A secured creditor can maintain an application for possession under Section 14 of the Act of 2002 even after taking over symbolic possession before the sale of the property to the auction purchaser.

DEBANGSU BASAK, J.

1. The petitioner is a purchaser of an immovable property in an auction conducted by a secured creditor under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (Act of 2002). The petitioner complains that, the petitioner has not been put into possession of the immovable property till date. He seeks suitable direction upon the Bank.

2. The State, Bank and the private respondents are represented.

3. Learned advocate for the Bank submits that, application made to the District Magistrate under Section 14 of the Act of 2014 is yet to be disposed of. Consequently, the bank is not in a position to make over the actual physical possession of the secured asset to the purchaser. He seeks a direction upon the District Magistrate to dispose of such application. He relies upon (ITC Limited Vs. Blue Coast Hotels Limited & Ors., (2018) 15 SCC 99) and (Hindon Forge Private Limited & Anr. Vs. State of Uttar Pradesh through District Magistrate, Ghaziabad & Anr., 2019 2 SCC 198) in support of his contentions.

4. Learned advocate for the State submits that, the bank having sold the immovable property concerned, it does not retain any security interest in respect of the secured asset so as to continue with the proceedings under Section 14 of the Act of 2002.

5. In the facts of the present case, the petitioner purchased the immovable property in an auction conducted under the Act of 2002. The petitioner is yet to be put into possession of the immovable property concerned. Apparently, the debtor is continuing to be in possession of the immovable property. The bank applied under Section 14 of the Act of 2002 before the concerned District Magistrate for police assistance. Such application is yet to considered and decided by the concerned District Magistrate.

6. The question whether, a secured creditor can continue to invoke the provisions of the Act of 2002, after the sale of the secured asset came up for consideration before the Supreme Court in ITC Limited (supra). It holds as follows:

"46. The question, however, whether the creditor could maintain an application of possession under Section 14 of the Act; even though it had taken over only symbolic possession before the sale of the property to the auction purchaser, depends on whether it remained a secured creditor after having done so. Section 2(l)(d) of the Act defines 'secured creditor' to mean a "banking company" having the meaning assigned to it in clause (c) of section 5 of the Banking Regulation Act, 1949; Section 2(1)(L) includes debts or receivables and any right or interest in the security whether full or part underlying such debt or receivables or any beneficial interest in property vide Sections 2(l)(i)(iv) & (v), Sub-section (6) of Section 13 posits that the transfer of the secured asset by the secured creditor shall vest in the transferee all the rights as if the transfer had been made by the owner of the secured asset.

47. In Mulla's the Transfer of Property Act:-

"The section (Section 8) does not apply to court sales, for such sales effect a transfer by the operation of law. The principle of the section was, however, applied in a case decided by Madras High Court where a debt for unpaid purchase money on a sale of land was attached and sold, and the auction purchaser was held entitled to the charge which the vendor had under Section 55(4) (b) on the property in the hands of the buyer. The court, after observing that the present section did not apply to court sales, said:

7. ... The effect of applying s 8 is to strengthen the sale certificate by transferring the lien along with it."

This Court observed in Abdul Aziz that a sale through court is different from a sale inter parties:-

"What is sold at a court sale is the right, title and interest of the judgment debtor, and the extent of that interest is a mixed question of fact and law to be decided according to the circumstances of each particul