TaxTMI 
TaxTMI 
2015 (8) TMI 1304
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....aha, Ms. Mekhla Kanji, Mr. Shamit Sanyal, Mr. Anirban Das, Ms. Sahana Nazim, Mr. Soumitra Mukherjee, Mr. Samrat Sen, Ms. Iti Dutta JUDGEMENT 1. Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter the SARFAESI Act) is at the centre of controversy in all but one of these writ petitions, which have been presented by borrowers/a secured creditor seeking to challenge orders passed thereunder by the Chief Metropolitan Magistrate, Calcutta/the District Magistrates of various districts in the state (hereafter the CMM/DM, wherever referred to jointly). The writ petition that stands out from this group, without challenging the section 14 order operating in the field, challenges the action of dispossession following such an order. Since interpretation of section 14 would arise as a matter of necessity, these writ petitions shall be governed by this common judgment and order. 2. Making a departure from the usual course of ascertaining the factual matrix of each writ petition first, I propose to record the submissions advanced in regard to the scope, effect and import of section 14 of the SARFAESI Act, the is....
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....n a manner applicable to everyone against whom an order under section 14(1) would operate. He further urged that there could be no other example of different categories of persons affected by the same order being entitled to challenge such order before different fora and that, if it is held that only lessees/tenants would be entitled to approach the High Court either under Articles 226 or 227 while other categories of aggrieved persons must challenge the order of the CMM/DM before the tribunal under section 17, it would create an anomalous situation : one category of persons aggrieved by the same order would have to challenge the same under section 17 and if unsuccessful, by preferring an appeal under section 18, and if further aggrieved, by challenging the appellate order under Article 226 or Article 227, while the lessees would be deprived of the tiers referred to in sections 17 and 18 and would only be entitled to challenge the order of the CMM/DM before the High Court under Articles 226 or 227. According to him, although the intention of the legislature was to bring in force a piece of legislation that would ensure speedy recovery of secured debts, the principles of natural jus....
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....d been considered in extenso, that an order passed by the CMM/DM under sub-section (1) of section 14 cannot be challenged before the tribunal under section 17 and the only remedy available to a person aggrieved by such order is to invoke the writ jurisdiction of the High Court under Article 226 or its power of superintendence under Article 227. 11. Mr. Saha submitted that a hearing at the pre-possession stage would result in filtering of frivolous applications made by authorised officers of secured creditors, without causing undue delay and disadvantage to those secured creditors having genuine claims and the same would ultimately advance the cause of justice. 12. Next, it was contended by Mr. Saha referring to Appendix IV appended to the Security Interest (Enforcement) Rules, 2002 (hereafter the 2002 Rules) that even before the amendments were effected in section 14, a person aggrieved had the right of approaching the relevant tribunal under section 17 before physical possession of the secured asset was taken. Measures under section 13(4) (excluding proceedings under section 14), according to him, commence with the issuance of a notice under Rule 8(1) of the 2002 Rules. Appe....
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....ing on an exercise to amend certain provisions of an enactment the legislature necessarily has to keep in mind the objects thereof. It was further argued by him that the amendments introduced in section 14 are clarificatory in nature and without any clear contra intention being expressed, neither the amendments change the nature and purpose of the parent statute nor can the same be read in a manner to cut down the rigours envisaged in the SARFAESI Act. 16. Citing the Constitution Bench decision reported in (2005) 2 SCC 409 (Prakash Kumar v. State of Gujarat) and reading paragraph 14 thereof, Mr. Mantha assiduously contended that special statutes call for a different manner of reading. He laid emphasis on the passage therein that more stringent the law, the less is the discretion of the Court and that stringent laws are made for the purpose of achieving its objectives, and it would be the duty of the Court to see that such intention of the legislature is not frustrated. If there is any doubt or ambiguity in the statute, the rule of purposive construction should be taken recourse to, to achieve the objectives. 17. The decision reported in (2007) 2 SCC 230 (Raghunath Rai Bareja ....
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....d the ratio decidendi is not to be discerned from any stray word or phrase read in isolation. 21. Responding to Mr. Saha's submission, it was submitted that the scheme of the SARFAESI Act is clear : natural justice in a limited sense is available at the stage of consideration of the borrower's objection/representation to the demand notice under section 13(2) but is excluded thereafter till possession of the secured asset is taken, and is again available before the tribunal under section 17. He urged that even though an administrative order under section 14 would have the potential of visiting a borrower with civil consequences, the law takes sufficient care of the situation by providing a remedy before the tribunal under section 17 where such order could be challenged in accordance with law. 22. However, Mr. Mantha agreed that possession of a secured asset cannot be taken by the secured creditor by employing force, when faced with resistance from the borrower/occupant of the secured asset, either under the SARFAESI Act or under the general laws of the country. According to him, should surrender of possession of the secured asset in favour of the authorised officer by ....
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....r issued by the RBI on July 1, 2014. A paragraph therefrom was referred to by him to emphasise that possession of a secured asset can only be taken over in accordance with the rule of law and not by brute force. The paragraph reads as follows: "Taking possession of property mortgaged/hypothecated to banks (xii) In a recent case which came up before the Honourable Supreme Court, the Honourable Court observed that we are governed by rule of law in the country and the recovery of loans or seizure of vehicles could be done only through legal means. In this connection it may be mentioned that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and the Security Interest (Enforcement) Rules, 2002 framed thereunder have laid down well defined procedures not only for enforcing security interest but also for auctioning the movable and immovable property after enforcing the security interest. It is therefore desirable that banks rely only on legal remedies available under the relevant statutes while enforcing security interest without intervention of the Courts." 26. My attention was further drawn by Mr. Rai to....
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....seeks it". Relying thereon, Mr. Sen submitted that the CMM/DM while exercising power under section 14 cannot wear different hats but must necessarily wear the hat of an adjudicator since he is called upon to exercise the judicial power of the State. 29. Referring to V. Noble Kumar (supra) once again and in particular to paragraph 21 thereof where the Court observed that the language of section 14 "originally enacted purportedly obliged the Magistrate receiving a request under Section 14 to take possession of the secured asset and documents, if any, related thereto in terms of such request without any further scrutiny of the matter", Mr. Sen stressed on the word 'purportedly' and while citing Black's Law Dictionary for tracing its meaning, submitted that the amendments in section 14 definitely conveys a different intention. 30. The Division Bench decision of the Gujarat High Court reported in AIR 2012 Gujarat 90 (Mansa Synthetic Pvt. Ltd. & ors. v. Union of India & anr.) was next relied on by Mr. Sen, wherein section 14 was analysed in great detail, and it was contended that even while upholding the constitutionality of such provision it was held that an order ther....
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....e SARFAESI Act does not envisage hearing to a defaulting borrower who resists the attempt of the secured creditor to take peaceful possession of the secured asset and drives him to seek assistance of the CMM/DM. He placed the statement of reasons and objects of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011 and submitted that no clear reason is discernible therefrom as to why the legislature felt it necessary to amend section 14; nonetheless, the amendments that have been introduced do not in any manner change the process from a non-adjudicatory to an adjudicatory one. 36. In support of his submission that hearing is not required to be extended by the CMM/DM, Mr. Bhattacharya relied on the Division Bench decision of the Gujarat High Court, reported in AIR 2011 Gujarat 147 (IDBI Bank Limited v. District Magistrate, Navsari). It was also submitted relying thereon that measures taken under section 14 though amount to measures taken under section 13(4) of the Act, in view of sub-section (3) of section 14 such measures cannot be called in question before any court or tribunal and hence, an order under section 14 can only be challenged before th....
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....e effect of the decisions reported in Satyawati Tondon (supra) and Kanaiyalal Lalchand Sachdev (supra), laying down the law that the borrower has a right of hearing under section 17 of the SARFAESI Act even before physical possession of the secured asset is taken. 42. Insofar as K. Arockiyaraj (supra) is concerned, it was submitted by Mr. Saha that the issue involved there was entirely different. The matter was referred to the Full Bench to decide whether reference to chief metropolitan magistrate in section 14 of the SARFAESI Act would include a chief judicial magistrate or not. The observations made in paragraphs 15, 16 and 18 of the decision are merely by way of declaration, but largely unsupported by any reason, discussion or justification. The only justification for the conclusions voiced in paragraph 18 may be found in paragraph 16 to the effect that since section 14 permits the delegation of authority by the CMM/DM, the order must be deemed to be administrative and not judicial inasmuch as judicial authorities have no power to delegate their functions in terms of the principle delegata potestas non potest deligari. According to him, this reasoning is erroneous. Section 14....
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...., 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, on such request being made to him-- (a) take possession of such asset and documents relating thereto; and (b) forward such asset and documents to the secured creditor: Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that-- (i) the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application; (ii) the borrower has created security interest over various properties and that the Bank or Financial Institution is holding a valid and subsisting security interest over such properties and the claim of the Bank or Financial Institution is within the limitation period; (iii) the borrower has created security interest over various properties giving the details of ....
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....ed by the Chief Metropolitan Magistrate or District Magistrate done in pursuance of this section shall be called in question in any court or before any authority." 46. Earlier to the amendments effected in section 14, what was required of the CMM/DM upon receiving an application from a secured creditor has been laid down in several decisions of the high courts of the country; I need not refer to all but two of them. 47. The first is the one reported in 2007 Cri. L.J. 2544 (M/s. Trade Well v. Indian Bank). There, the High Court of Bombay was concerned with the question whether the CMM/DM while dealing with the written request made by a secured creditor under section 14 of the SARFAESI Act is required to give notice to the borrower or any other person, who may be in possession of the secured assets, and give him a hearing. After referring to Transcore (supra), the Court answered the question in the negative and gave the following directions: "1. 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) of the NPA Act is given and that the secured asset falls within the juris....
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.... ***** Thus, it is apparent that the role envisaged by the legislature insofar as the Authority is concerned, is a ministerial role in the form of rendering assistance and exercising powers by virtue of the authority vested in the District Magistrate or the Chief Metropolitan Magistrate including use of force as may be necessary. The said Authority, namely, the Chief Metropolitan Magistrate or the District Magistrate is not vested with any adjudicatory powers. There is no other provision under the Securitisation Act in exercise of which the said Authority, who is approached by a secured creditor, can undertake adjudication of any dispute between the secured creditor and the debtor or the person whose property is the secured asset of which possession is to be taken. If such adjudicatory powers were to be vested in the Authority, the Securitisation Act would have made a specific provision in this regard." "15.3. ***** under the guise of acting under Section 14 of the Securitisation Act the Authority cannot be permitted to usurp statutory powers vested in the Tribunal. * * * 15.5. Hence, the Authority who is called upon to act under Section 14 of the Securitisation A....
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.... constitutionality of various provisions of the SARFAESI Act were under challenge till the decision in V. Noble Kumar (supra), the law has clearly been laid down that the enactment in question envisages enforcement of security interest created in favour of a secured creditor without the intervention of courts and tribunals and an adjudicatory process qua the points raised by the borrower against the secured creditor taking possession of the secured asset could commence only after possession were taken by the latter. Section 14 essentially being a method for taking possession, no adjudication of rival claims could be involved at that stage. The parties have not disputed this position. 51. However, has the situation changed with the introduction of the amendments in section 14 or because of Harshad Govardhan Sondagar (supra)? It would be my endeavour to find an answer by analysing section 14 at the outset. 52. If one reads the marginal note of section 14 first, it would appear that the same is relatable to assistance to be rendered by the CMM/DM to a secured creditor in taking possession of a secured asset. The marginal note as in the original text of section 14 exists even aft....
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....lic functionary to himself perform all the duties he is privileged to perform and, therefore, has to take the aid of agents and delegates. Introduction of sub-section (1-A) allows the CMM/DM to delegate the field work of taking possession in execution of the order passed under sub-section (1) of section 14 to a subordinate officer, presumably to relieve the CMM/DM of the heavy pressure of judicial work/administrative work thereby leading to likely inconvenience in faithfully carrying out the specified duty. Judicial interference in respect of pre-amended section 14 orders passed by the CMM/DM authorising the authorised officers of secured creditors to take possession of the secured assets with the assistance of the local police, instead of the CMM/DM himself taking possession in terms of the statutory mandate, is not uncommon. The last proviso to sub-section (1) is conceived to save applications already filed before the CMM/DM before the introduction of the amendments from failing for want of an affidavit, although the language employed therein bears clear reflection of the draftsman being inattentive. Sub-section (2) has been left untouched. Lastly, an amendment in sub-section (3)....
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....set. In view thereof, section 14 cannot stand independent of sub-section 13(4). If a borrower has no right of hearing when the secured creditor takes possession under section 13(4), a fortiori, no hearing can be demanded by a borrower when he succeeds in resisting possession being gained over by the authorised officer of the secured creditor or does not on his own surrender possession, and thus compels him to work out his remedy by seeking an order under section 14 from the CMM/DM. Only a post- possession right to approach the tribunal is conferred on a borrower in terms of section 17, nothing more and nothing less. 55. One cannot lose sight of the fact that constitutionality of section 14 in its original form had been upheld in Mansa Synthetics Pvt. Ltd. (supra). The legislature, however, felt the need to amend section 14, may be for reasons indicated by me in paragraph 53 supra. If it were the intention of the legislature to extend opportunity of hearing to a borrower before the CMM/DM, it was free to do so. Advisedly, the legislature did not do so, for, it would have militated against the scheme of the SARFAESI Act and more particularly section 13 thereof. It is implicit in t....
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....arginal note can serve as a guidance where there is ambiguity or doubt about the true meaning of the provision. 60. The Supreme Court in the decision reported in AIR 1975 SC 1967 (Indian Aluminium Company v. Kerala State Electricity Board) noted: "18. ***** It is true that the marginal note cannot afford any legitimate aid to a construction of a section, but it can certainly be relied upon as indicating the drift of the section, or, to use the words of Collins M. R. in Bushell v. Hammond, (1904) 2 KB 563 'to show what the section was dealing with'." 61. Yet again, Hon'ble E.S. Venkataramaih, J. (as His Lordship then was) in the decision reported in 1981 Supp SCC 87 (S.P. Gupta v. Union of India) observed as follows: "1111. A reading of the passages and decisions referred to above leads to the view that the Court while construing a statute has to read both the marginal notes and the body of its provisions. Whether the marginal notes would be useful to interpret the provisions and if so to what extent depends upon the circumstances of each case. No settled principles applicable to all cases can be laid down in this fluctuating state of the law as t....
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.... Ltd. v. P.N. Sharma), the principal point of law which arose in the civil appeal by special leave was whether the State of Punjab, respondent no. 2, exercising its appellate jurisdiction under Rule 6(6) of the Punjab Welfare Officers Recruitment and Conditions of Service Rules, 1952 was a tribunal within the meaning of Article 136 (1) of the Constitution. It was held as follows: "8. In every State there are administrative bodies or authorities which are required to deal with matters within their jurisdiction in an administrative manner and their decisions are described as administrative decisions. In reaching their administrative decisions, administrative bodies can and often do take into consideration questions of policy. It is not unlikely that even in this process of reaching administrative decisions, the administrative bodies of authorities are required to act fairly and objectively and would in many cases have to follow the principles of natural justice; but the authority to reach decisions conferred on such administrative bodies is clearly distinct and separate from the judicial power conferred on Courts, and the decisions pronounced by administrative bodies are sim....
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....ircumstances and imposing liability or affecting the rights of others." 15. In Huddart Parker and Co. v. Moorehead (1909) 8 CLR 330 (E) judicial powers were defined as under :- "The words 'judicial power' as used in section 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects or between itself and its subjects whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action." In Rex v. London County Council (1931) 2 KB 215 (F) judicial authority was defined as under :- "It is not necessary that it should be a Court in the sense in which this Court is a court; it is enough if it is exercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition and it is not necessary to be strictly a Court." In Royal Aquarium and Summer and Winter Garden Society Ltd. v. Parkinson (1892 (1) QB 431) dealing with the meaning of the wo....
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.... power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action. The authority to determine the rights of persons or property by arbitrating between adversaries in specific controversies at the instance of a party thereto; the authority vested in some Court, officer, or person to hear and determine when the rights of persons or property or the propriety of doing an act is the subject-matter of adjudication. (Grider v. Tally 54, Am Rep 65). A judge exercises 'judicial powers' not only when he is deciding suits between parties, but also when he exercises disciplinary powers which are properly appurtenant to the office of a judge. (A.G. of Gambia v. N' Jie, 1961 AC 617)." 71. My understanding of the law is that the judicial power of the State for administration of justice to its subjects can exclusively be vested in courts or tribunals, which necessarily have to decide disputes between parties that are brought before it according to accepted norms of judicial procedure. That a true judicial decision presupposes an existing dispute between two or more parties, an....
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....sion of the secured asset during the period of a lease ? (paragraph 15). (ii) whether the provisions of the SARFAESI Act have the effect of terminating these valid leases made by the borrower or the mortgagor made in accordance with the provisions of the Transfer of Property Act? (paragraph 18). (iii) what is the nature of the right of the lessee and as to when the lease under the Transfer of Property Act gets determined? (paragraph 22). (iv) whether section 14 of the SARFAESI Act confers any power on the CMM/DM to assist the secured creditor in taking possession of the secured asset which is in lawful possession of the lessee under a valid lease? (paragraph 23). (v) what are the remedies available to the lessee where he is threatened to be dispossessed by any action taken by the secured creditor under Section 13 of the SARFAESI Act? (paragraph 27). (vi) whether a lessee has any remedy by way of an appeal under Section 17 of the SARFAESI Act when the secured creditor attempts to take over possession of the secured asset which is in possession of the lessee? (paragraph 30). (vii) whether the tenants have remedies under the tenanc....
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....t circulation in that locality, by the authorised officer. At this stage, the lessee of an immovable property will have notice of the secured creditor making efforts to take possession of the secured assets of the borrower. When, therefore, a lessee becomes aware of the possession being taken by the secured creditor, in respect of the secured asset in respect of which he is the lessee, from the possession notice which is delivered, affixed or published in sub-rule (1) and sub-rule (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002, he may either surrender possession or resist the attempt of the secured creditor to take the possession of the secured asset by producing before the authorised officer proof that he was inducted as a lessee prior to the creation of the mortgage or that he was a lessee under the mortgagor in accordance with the provisions of Section 65-A of the Transfer of Property Act and that the lease does not stand determined in accordance with Section 111 of the Transfer of Property Act. If the lessee surrenders possession, the lease, even if valid, gets determined in accordance with clause (f) of Section 111 of the Transfer of Property Act, but if h....
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.... this Court to exercise jurisdiction vested by the Constitution because a statutory provision cannot take away a power vested by the Constitution. ...... In our view, therefore, the decision of the Chief Metropolitan Magistrate or the District Magistrate can be challenged before the High Court under Articles 226 and 227 of the Constitution by any aggrieved party and if such a challenge is made, the High Court can examine the decision of the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, in accordance with the settled principles of law." 78. Insofar as question (vi) is concerned, the Court held that: "32. When we read sub-section (1) of Section 17 of the SARFAESI Act, we find that under the said sub-section '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 the chapter, may apply to the Debts Recovery Tribunal having jurisdiction in the matter within 45 days from the date on which such measures had been taken. We agree with Mr Vikas Singh that the words 'any person' are wide enough to include a less....
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....ts, may now be noticed. Paragraph 51 thereof reads as follows : "51. However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages.***" 81. One must remember that Harshad Govardhan Sondagar (supra) found that there is no remedy available under section 17 of the SARFAESI Act to the lessee to protect his lawful possession under a valid lease. The remedy available under section 17 of the SARFAESI Act, thus, has to be regarded illusory for pre- mortgage lessees for the reason that even though sufficient ground may have been made out for the tribunal to direct restoration of possession of the secured asset, such restoration could only be in favour of the borrower and not anyone else. 82. If the grievance that such a pre-mortgage lessee brings before the tribunal under section 17 is not capable of being determined by it, is the remedy by way of a suit ba....
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....ardhan Sondagar (supra) turns on its facts and has no application when the person aggrieved is someone who is either not a pre-mortgage lessee or a lessee to whom section 65-A of the TP Act applies. 86. Here, I am not concerned with any claim raised by a lessee who is in possession of a secured asset in pursuance of a lease of the nature that fell for consideration in Harshad Govardhan Sondagar (supra). The law laid down therein while dealing with the case of a lessee can hardly apply in case of a borrower in possession of the mortgaged property or a tenant/purchaser of a mortgaged property after creation of mortgage. Most importantly, I have not found any declaration of law in such decision that in every case while the CMM/DM is in seisin of a section 14 application, the borrower or the person in possession of a secured asset has to be put on notice. 87. Concurring with the relevant observations in Kamal Jajoo (supra) and K. Arockiyaraj (supra), the first question formulated above in paragraph 43 supra, accordingly, is answered in the negative. 88. Turning attention to the second question, one needs to read sub-section (3) of section 14 of the SARFAESI Act carefully. It s....
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....r Section 13(4). Alienating the asset either by lease or sale, etc. and appointing a person to manage the secured asset are some of those possible measures. On the other hand, Section 14 authorises the Magistrate only to take possession of the property and forward the asset along with the connected documents to the borrower (sic the secured creditor). Therefore, the borrower is always entitled to prefer an 'appeal' under Section 17 after the possession of the secured asset is handed over to the secured creditor. Section 13(4)(a) declares that the secured creditor may take possession of the secured assets. It does not specify whether such a possession is to be obtained directly by the secured creditor or by resorting to the procedure under Section 14. We are of the opinion that by whatever manner the secured creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 17 is available." 92. Kanaiyalal Lalchand Sachdev (supra) and V. Noble Kumar (supra) are authorities for the proposition that an order under s....
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.... the steps/force taken/used by the officer authorised by the CMM/DM be challenged before any ordinary court/tribunal? I am of the considered opinion that sub-section (3) of section 14 should be read as intending to provide protection to persons acting in good faith to give effect to an order passed under sub-section (1) without their (reasonable) action being amenable to challenge before any court/tribunal, except the Supreme Court/High Court, and can never be read as foreclosing a challenge to such order, on merits, before the specified forum under section 17. 94. The decisions in IDBI Bank Limited (supra) and in Mansa Synthetics Pvt. Ltd., proceeding to lay down the law that an order under section 14(1) of the SARFAESI Act is not amenable to a challenge under section 17 thereof by a borrower, are contrary to what have been laid down in Kanaiyalal Lalchand Sachdev (supra) and V. Noble Kumar (supra) and I respectfully differ with the said decisions of the Gujarat High Court. 95. The second question in pargraph 43 is, accordingly, answered by holding that an order under sub-section (1) of section 14 granting assistance to the secured creditor can be challenged before the relev....
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....to take or cause to be taken such steps and use or cause to be used such force as may, in his opinion, be necessary, sub-section (4) of section 13 or any other sub- section thereof does not authorise a secured creditor to barge into the secured asset for taking its possession by force. I am reminded of the maxim expressio unius est exclusio alterius, meaning whatever has not been included has by implication been excluded. From this is derived the subsidiary rule that an expressly laid down mode of doing something necessarily prohibits doing of that thing in any other manner. If any authority is required, one may readily refer to the decision reported in 1975 Supp SCC 1 (Indira Nehru Gandhi v. Raj Narain). It is thus plain and clear that a secured creditor is not authorised to exert force while taking possession and that is left only to the CMM/DM, as the case may be, in the sound exercise of his discretion under sub-section (2) of section 14. Sundaram BNP Paribas Home Finance Ltd. (supra) expresses the same view. If on a request made by the authorised officer to vacate the secured asset the borrower or any person in occupation thereof does not voluntarily surrender possession, the ....
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.... District Magistrate, 24 Parganas (South) impugned in the former writ petition. It is the further claim of Amar that after such purchase, his name has been mutated in the records of the Kolkata Municipal Corporation and that he has also been paying property tax in respect of such flat. It has also been claimed in paragraph 7 of the latter writ petition that while Amar was away from the flat on May 18, 2015, the secured creditor removed the padlock put by Amar on the main door and replaced the same by another padlock and since then Amar has been forced to stay away from his flat. 108. Having contacted Jawahar, he advanced excuses regarding the loan taken by him from the bank and Amar was shocked and traumatised because he had invested all his savings for purchase of the flat. Claiming himself to be a bona fide purchaser of the flat for valuable consideration and contending that he was not a party to the transaction between his vendor and the United Bank of India, and that the order passed by the district magistrate on the application under section 14 of the SARFAESI Act is not binding on him, a prayer has been made by Amar for restoration of possession. 109. It is clear from t....
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....a property which was mortgaged by his vendor before the subject sale transaction. It may be so that the vendor suppressed the fact of creation of mortgage but any purported defect in the order of the district magistrate cannot lead to an order setting it aside on consideration of the latter writ petition. Surprisingly, although the order dated January 22, 2015 is part of the annexures to the latter writ petition, no challenge thereto has been levelled by Amar. As and when the bank availing the liberty granted by the Hon'ble Division Bench issues fresh sale notice, Amar shall be at liberty to pursue his remedy in accordance with law. 113. W.P. No. 12210(W) of 2015 stands disposed of, without order for costs. W.P. 11993(W) of 2015 114. The order passed by the District Magistrate, 24 Parganas (North) dated March 20, 2015, on an application filed by the authorised officer of State Bank of India, Nimpith Branch under section 14 of the SARFAESI Act is under challenge in this writ petition dated June 2, 2015, presented on June 10 2015. Referring to the affidavit that was filed by the authorised officer and recording his satisfaction in regard to its contents, the district mag....
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....nk and has been taken on record. It is revealed therefrom that the bank was permitted to take physical possession of the secured asset i.e. a flat in the building "Shyam Kunj" at 12/C, Lord Sinha Road, P.S. Shakespeare Sarani, Kolkata with police help, if necessary. 122. The point that has been raised on behalf of the petitioner is that there was no affidavit before the Chief Metropolitan Magistrate, Calcutta filed in terms of the first proviso to section 14. The other point is that the demand notice issued under section 13(2) of the Act had been waived by the bank. 123. Mr. Mantha contended that an affidavit had been filed in terms of the statutory mandate. I need not examine the point, since it is not in dispute that the impugned order has been implemented by taking possession of the secured asset on May 20, 2015. In my view, since possession has already been taken in pursuance of the impugned order, remedy of the petitioner lies in questioning such order before the tribunal under section 17 in terms of the observations made above. W.P. 11787 (W) of 2015 is not entertained and it stands disposed of, without order for costs. 124. Since possession has been taken over on Ma....
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....andopadhyay Sarani, P.S. Regent Park. By a letter dated October 22, 2014, the district magistrate spurned the application on the ground that notice under section 13(2) was not properly served on the borrower. 129. The respondents 6 and 7 (private respondents) have not entered appearance to oppose the writ petition despite dispatch of copies thereof to them by speed post on May 5, 2015. 130. Mr. Bhattacharya referred to page 28 of the writ petition, being a letter dated March 25, 2008 written by a learned advocate engaged by the respondent no. 6 and contended that such letter clearly indicates receipt of notice under section 13(2) of the SARFAESI Act by the respondent no. 6. Based thereon, he contended that the district magistrate erred in law in refusing to grant assistance under section 14 on the ground of non-service of notice under section 13(2) of the Act on the borrower. 131. In course of hearing, the relevant file leading to the order impugned dated October 22, 2014 was called for. It appears from such file that the district magistrate was approached with an application dated December 26, 2012 under section 14 by the petitioner. Since the application was filed before....