N a g a r , R a i p u r , t h r o u g h B r a n c h M a n a g e r , S t a t e B a n k o f l n d i a , P h a p h a d i h B r a n c h , R a i p u r ( C . G . ) . T h e C e n t r a l ” B u r e a u o f i n v e s t i g a t i o n , R a i p u r ( C . G . ) . ’ \ 9 “ W R I T P E T I T I O N U N D E R A R T I C L E 2 2 6 1 2 2 7 O F T H E O N S T I T U T I O N O F l N D l A W 1 . P a r t i c u l a r s o f t h e Q e t i t i o n e r : - A s p e r t h e c a u s e t i t l e . 2 . P a r t i c u l a r s o f t h e r e s g o n d e n t s : - M AA) /fl^ — 'iax>-t_ HIGH COURT OF CHHATTISGARH ?BILASPUR WRIT PETITION (C) N0.3466 OF 2007 PETITIONER Smt. Kavita Sharma RESPONDENTS Versus State Bank of India & Others And W.P.(C) No. 4236 of 2007, W.P.No.1172 of 2006 and W.P.(C) Nos. 1462, 1562, 1577, 1578, 1579, 3467, 3468, 3469, 3470, 3471, 3472, 3478, 3479, 3480, 3481, 3487, 3488, 3725, 4232, 4233, 4234, 4235, 4237, 4238, 4239, 4240, 6684, 6703, 6704, 6705, 6706, 6707, 6708, 6709, 6710 & 6712 of 2007. Postfor pronouncement ofthe orders on the _^_ day of August, 2010 Sd/- Satish K. Agnihotri Judge HIGH COURT OF CHHATTISGARH^ BILASPUR WRIT PETITION (C) N0.3466 OF 2007 PETITIONER Smt. Kavita Sharma RESPONDENTS Versus State Bank of India & Others And W.P.(C) No. 4236 of 2007, W.P.No.1172 of 2006 and W.P.(C) Nos. 1462, 1562, 1577,1578,1579, 3467, 3468, 3469, 3470, 3471, 3472, 3478, 3479, 3480, 3481, 3487, 3488, 3725, 4232, 4233, 4234, 4235, 4237, 4238, 4239, 4240, 6684, 6703, 6704, 6705, 6706, 6707, 6708, 6709, 6710 & 6712 of 2007. (Writ petitions under Articte 226/227 of the Constitution of India) Singte Bench : Hon'ble Shri Satish K. Agnihotri, J. Present:- Shri B.P. Sharma, Shri Varunendra Mishra, Shri K. Sharma and Shri Vivek Chopra, Advocates for the petitioners. Shri Sanjay K. Agrawal, Shri P.S. Koshy, Shri Gautam Bhaduri, Shri Rajeev Shrivastava, Shri Sudeep Agrawal, Shri Anumeh §hrivastava,Shri Abhay Tiwari, Shri N.N. Roy & Ms. Pushpa Dwivedi, Advocates for the respective respondents. Shri Neelabh Dubey, Advocate appears as amicus curiae. ORDER (Delivered on this ^ day of August, 2010) 1. W.P.(C) Nos. 3466 & 4236 of 2007, W.P.No.1172 of 2006 and W.P.(C) Nos. 1462, 1562, 1577, 1578, 1579, 3467, 3468, 3469, 3470, 3471, 3472, 3478, 3479, 3480, 3481, 3487, 3488, 3725, 4232, 4233, 4234, 4235, 4237, 4238, 4239, 4240, 6684, 6703, 6704,6705,6706,6707, 6708, 6709, 6710 & 6712 of 2007, involve the same question of law and common facts and, as such, they are being disposed of by this common order. However, for the purpose of thisorder the facts, as mentioned in W.P. (C) No. 3466 of 2007 arebeing referred. ^) The facts, in nutshell, as projected by the petitioners, for proper adjudication of the cases, are that the petitioners came to know that respondent No.S/Agroha Greh Nirman Sahkari Samiti (respondent No.3 in W.P.(C) No.3466 of 2007) is selling plots of land and for construction of the houses thereon also providing an assistance of the builder i.e. respondent No.2/Chandela Housing Private Limited (respondent No.2 in W.P.(C) No.3466 of 2007). The petitioners booked ptofs and on account of insufficient funds the petitioners approached the respondent/State Bank of India for obtaining loans. According to the petitioners, the bank authorities obtained the signatures of the petitioners on some blank documents. Thereafter, the sale deed was executed by the respondent No.3 in favour of the petitioners. After granting loan by the bank, the same has to be paid to the builder on installment basis/phase wise manner i.e. atthe plinth level, lintel levef, slab level, etc., subject to . the prior intimation to the petitioner/borrower. However, in the present case, the bank authorities released the entire loan amount witbin.a period of one and half months from the date of sanction of loan at one stroke and paid the same to the builder without prior intimation to the petitioners in an illegal and arbitrary manner and against the provisions of the guidelines framed by the authorities concerned from time to time. After making payment of the same the builder has not constructed the houses well within the • stipulated period and handed over the same to the petitioners. Thereafter, the petitioners approached the builder, who in turn assured them to construct the houses within a period of 18 months, as per the agreement of building construction. ^.^p^^^^s^^^' K Ri B M?. B iSij.!, S^! B»( J1l; nu;. m 4. In the meanwhile, the respondent bank vide notice dated 25-7-2005 (Annexure P/3 to W.P. (C) No.3466 of 2007) published the possession notice (for immovable property) under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforeement of Security Interest Act, 2002 (for short "the Act, 2002") on the ground that the borrowers having failed to pay the loan amount. After knowing about the said notice the petitioners approached the builder. The builder promised the petitioners that he will make the payment to the bank, if he fails to deliver the possession of the house to the petitioners within time and he will also protect the interest of the petitioners before the bank. The petitioners also approached the bank authorities and requested them that no liability can be fastened on them, as the bank has make the payment at one stroke to the builder without prior intimation to the petitioner. In spite of frantic efforts made by the petitioners, the respondent bank vide general auction proceedings dated 17-2-2006 (Annexure P/5 to W.P. (C) No.3466 of 2007) the property in dispute was sold on auction in an illegal and arbitrary manner. Against the said action of the respondent, the petitioners also lodged a report for conducting enquiry through the Central Bureau of Investigation (for short "the CBI"). The enquiry is pending consideration. Thus, these petitions. 5. Shri Sharma, leaned counsel appearing with Shri Varunendra Mishra, Shri K. Sharma and Shri Vivek Chopra, learned Advocates for the petitioners, would submit that the action of the respondent bank in taking possession and thereafter, selling the property in dispute without there being any valid authority in this regard is illegal, arbitrary and against the provisions of law. The respondent '..^S-WS^S^^StgS-SSSS^a'. ._l_n __ 6. bank violated the mandatory norms prescribed under the provisions of the Act, 2002. Shri Sharma would further submit that petitioners have been cheated by the bank authoritjjes as well as the builder. The property mortgaged by the petitioner is only the plot and not the superstructures standing thereon, however, the respondent bank has not only sold the plot of land but also given the possession of the superstructure. Shri Sharma would next submit , that as per clause 11 of the agreement, the plot of land cannot be sold for any purpose whatsoever for a period of 10 years and if the petitioner do not make any payment within a period of three years, the builder has right to pay price of the plot to the nnember concerned and obtained possession of the said plot, in accordance with law. Under the clauses of the said agreement, the petitioner cannot mortgage the plot with any person without priorpermission of the respondent No.3 society. ' Shri Sanjay K. Agrawal, learned counsel appearing with Shri Gautam Bhaduri, Shri Sudeep Agrawal & Shri Anumeh Shrivastava, learned Advocates for the respondent Bank, would submit that the petitioners failed to pay the loan of the respondent Bank thereby defaulted in repayment of the said loan. The loan account of the petitioners was therefore classified as Non Performing Asset (for short "NPA") in the books of the respondent Bank. The respondent Bank has issued a demand notice on 18-1-2005 under Section 13 (2) of the Act, 2002, thereby calling upon the petitioners to discharge in full their liabilities within a period of sixty days from the date of the said notice. The petitioners, however, failed and neglected to repay the loan of the respondent Bank. After the mortgage of the said plot by the Bif; • BSl Bl 8. petitioners with the respondent Bank as security of the said loan, the loan amount was disbursed according to the advise of the petitioner/borrower. The petitioners instead of repaying the Bank dues according to their own version approached the respondent No.2 to resolve the issue, which itself indicates that the petitioners were perhaps hand in glove with the respondent No.2, therefore, approached him to settle the Bank dues otherwise a pmdent person would have approached the Bank to make the payment of dues. Learned counsel appearing for the respondent Bank would further submit that the action of the respondent Bank is strictly in accordance with law and in consonance with the provisions of the Act, 2002. As far as the secured asset is concemed, no criminal case is pending with the CBI and, therefore, the allegation made by the petitioners to the officers of the respondent Bank is irresponsible and incorrect statement and, as such, the question of fraud does not arise at all; Learned counsel would next submit that -once the measures have been taken under the provisions of the Act, 2002 the statutory remedy is provided by filing an appeal under Section 17 (1) of the Act, 2002 before the Debts Recovery Tribunal (for short "the DRT") having jurisdiction in the jnatter, therefore, the petitioners ought to have preferred an appeat before the DRT instead of filing of writ petition before this Court. When a statutory forum is created by law for redressal of grievance and that too in fiscal statute a writ petition should not be entertained ignoring the statutory dispensation. At this juncture, Shri Sharma, learned counsel appearing for the petitioners, would submit that if this Court reaches to the m.9 conclusion that the petitioners should approach the DRT, in accordance with law, then the petitioners pray for continuance/grant of interim order till disposal of the appeal by the DRT. 9. Shri Koshy, learned counsel appearing with Shri N.N. Roy, learned Advocate for the respondent/builder, would submit that CBI authorities found that various irregularities of criminal in nature in sahction of loan and in most of the cases it was found that documents were not signed by the borrowers/guarantors. The disbursement of the loan amount has not been made according to the construction of houses. In fact, the bank authorities actively involved in grabbing the loan amount. The respondent/builder invested huge amount in construction of houses, which was to be recovered from the petitioners. 10. . I have heard learned counsel appearing for the parties, perused the pleadings and the documents appended thereto. 11. In the cases on hand, the dispute is whether the Bank authorities can recover the loan amount paid to the petitioners through the builder. 12. The indisputable facts are that the petitioners approached the respondent Bank for grant of housing loan. Housing loan was accordingly granted to the petitioners and it appears that the loan • was paid accordingly to the builder at the instance of the petitioners. Thereafter, according to para 2 of the return filed by the respondent Bank, demand notice under Section 13 (2) of the Act, 2002 was issued to the petitioners on 18/01/2005 for recovery of loan amount. The petitioners without making efforts to make A_n »;?; ^K repayment of loan, failed to file response to the demand notice issued under Section 13 (2) ofthe Act, 2002. 13. For want of response of the petitioneps, the respondent Bank proceeded under the provisions of sub-section (4) of Section 13 of the Act, 2002 by taking possession of the secured assets i.e. plot and construction, if any, thereon of the borrowers i.e. the . petitioners. Thereafter, the disputed property was put on auction on sale and sale was also effected in favour of third parties. The petitioners have approached this Court without taking recourse to the provisions of Section 17 (1) oftheAct, 2002. 14. In the instant petitions, the petitioners have sought for quashment of the recovery proceedings, as being void and non est in the eyes of law. The petitioners were afforded an opportunity of hearing to file response to the demand notice under sub-section (2) of Section 13 ofthe Act, 2002. The petitioners failed to respond to the same and thereafter, after completion of sixty days, the prescribed time, the Bank authorities have proceeded under the provisions of sub-section (4) of Section 1 3 of the Act, 2002. 15. In order to appreciate the point raised for consideration by this Court, it is necessary to quote the provisions of Section 13 (1) of the Act, 2002. "13. Enforcement ofsecurity interest. - (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of1882), 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." Provisions of Section 13 (1) of the Act, 2002 supports with the word "Notwithstanding anything contained in section 69 or .'%> K* ii section 69A of the Transfer of Property Act, 1882 (4 of 1882)......" makes it clear that a non obstante clause which gives ovemding effect over the provision of Act mentioned in the non obstante clause in case of conflict. (See Orient Paper and Industries Ltd. and another vs. State of Orissa and others p.12). 16. . The Supreme Court in Union of India and another vs. G.M. Kokil and others , while considering non obstante clause incorporated in Section 70 of the Bombay Shops and Establishments Act, 1948 held that it is well-known that a non obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment, that is to say,to avoid the operation and effect of all contrary provisions. 17. • The operation of the general Act may be curtailed by a later Special Act. In tenth edition of Principles of Statutory Interpretation by celebrated author Justice G.P. Singh, former Chief Justice, it is observed as under: "A general Act's operation may be curtailed by a later Special Act even if the general Act contains a non-obstante clause. The curtailment of the general Act will be more readily inferred when the later Special Act also contains an overriding non- obstante provision." (See Allahabad Bank vs. Canara Bank and another^) 18. The Supreme Court in Transcoce vs. Union of India and another, observed as under: "24.....The scheme of sub-sections (2), (3) and (3-A) of Section 13 of the NPA Act shows that the notice under Section 13(2) is not merely a show ISi) 1 1991 Supp(1)SCC81 21984(Supp)SCC196 3 (2000) 4 SCC 406 4 (2008) 1 SCC 125 y "•^•gnsiB An ^?T cause notice, it is a notice of demartd. That notice of demand is based on the footing that the debtor is under a liability and that his account in respect of such liability has become sub-standard, doubtful oraloss..... ' 33. Section 17 of NPA Act confers right to appeal. It inter alia states that any person including borrower, aggrieved by exercise of rights by the secured creditor under Section 13(4), may make an application to DRT as an appellate authority within forty-five days from the date on which action under Section 13(4) is taken. That application should be accompanied by payment of fees prescribed by the 2002 Rules made under the NPA Act. A proviso is added to Section 17(1) by amending Act 30 of 2004. It states that different fees may be prescribed for making the application by the borrower and the person other than the borrower. By way of abundant caution, an explanation is added to Section 17(1) saying that the communication of the reasons to the borrower by the secured creditor rejecting his representation shall not constitute a ground for appeal to DRT. However, under Section 17(2), the DRT is required to consider whether any of the measures referred to in Section 13(4) taken by the secured creditor for enforcement of security are in accordance with the provisions of the NPA Act and the Rules made thereunder. If DRT, after examining the facts and circumstances of the case and the evidence produeed by the parties, comes to the conclusion that any of the measures taken under Section 13(4) are not in accordance with the NPA Act, it shall direct the secured creditor to restore the possession/management to the borrower (vide Section 17(3) of NPA Act). On the other hand, after DRT declares that the recourse taken by the secured creditor under Section 13(4) is in accordance with the provisions of the NPA Act then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to any one or more of the measures specified under Section 13(4) to recover his secured debt. 66. We have already analysed the scheme of both the Acts. Basically, the NPA Act is enacted to enforce the interest in the financial assets which belongs to the bank/ Fl by virtue of the contract between the parties or by operation of common law principles or by law. The very object of Section 13 of the NPA Act is recovery by non-adjudicatory process. A secured asset under the NPA Act is an asset in which interestis created by the borrower in favour of the bank/ Fl and on that basis alone the NPA Act seeks to enforce the security interest by non-adjudicatory process. Essentialty, the NPA Act deals with the rights of the secured creditor. The NPA Act proceeds on the basis that the debtor has failed not only to repay the debt, but he has also failed to maintain the tevet of margin and to maintain value of the security at a level is the other obligation of the debtor. It is this other obtigation which invites appticability of the NPA Act. tt is for this reason, that Sections 13(1) and 13(2) of the NPA Act proceeds on the basis that security interest in the bank/Ft; needs to be enforced expeditiously without the intervention of the court/tribunal; that liability of the borrower has accrued and on account of default in repayment, the account of the borrower in the books of the bank has become non-performing. For the above reasons, the NPA Act states that the enforcement could take place by non-adjudicatory process and that the said Act removes all fetters under the above circumstances on the rights of the secured creditor." 19. The "debt" has been defined under the provisions of Section 2 (ha) of the Act, 2002 that "debt" shalt have the meaning assigned to it in clause (g) of section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short "the Act, 1993"). 20. The "secured debt" is defined under the provisions of Section 2 (ze) of the Act, 2002 that "secured debt" means a debt which is secured by any security interest. Security interest has been created by the property in dispute, which has been defined under "secured asset" in Section 2 (zc) of the Act, 2002. 21. The Supreme Court in State Bank of Bikaner & Jaipur vs. Ballabh Das & Co. and Others s, observed as under: "6. The question which arises for consideration is whether in view of these facts the amounts claimed by the Bank in the suits can besaid to be "debt" due and recoverable by the Bank from the respondents. Section 2 (g) of the Act defines the term "debt" as under: (1999) 7 SCC 539 &i 11 '2(g) 'debt' means any liability (inclusive . of interest) which is allegpd as due from any person by a bank...., in cash or othenwise, whether secured or unsecured, or whether payable under a decree or order of any civil court or otherwise and subsistingon.and legally recoverable on, the date ofthe application;' Section 17 of the Act provides that a Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the