TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 651
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....he property till her life time. Property, has been bequeathed to his daughter in law, P.K.Puniavathy and Ajith Kumar, grand son. 3. M/s.Dynagro Trading Inc., Coimbatore, has borrowed loan from Vijaya Bank, Coimbatore under the following head Nature of facility Amount Interest & Charges Terms of Repayment l. PCL (H) Interchangability 2. FDBP/FUDBP 200.00 150.00 ROI at Base Rate +1.50 p.a (Floating) i.e., presently at 11.70%p.a Facility is for one year from the date of sanction subject to annual review Total 350.00 Processing charges and other charges as per HOC 12075 and HOC 12108 Purpose of the loan : CCH Limit : To meet the working capital requirement of the firm 4. Sandeep Nagarajan and S.Ajith Kumar are the partners of M/s.Dynagro Trading Inc., Coimbatore. K.P.Punithavathi, is one of the security providers and mother of the 2nd partner / grandson of the testator. Mrs.K.N.Meekashikutty, is another security provider / grand mother of Mr.S.Ajith Kumar. Primary and collateral securities offered for availing the abovesaid loans, are as hereunder. Securities As mentioned below: a. PRIMARY SECURITIES Nature of security Description Margin prop....
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....unt No.300408411000170 w.e.f.21.06.2015, at the contractual rates, together with costs, charges, other monies until payment or realisation. 6. In the notice issued under Section 13(2) of the Act, bank has also given the description of the property mortgaged. Thereafter, possession notice dated 19.09.2015, has been issued under Section 13(4) of the SARFAESI Act 2002. 7. Seeking assistance for taking possession Vijaya Bank, Coimbatore has filed an application under Section 14 of the SARFAESI Act, 2002 before the District Collector cum District Magistrate, Coimbatore. Bank has also issued notice dated 07.03.2017, to bring the property for auction. Statutory 15 days sale notice for bringing the immovable property for auction, has also been issued to Mr.S.Ajith Kumar, Mrs.K.P.Punithavathi and Mrs.K.N.Meenakshikutty, the writ petitioner herein, with copies marked to M/s.Dynagro Trading Inc., Coimbatore and Mr.Sandeep Nagarajan, Parnter. 8. Contending inter alia that no orders under Section 14 of the SARFAESI Act, 2002, has been passed by the District Collector cum District Magistrate, Coimbatore, Vijaya Bank, Coimbatore has filed W.P.No.11617 of 2017, for a mandamus directing the Dist....
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....he death of a kinsman, or any other mere possibility of a like nature, cannot be transferred; (b) ... (c) .... (d) All interest in property restricted in its enjoyment to the owner personally cannot be transferred by him; 13. Referring to the definition 2(zc) and 2(ze) of the SARFAESI Act, 2002 learned counsel for the petitioner further submitted that to create a security, there should be a transfer of property and in the case on hand, the writ petitioner entitled only to enjoy the property till life her time and thereafter, the beneficiaries, after the demise of the writ petitioner. According to him, in the absence of any transfer of property, the same would not fall under the definition of security asset for the loan availed and that therefore, bank cannot proceed under the provisions of the SARFAESI Act, 2002 and consequently, the District Collector-cum-District Magistrate, Coimbatore, has no jurisdiction to pass orders under Section 14 of the said Act. 14. Inviting the attention of this Court to the memorandum of deposit of titles dated 14.11.2013, learned counsel for the petitioner further submitted that the bank was aware of the limitations of the documents produc....
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....hereunder relating to the property/ies of the Executants described in the Schedule 'A' herewith attached with intent to create an equitable mortgage by way of deposit of title deeds to secure the debts owing to Vijaya Bank by M/s.Dynagro Trading Inc. having its registered office at Door No.121, Zion Complex, Avinashi Road, Hope College, Peelamedu Post, Coimbatore - 641 004 now and / or at any time hereinafter owning to Vijaya Bank by M/s.Dynagro Trading Inc. having its registered office at Door No.121, Zion Complex, Avinashi Road, Hope College, Peelamedu Post, Coimbatore - 641 004 whether singly or jointly with other person/s as principal borrower/s, gurantor/s or in any other capacity whatsoever to the extent of Rs. 3,50,00,000/- (Rupees Three crore and fifty lakhs only) by way of PCL / FDBP / FUDBP and interest, commissions and Banking and other incidental charges and costs incurred in connection with the realization. SCHEDULE - A 11 LIST OF DOCUMENTS DEPOSITED Sl. No. Document No. & Date Name of office of Registrar where registered Description of Documents Name of the Executants Executed by whom and in whose favour or issued by which office Name of benefici....
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.... this Memorandum Relating to Deposit of Title Deeds on this the 14th day of November, 2013" 20. Thereafter, bank has issued possession and sale notice as stated supra. When application dated 29.06.2016 under Section 14 of the SARFAESI Act, 2002, was pending on the file of the District Collector-cum-District Magistrate, Coimbatore,, W.P.No.11617 of 2017 has been filed by Vijaya Bank, for a mandamus directing the District Collector-cum-District Magistrate, Coimbatore, to pass orders. Vide order dated 04.05.2017 in W.P.No.11617 of 2017, a Hon'ble Division Bench of this Court has directed District Collector-cum-District Magistrate, Coimbatore, to pass orders, after giving notice and hearing all parties concerned. Thereafter, enquiry notice dated 21.10.2017 has been issued to the writ petitioner. District Collectorcum- District Magistrate, Coimbatore, has also issued a notice to the authorized officer, Vijaya bank, Coimbatore and VAO, Puliakkulam, Coimbatore West, Coimbatore District. 21. Section 14 of the SARFAESI Act, 2002 mandates that on receipt of an affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall ....
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.... writ petitioner that unless and until there is transfer of property, in terms of Section 6 of the Transfer of Property Act, 1882, property cannot be mortgaged with the Vijaya Bank and therefore that would not create any security interest warranting Vijaya Bank, Coimbatore District to invoke Section 14 of the SARFAESI Act, 2002 for assistance and consequently, the District Collector-cum-District Magistrate, Coimbatore, has no jurisdiction or authority to pass orders and that therefore, there is no other alternative and effective remedy, except to approach this Court under Article 226 of the Constitution of India, cannot be accepted. 26. Under the scheme of Act, District Collector cum District Magistrate or the Chief Metropolitan Magistrate, as the case may be, is empowered to pass orders, after considering the parameters, set out in the said section. Statutory authority cannot be restrained from discharging his duties and functions by issuance of a writ of prohibition. Reference can be made to few decisions. (i) In Smt.Ujjam Bai v. State of Uttar Pradesh reported in 1963 (1) SCR 778, it is held as follows: ".... A writ of prohibition is normally issued only when the inferior ....
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....risdiction and the manner in which it is exercised. If there is want of jurisdiction then the matter is coram non Judice and a writ of prohibition will lie to the court or inferior tribunal forbidding it to continue, proceedings therein in excess of its jurisdiction." (iii) In Isha Beevi v. Tax Recovery Officer reported in 1976 (1) SCC 70, the Hon'ble Supreme Court, the petitioners therein have sought for a writ of Prohibition. At Paragraph 5, observed as follows: "....The existence of an alternative remedy is not generally a bar to the issuance of such a writ or order. But, in order to substantiate a right to obtain a Writ of Prohibition from a High Court or from this Court, an applicant has to demonstrate total absence of jurisdiction to proceed on the part of the officer or authority complained against. It is not enough if a wrong Section or provision of law is cited in a notice or order if the power to proceed is actually there under another provision." (iv) In Union of India v. Upendra Singh reported in 1994 (3) SCC 357 the Hon'ble Apex Court held that "4. ......A writ of prohibition is issued only when patent lack of jurisdiction is made out. It is true th....
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....ince the basis of the claim for the relief is found not to exist, the High Court rightly refused the prayer for the issue of a writ of prohibition restraining the Authorities from continuing the proceedings pursuant to the notices issued. As indicated by this Court in State of Uttar Pradesh Vs. Brahm Datt Sharma [(1987) 2 SCC 179] when a show cause notice is issued under statutory provision calling upon the person concerned to show cause, ordinarily that person must place his case before the Authority concerned by showing cause and the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. On the facts of this case, it cannot be said that these notices are palpably without authority of law. In that situation, the appellants cannot successfully challenge the refusal by the High Court of the writs of prohibition prayed for by them." 27. In the case on hand, statute empowers the District Magistrate cum District Collector, to pass orders on the application filed under Section 14 of the SARFAESI Act, 2002. He cannot be said to have acted without jurisdiction. Action of the District Mag....