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2016 (5) TMI 822
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....g created in favour of the respondent-bank by the principal borrowers. The principal borrowers executed Agreement to Sale with possession in favour of the appellant and after the Agreement to Sale has been executed, the petitioner came in possession of the property in question. While executing the Agreement to Sale, it was not declared before the appellant that the property is mortgaged. The appellant issued the title notice with regard to the property in question in the concerned newspaper and thereafter executed the Agreement to Sale. 2.2 It is further the case of the appellant that when the sale deed was not executed in favour of the appellant in pursuance to the Agreement to Sale, she filed Special Civil Suit No.592 of 2014. The Court Commissioner was appointed and possession of the appellant was established and thereafter the learned Civil Judge, Ahmedabad (Rural) granted stay on 26.12.2014 in favour of the appellant. 2.3 It is stated that when the officer of the respondent-bank came at the residence of the appellant for affixing the notice under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (her....
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....and observing that the petitioner-appellant can avail the alternative remedy by filing the appeal under Section 17 of the SARFAESI Act before DRT. It is contended that the said remedy cannot be said to be an efficacious alternative remedy and the present appellant who is the subsequent purchaser of the property in question cannot challenge the order passed by the District Magistrate under Section 14 of the SARFAESI Act. Further, the Tribunal cannot go into the questions which are raised before this Court in the petition and therefore the learned Single Judge ought to have considered the matter on merits and therefore the impugned order be quashed and set aside. 4.3 Learned advocate Mr.Parekh thereafter submitted that the mortgage created in favour of the respondent-bank was not registered under Section 17 of the Registration Act. Thus, in absence of registration of mortgage, the present appellant was not aware about the creation of mortgage in favour of the bank with regard to the property in question and therefore no fault can be found with the appellant when she has purchased the property in question. 4.4 Learned advocate Mr.Parekh placed reliance on the decision rendered b....
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....s thereafter proceeded further and on 9.4.2015, the respondent-bank filed an application under Section 14 of the SARFAESI Act for taking over the possession of the property in question. On 14.5.2014, the District Magistrate issued notice to the borrowers. In spite of the notice issued, none appeared and therefore it was ordered that the notice be affixed on the property in question. On 23.7.2015, the said notice was affixed on the premises in question. In spite of affixation of the notice, the appellant did not appear before the learned Magistrate and thereafter also the matter was adjourned on two occasions and ultimately the District Magistrate passed an order on 17.10.2015 which is impugned in the petition. 5.1. In the aforesaid background of the facts, learned advocate Mr.Chokshi mainly contended that though there is a specific reference in the Agreement to Sale and in the Power of Attorney executed by the borrowers in favour of Jyotsnaben and Geetaba and even in the Agreement to Sale which is executed in favour of the appellant she cannot now be permitted to contend that she was not aware about the mortgage created by the borrowers with regard to the property in question in....
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.... with Jyotsnaben and Geetaba with regard to the property in question and immediately thereafter on 28.2.2014, the said purchaser/borrower executed Power of Attorney in favour of Jyotsnaben and Geetaba. From both the aforesaid documents, it is clear that the borrowers have specifically stated in the Agreement to Sale as well as Power of Attorney about the loan taken by them from the respondentbank. When the borrowers committed default in payment of the loan amount, the respondent-bank issued notice on 27.8.2014 under Section 13(2) of the SARFAESI Act and thereafter proceeded further under the provision of SARFAESI Act. On 28.6.2014, Jyotsnaben and Geetaba executed the Agreement to Sale in favour of the appellant in capacity of Power of Attorney holder of the borrowers. In the said document also, there is a specific reference with regard to the loan taken by the borrower from the respondent-bank with regard to the property in question. It is further clear from the record that after the issuance of the notice under the SARFAESI Act under Section 13(2) on 27.8.2014. On 30.8.2014, the appellant filed the suit for specific performance of Agreement to Sale against Jyotsnaben and Geetaba. ....
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....s of the present case, whether this Court should entertain the petition filed by the petitioner-appellant or not? 9. Section 17 (1)of the SARFAESI Act provides that: "17(1) Right to appeal: (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may take an application along with such fee, as may be prescribed] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken." 10. In the case of Kanaiyalal Lalchand Sachdev (supra), the Hon'ble Supreme Court has held and observed in paragraphs 21 and 22 as under: "21. In Indian Overseas Bank & Anr. Vs. Ashok Saw Mill, the main question which fell for determination was whether the DRT would have jurisdiction to consider and adjudicate post Section 13(4) events or whether its scope in terms of Section 17 of the Act will be confined to the stage contemplated under Section 13(4) of the Act? On an examination of the provisions contained in Chapter III of the Act, in particular Sections 13 and 17, this Court held as und....
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....y by filing an application under Section 17(1). The expression `any person' used in Section 17(1) is of wide import. It taken within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legis....
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....m relief, it must deposit the aforesaid amount with the bank subject to further orders of this Court, failing which the bank should be at liberty to take possession, but subject to further orders of this Court. 4. Hence, by ad-interim order, it is directed that there shall be stay against execution of the order of the Ld. Magistrate under section 14 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, on condition that the petitioner deposits the amount of Rs. 3,50,32,281/- [Rupees three crore fifty lac thirty two thousand two hundred eighty one only] with the respondent- bank within a period of one week from today. 5. It is also observed and clarified that if there is failure to comply with the condition to deposit the amount of Rs. 3,50,32,281/- [Rupees three crore fifty lac thirty two thousand two hundred eighty one only], the ad-interim order shall automatically stand vacated and the bank shall be at the liberty to take possession of the property in question as per the impugned order of the Ld. Magistrate, but such action of the bank for taking up possession shall be subject to further order of this Court....