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2018 Supreme(Kar) 6
IN THE HIGH COURT OF KARNATAKA
K.N. PHANEENDRA, J.
K.S. Narayanaswamy – Petitioner
Versus
Corporation Bank, Bengaluru & Another – Respondents
Criminal Petition No. 6466 of 2017
Decided On : 18-01-2018
For the Petitioner:Kiran S. Javali, Advocate.
For the Respondent:V.B. Ravishankar, Sandesh J. Chouta, Spp-II, B.N. Shivanna, Advocates.
Headnote:SECURITIES & RECONSTRUCTION OF FINANCIAL ASSETS & ENFORCEMENT OF SECURITY INTEREST ACT, 2002 [C.A. No. 54/ 2002] - Section 14 - Writ Petition - Alternative remedy - W.P. against order of Magistrate directing Bank to take possession of the mortgaged property with police help - Petitioner had approached DRT - Held, Section 17 of the Act gives an ample right and opportunity to the aggrieved person on the order passed by the Chief Metropolitan Magistrate or the District Magistrate on the basis of the right exercised by the secured creditor under Section 13(4) of the Act has got an alternative efficacious remedy. Therefore, on merits of the case, the debtor or borrower has no right to question the order of the Chief Metropolitan Magistrate unless the order itself is patently illegal or the procedure followed by the Chief Metropolitan Magistrate is so perverse or prejudicial to the borrower. Though the alternative efficacious remedy is available, it does not absolutely take away the powers of the High Court in dealing with the order passed by the Chief Metropolitan Magistrate under Section 14 of the Act.
When once the Writ Court has come to the conclusion that the said order as legal, if this Court come to a different conclusion, it virtually amounts to nullifying the order of this Court in the above said writ proceedings. If an opportunity is given to the petitioner as contemplated under the Act and Rules to repay the debt and if he does not pay the amount, then Sections 13(4) and 14 of the Act creates a statutory right in favour of the secured creditor to exercise its remedy to take possession of the property. In the absence of any illegality or irregularity committed by the learned Magistrate and further as the orders of the learned Magistrate has already held to be legal by this Court, in Vijaya Bank vs M/s Shameen Transport, [ILR 2006 4663: 2007 (1) KCCR SN 14], it is very difficult for this Court to quash such proceedings.
1. This Criminal Petition is filed for quashing of the Order dated 18.7.2017 on the file of the 44th ACMM Court, Bengaluru, in Crl.Misc. No.4037/2017.
2. Vide impugned order, the learned Magistrate on the application of the respondent - Bank, has passed an order u/s.14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to 'SARFAESI Act' for short), directing the respondent - Bank herein to take possession of the application, schedule property towards the satisfaction of the creditors due and also further ordered directing the jurisdictional Police to give necessary assistance to the respondent-Bank in taking possession of the petition schedule property and the Bank was directed to bear the expenses if any incurred in this behalf.
3. I have heard the arguments of Sri Javali, learned counsel appearing for the petitioner and Sri V.B. Ravishankar, learned counsel appearing for respondent No.1 and Sri Sandesh J. Chouta, learned SPP-II for respondent No.2; and carefully perused the records.
4. On perusal of the petition averments and the objection statement filed by the first respondent, the admitted facts are as follows:
The petitioner and his wife have taken financial assistance from the first respondent - Bank to the tune of Rs.15 crores (Fifteen Crores) and in fact they have mortgaged the property in dispute along with all other necessary documents by way of deposit of title deeds. There are three items of property mortgaged and the bank enforcing its right for recovery of outstanding liability by the petitioner and his wife to the tune of Rs.15,51,14,193/-, has initiated proceedings before the competent authorities and further initiated proceedings for the purpose of taking possession of the property. It is also not in dispute that the petitioner had been running a company by name M/s.Geo Biotechnologies India Pvt. Ltd., has taken such an amount for the purpose of improving the business of the said Company.
5. It is argued by the petitioner's counsel that the first respondent under the SARFAESI Act issued notice on 12.12.2014 u/s.13(2) read with Section 13(3) of the Act calling upon the petitioner to pay the entire outstanding liability under the loan account within 60 days from the date of receipt of the said notice. Another notice was also issued on 10.3.2015 u/s.13(4) of the SARFAESI Act and the same was served on the petitioner which is also published under two vernacular daily newspapers.
6. It is argued by the respondent's counsel that after lapse of time granted to the petitioner, in order to take the actual possession of the property, the first respondent moved the Court of Chief Metropolitan Magistrate u/s.14 of the Act in Crl.Misc. No.4037/2017 and the learned Judge has passed an order dated 18.7.2017 and being aggrieved by the same, the present petition is filed.
7. It is also not in dispute that, besides filing a suit for partition, the son of the petitioner by name Sri K.N.Surag has also filed Writ Petition Nos.14919 & 15263-15267/2015(GM-DRT), which came to be disposed of. The respondent - Corporation Bank, being aggrieved by the order passed in the said Writ Petitions, has filed Writ Appeal before this court in WA Nos.1034/2016 and WA Nos.3456-3460/2016, wherein the Division Bench of this Court relegated the petitioner therein to the Debt Recovery Tribunal for raising objection u/s.17of the SARFAESI Act. Later, being aggrieved by the order of the 44th ACMM in Crl.Misc.No.4037/2017, the son of the petitioner Sri K.N. Surag has also filed Writ Petition Nos.34604/2017 & 34651-652/2017. After hearing all the parties, the Writ Petition was disposed of by dismissing the said Writ Petition by a detailed order holding that there is no illegality in the order passed by the learned 44th ACMM, Bengaluru, u/s.14 of the said Act. However, the court has given opportunity to the petitioner therein or the petitioner herein who are the borrowers to
