The recovery initiated by a financial creditor under the SARFAESI Act cannot be impeded by authorities taking recourse to Section 142A of the Customs Act, as Section 142A itself saves the provisions of the SARFAESI Act.

ORDER :

G. S. Kulkarni, J.

1. Rule, returnable forthwith. Mr. Mishra, learned Counsel waives service for respondent No.1. Respondent No.2 is served, however, he is not represented. By consent of the parties as appearing, heard finally.

2. By this petition filed under Article 226 of the Constitution, the petitioner has prayed for the following reliefs:

“a. That this Hon’ble Court may be pleased to quash and set aside the letter dated 02.11.2015 issued by Respondent No. 1 asking the Petitioner to not take any decision on the property available with the Petitioner as per Exhibit -A.

b. That this Hon’ble Court may be pleased to declare that the Petitioner’s right as a Financial Creditor is superior to the rights under the Customs Act, 1962 and therefore, the Petitioner may be pleased to complete the process of recovery of dues for the sum of Rs. 7.44 crores payable by the Respondent No. 02 under the provisions of the SARFAESI Act, 2002.

c. That the Hon’ble Court be pleased to direct the Respondent No. 1 to disclose the status of the investigation to the Petitioner for completing proceeding for sale of assets of Respondent No. 02 under the provisions of the SARFAESI Act 2002;

d. That the Hon’ble Court be pleased to direct the Respondent No. 01 to provide the details of the attachment of property, if any, of the Respondent No. 02.

e. This Hon’ble Court be pleased to restrain the Respondent No.01 to not attach the properties of Respondent No.2 bearing Residential Flats 1, 2, 3, 4, 5, 6, 7, 8 consisting of Three 2BHK and Five 1 BHK flats in the building known as Park View, Plot No.205, Village Murbi, Sector 19, Kharghar, Navi Mumbai and Residential Flat 112 in Om Rachana, Plot No.03, Sector 17, Vashi, Navi Mumbai, as the same has been mortgaged in favour of Petitioner by the Respondent No.02.”

3. The case of the petitioner is that the petitioner had extended financial facilities to respondent No.2. Respondent No.2 had executed a Memorandum of record of an equitable mortgage of the secured assets. Further, the entire sanctioned credit facilities were collaterally secured. Respondent No.2 however defaulted in making payment of the amounts as lent by the petitioner. On 19 August 2015 in the petitioner’s books, the account of respondent No.2 was declared as Non-Performing Asset (NPA). The petitioner in these circumstances intended to proceed to exercise its powers under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’) to recover the amounts. Accordingly, a notice was issued to respondent No.2 under the provisions of Section 13(2) of the SARFAESI Act. As despite issuance of such notice, respondent No.2 did not come forward to pay the amounts as defaulted and respondent No.2 continued to be a defaulter. The petitioner, thus initiated action by invoking Section 14 of the SARFAESI Act, so as to obtain appropriate orders from the District Magistrate, Raigad. However, before any order could be passed on such proceedings, the impugned letter dated 2 November 2015 came to be addressed to the petitioner, on behalf of the Directorate of Revenue Intelligence / respondent No.1 The contents of the said letter read thus:-

“F. No.DR1/MZU/B/INT-66/2015

Dated: 02.11.2015.

The Manager,

Bank of Maharashtra,

Nerul Township Branch, Sahayof Aptt., Sector 9,

Nerul, Navi Mumbai – 400706

Gentleman,

Sub: Investigations under the provisions of the Customs Act, 1962 - reg

This unit is conducting investigations into smuggling of Red Sanders smuggling by a syndicate masterminded by one Rajendra Vitthal Shinde and has seized 7.12 Mts of Red Sanders, prohibited under the CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) on 17-08-2015 valued at Rs.2.86 Crores under the Customs Act, 1962.

2. During the course of investigations, it has been learnt that Rajendra Vitthal Shinde and certain firms/entities controlled by him, have their bank account in yo