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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
C. PRAVEEN KUMAR, TARLADA RAJASEKHAR RAO, JJ.
M/s Sri Chandramala Enterprises Pvt. – Petitioner
Versus
Punjab National Bank – Respondent
Writ Petition No. 15356 of 2022
Decided On : 18-08-2022
Constitution of India, 1949 – Articles 226 and 227 – Criminal Procedure Code, 1973 – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Section 14 – Learned Counsel appearing Respondents Bank sought time to file counter but no counter is filed submits – Petitioners are lessees to Schedule Property and third parties they have no locus-standi to file present Writ Petition – Held, Learned Counsel appearing Respondents Bank would submit that – Petitioners are lessees to Schedule Property and being third parties to lis, have no locus standi to file Writ Petition – Learned Counsel for Petitioners would submit Hon’ble Supreme Court in Harshad Govardhan Assets Reconstruction Company Limited while dealing with remedies available to lessee where he is threatened to be dispossessed by any action taken by secured creditor – Writ Petition is disposed of.
Based on the provided legal document, here are the key points:
ORDER :
1. The circumstances, which lead to filing of the present Writ Petition, are as under:
(ii) It is said that, Respondent No. 1 bank initiated proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, [‘SARFAESI Act’] against Respondent No. 2. Aggrieved by the same, one of the neighbours of the subject property preferred an Appeal before the Debt Recovery Tribunal, Visakhapatnam, vide S.A. No. 144 of 2015, alleging that a part of their property is also included in the SARFAESI proceedings. The Debt Recovery Tribunal appointed an Advocate Commissioner for the purpose of demarcating the subject property. However, the said S.A. No. 144 of 2015 and I.A. No. 811 of 2018, which was filed by the Appellant therein, for issuance of warrant, were dismissed for default on 19.06.2019. Thereafter, the Appellant filed a restoration application vide M.A. No. 87 of 2020 on 29.09.2020 for restoration of S.A. No. 144 of 2015.
(iii) It is said that, on an application filed under Section 14 of the SARFAESI Act, the Respondent No. 7 issued a warrant on 15.07.2015, in Crl. M.P. No. 19 of 2015, to the Advocate Commissioner, but the same was not executed.
(iv) It is said that, Respondent No. 1 Bank filed a Memo before Respondent No. 7 in Crl. M.P. No. 19 of 2015 stating that S.A. No. 144 of 2015 along with I.A. No. 811 of 2018 before the Debt Recovery Tribunal, Visakhapatnam, were dismissed for default on 19.06.2019. Acting upon the said memo and since a Commissioner was appointed in the year 2015 itself, Respondent No. 7 re-entrusted the warrant to Respondent No. 8 (Sri T. Nageswara Rao) on 23.03.2022. However, Respondent No. 1 Bank did not bring to the notice of Respondent No. 7 that a restoration petition filed in S.A. No. 144 of 2015 is pending consideration before the Debt Recovery Tribunal, Visakhapatnam.
(v) Pursuant to the Order, dated 23.03.2022, passed by Respondent No. 7, the Advocate Commissioner visited the premises of the Petitioners Company. As the premises was locked, he broke open the same without any permission from the Court. After coming to know about the said incident, the Petitioners filed an objection Petition, dated 04.05.2022, before Respondent No. 7, narrating all the facts along with supporting documents. Respondent No. 7 returned the said objection Petition, vide Order, dated 06.05.2022, on the ground that the same is not maintainable under Section 17 (4A) of SARFAESI Act. Even though a detailed explanation was submitted, the same was not accepted and returned on 09.05.2022. This action of the Respondents is sought to be questioned in this Writ Petition. The learned counsel relied upon the judgment of the Hon’ble Supreme court in Harshad Govardhan Sondagar vs. International Assets Reconstruction Company Limited, (2014) 6 SCC 1 in support of his plea.
2. Sri. Hanumantha Rao Bachina, learned Counsel appearing for the Respondents/Bank, sought time to file counter, but no counter is filed. However, he submits that, as the Petitioners are lessees to the Schedule Property and third parties to the lis, they have no locus-standi to file the present Writ Petition.
3. The point that arises for consideration is, whether the action of the authorities in trying to take possession of the property is permissible under law?
4. Section 14 of the SARFAESI Act deals with secured creditor taking possession of secured asset. It states that, where possession of any secured assets
Court dismissed contempt allegations, finding that execution of a property warrant was not unlawful, as it adhered to legal processes despite timing disputes.
Point of Law : Nature of powers to be exercised by learned Chief Metropolitan Magistrate/learned District Magistrate, High Court in impugned judgment and order has rightly observed and held that powe....
The power of a designated magistrate under the recovery statute to facilitate possession of secured assets is purely ministerial, not adjudicatory. It requires no prior notice to debtors, no pre-regi....
Under Section 14 of the SARFAESI Act, a court is not required to provide notice to a debtor or consider claims from third parties regarding secured assets during the possession proceedings.
The court affirmed that no notice is required to be issued to a debtor under Section 14 of the SARFAESI Act when taking possession of secured assets.
(1) Possession of secured asset – Powers exercisable by CMM/DM under Section 14 of SARFAESI Act are ministerial step – Section 14 of SARFAESI Act does not involve any adjudicatory process qua points ....
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