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TaxTMI 
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2021 (12) TMI 1508
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....pondent no.3 against the respondents no.1 and 2. 2. Notice was issued in the said petition on 23rd September, 2021. Reply has been filed on behalf of the respondents no.1 and 2 and on behalf of the respondent no.3. Oral submissions were made by the counsel for the petitioner and the counsel for the respondents no.1 and 2 on 10th, 11th and 16th November, 2021. However, no oral submissions have been made on behalf of the counsel for the respondent no.3. Judgment was reserved on 16th November, 2021 and all the parties have filed written submissions. 3. Before dealing with the contentions of the parties, it is deemed apposite to give a brief résumé of facts preceding the filing of the present petition. 3.1 A loan of Rs. 1,23,86,908/- was disbursed by the petitioner to the respondents no.1 and 2 for purchase of Flat No.302, 3rd Floor, Block- B, Udyog Vihar CGHS Ltd., Plot No.12, Sector-22, Dwarka, New Delhi-110075 (subject property). 3.2 On 31st July, 2021, the said loan account was classified as Non Performing Asset (NPA) and a demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ....
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....o maintain status quo qua the suit property. The said order was extended from time to time. 3.13 In light of the said order, the court appointed receiver did not take possession of the property. 3.14 The petitioner filed an application before the CMM seeking, inter alia change of court appointed receiver and extension of time for compliance of the order passed by the CMM under Section 14 of the SARFAESI Act. 3.15 Vide the impugned order dated 17th August, 2021, the CMM observed that once a status quo order has been passed by the Court of ADJ-01, South West, Dwarka Courts, New Delhi in respect of the subject property, it would be against judicial discipline to pass any further order in the proceedings before the CMM. 4. Aggrieved by the aforesaid order, the present petition under Article 227 of the Constitution of India has been filed by the petitioner. 5. The grievance of the petitioner in respect of the impugned order dated 30th March, 2021 is that ninety days' further time has been granted to the court receiver for execution of the order dated 15th October, 2019. It is contended on behalf of the petitioner that there is no jurisdiction vested in the CMM to fix a time limit f....
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....espondents no.1 and 2, which is pending before the DRT. It is further contended that no equity can be claimed by the respondents no.1 and 2 as they have created third party interest in respect of the subject property and also left the country. 8. As regards the reply filed on behalf of the respondent no.3, it is contended on behalf of the petitioner that once again, no submissions have been made with regard to the legal questions raised in the present petition. In the reply filed by the respondent no.3, respondent no.3 claims to be in possession of the subject property on the basis of an Agreement to Sell dated 01st November, 2019 and it is stated therein that the respondent no.3 is also willing to settle with the petitioner in respect of the subject property. 9. Counsel appearing on behalf of the respondents no.1 and 2 did not address any arguments on the legal issues raised in the present petition. The only submissions made by the counsel for the respondents no.1 and 2 were that (i) the petitioner committed a fraud on the respondents by claiming amounts more than what were due in terms of the home loan agreement dated 05th August, 2011; (ii) the said respondents have always bee....
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....ed the rival contentions. 12. Following issues arise for consideration in the present petition: I. Whether there is any requirement or justification to fix a time limit by the CMM for taking possession of the secured asset while exercising jurisdiction under Section 14 of the SARFAESI Act? II. In the context of proceedings initiated under the SARFAESI Act, whether an order passed in a civil suit instituted by a third party in respect of the mortgaged property/secured asset would bind the secured creditor, if the said secured creditor was not a party to the Civil Suit? 13. Both the questions raised in the present petition are purely legal. I proceed to give my findings on both the aforesaid issues. I. Whether there is any requirement or justification to fix a time limit by the CMM for taking possession of the secured asset while exercising jurisdiction under Section 14 of the SARFAESI Act? 14. Section 14 of the SARFAESI Act is an enabling provision through which the secured creditor may seek the assistance of the CMM in taking physical possession of the secured asset, which is within the jurisdiction of the CMM. There is no provision under Section 14 that requires imposi....
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....e order directing the taking over of physical possession would be set at naught. 11. In order to secure the asset of the Bank, it is in the interest of justice that the physical possession of the concerned properties, ought to be taken so as to ensure that the asset is not frittered away by the debtor." (emphasis supplied) 17. The aforesaid judgment in Jammu and Kashmir Bank (supra) was followed by me in Sansar Chand Sharma Vs. Kotak Mahindra Bank Ltd., through Chief Manager Sh. G.S. Pander, 2021 SCC OnLine Del 4911, wherein it was held that there are no provisions of law in terms of which the CMM could not extend the time period granted for taking physical possession of the secured asset and technicalities cannot come to the aid of the borrower to frustrate the object behind the SARFAESI Act. 18. Keeping in mind the objective of the SARFAESI Act i.e., to enable the secured borrowers to take physical possession of the assets of the defaulting borrowers in an expeditious manner, there is no requirement or justification for the CMM to impose time limits for the receiver to take physical possession of the secured asset. This would also curtail unnecessary litigation wherein app....
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....led by a plaintiff / tenant and the relief so claimed is also restricted therein to the defendant / landlord and not against the bank. Not only this, the interim order dated 13.07.2018 itself clarifies that the said injunction would not be applicable to third parties which are not impleaded in the said civil suit. The relevant portion of the order dated 13.07.2018 is extracted as under:- "8. Before parting with this order, it is hereby made clear that due compliance of Order 39 Rule 3 CPC be made forthwith and copy of this order also given for effecting service upon the defendant on filing of PF, RC and copies of documents immediately, jailing which, this order shall cease to have its effect. It is further made clear that nothing contained herein shall be construed so as to effect the rights of other parties, who are not formally arrayed as a party in the present suit." [Emphasis supplied] It is thus more than clear, that the Civil Court in its order has clearly restricted the applicability of the interim protection only to the parties to the said suit. Since the bank is not a party to the said suit as yet and there is no specific restraint order against the bank, the said o....
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....ly binding as against the parties to the suit. In such a case, the order of the Subordinate Judge to grant police protection against the appellant Housing Board which is enjoying the property is erroneous in law and is liable to be set aside." (emphasis supplied) 24. In the present case, no submissions have been made by the respondents on this legal proposition. In fact, the respondents no.1 and 2 have stated in their reply that they did not execute any agreement to sell in favour of the respondent no.3 and therefore, the suit filed by the respondent no.3 is frivolous. 25. The order dated 12th July, 2021 was passed in a civil suit in a dispute between the respondents no.1 and 2 and the respondent no.3, in which the petitioner was not impleaded as a party. On the one hand, the respondent no.3 has stated in his reply that there was no occasion to implead the petitioner as the dispute was between the respondent no.3 and the respondents no.1 and 2, but in the same reply it has been stated that if the petitioner had any grievance with the order passed in the civil suit, it should have filed for impleadment in the aforesaid civil suit. These are clearly contradictory stands taken by....
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....t the petitioner. 30. The dicta in Allahabad Bank, Branch at Industrial Area A, Link Road, Ludhiana through its Chief Manager/Authorised Officer Sh. Nishant Shukla (supra) is squarely applicable in the present case. In view thereof, the impugned order dated 17th August, 2021 passed by the CMM is patently erroneous. 31. Respondents no.1 and 2 have also raised an issue with regard to the amount claimed by the petitioner. They have contended that an exaggerated amount has been claimed by the petitioner in its various notices issued to the respondents, which are clearly in violation of the home loan agreement. All the aforesaid contentions of the respondents no.1 and 2 as well as the contentions of the respondent no.3 with regard to the proceedings initiated by the petitioner for taking possession of the subject property have to be raised before the appropriate forum i.e., the DRT in this case. The aforesaid issues cannot be raised in the present petition filed by the petitioner. The respondents cannot expand the scope of the present petition by raising the aforesaid issues. An SA has already been preferred by the respondents no.1 and 2, being SA 231/2019, which is pending adjudicati....