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IN THE HIGH COURT OF CALCUTTA
Ajoy Kumar Mukherjee, J.
Srikant M Abuj And Others - Appellant
Versus
Soharab Sekh - Respondent
CRR No. 1554 of 2020
Decided On : 31-08-2022
SARFAESI Act - Loan Recovery - 13(2), 13(4), 14 - The court discussed the provisions of the SARFAESI Act, 2002, specifically sections 13(2), 13(4), and 14, and their application in the case. The court highlighted that the bank had lawfully initiated proceedings under the relevant provisions of the SARFAESI Act and had taken possession of the mortgaged property due to non-payment of the outstanding loan amount. The court emphasized that the dispute between the parties regarding the taking over of the mortgaged property was purely civil in nature and that the allegations in the complaint appeared to be absurd and inherently improbable. The court referred to the State of Haryana Vs. Bhajanlal case to support the quashing of the proceeding under section 482 of the code.
Fact of the Case:
The bank had initiated proceedings under the SARFAESI Act and taken possession of the mortgaged property due to non-payment of the outstanding loan amount. The complainant alleged illegal trespass, assault, and harassment by the bank officials, which the court found to be absurd and inherently improbable.
Finding of the Court:
The court found that the complaint did not disclose a prima facie cognizable offence and that further proceeding would be an abuse of the process of the court. Therefore, the court quashed the proceeding under section 482 of the code.
Issues: The issues revolved around the legality of the bank's actions under the SARFAESI Act, the allegations of illegal trespass and assault, and the appropriateness of continuing the criminal proceeding.
Ratio Decidendi: The court applied the principles established in the State of Haryana Vs. Bhajanlal case to determine that the proceeding should be quashed as it did not disclose a prima facie cognizable offence and would amount to an abuse of the court's process.
Final Decision: The court quashed the proceeding under section 482 of the code, allowing CRR 1554 of 2020.
JUDGMENT
Ajoy Kumar Mukherjee, J. - Being dissatisfied with the proceeding being CR case No. 68/2018 under section 323, 341/34 of the Indian Penal Code, pending before the learned court of Judicial Magistrate, First Court, Kalna, Purba Burdwan, Present application under section 482 read with section 401 of the code of Criminal Procedure has been preferred. Petitioners herein contended that opposite party/complainant's father namely Rabiul Sekh is the borrower of the petitioner's bank and approached for a term loan of Rs. 8 Lakhs and additional adhoc loan of Rs. 1.50 Lakhs. After perusing and verifying all the documents, the bank had sanctioned the term loan and same was disbursed which was duly accepted by the opposite party/complainant's father, without any protest.
2. At the time of sanctioning the said term loan, the opposite party mortgaged the property, which is the property in question in the present complaint and opposite party also mortgaged deed lying in the custody of the petitioner's bank, including the form of intent to mortgage dated 10.03.2008 and the memorandum of title deeds dated 11.03.2008 duly executed by the opposite party in favour of petitioner's bank.
3. Since the borrower /opposite party's father made default in payment of loan amount, the bank was constrained to issue a notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 hereinafter called as SARFAESI Act, on 17th June 2010 and bank on 11 January 2011 was constrained to issue possession notice under section 13(4) of SARFAESI Act with Rule 8(1) of SARFAESI Rule 2002. The total due of bank is Rs. 56,22,010.13/- as on 18.07.2019.
4. Mr Soumalya Ganguly on behalf of the petitioners, submit that due to default made by the opposite party/complainant's father for the payment of the dues, the bank had taken appropriate steps in accordance with SARFAESI Act, 2002, following all the procedures and had taken possession of the mortgaged property (secured assets) as per the order passed by the District Magistrate, Burdwan on 25.04.2013 under section 14 of the SARFAESI Act. Accordingly Nandan Ghat police along with lady police personnel, attached thereto, helped the bank authorities to take physical possession of the said mortgaged property, duly following the proper procedure such as preparation of the inventory dated 26.07.2017, panch nama dated 26.07.2017, and also conducted proper videography of the whole process Opposite party/complainant had already filed writ for police inaction being WP No. 22140 (w) of 2017 before the Hon'ble High Court, Calcutta which was disposed of on 31.08.2017, observing that the police authority in this case had acted in accordance with law and that a criminal case had been filed against opposite part/complainant which was registered as Nandan Ghat P.S. Case No. 205/2017 dated 10.08.2017 under sections 453/461/506/34 of the I.P.C.
5. Mr. Gangully further submits that the petitioner no. 1 was not present during the time of taking the physical possession and his name has been included in the complaint with wrongful intention and to harass petitioner no. 1. He further submits that the entire premise for filling such criminal case is false and frivolous and not legally sustainable in the eyes of law, since the entire crux of the criminal case arises out of default /non payment, made by the borrower /opposite party's father and the intimation of SARFAESI proceeding was duly complied. The opposite party created a facade by filing such complaint case, only with mala fide intention to harass officers of the bank from taking steps for recovery of the legitimate dues of the bank. Therefore, the intention of impugned proceeding is clearly with malafide intention to harass and vex the bank and it's officers and as such, it is liable to be quashed. He further submits that on perusal of the complaint it appears that all the accused persons reside at places beyond the terri
The main legal point established in the judgment is that criminal proceedings can be quashed under section 482 of the code when the complaint does not disclose a prima facie cognizable offence or whe....
Bank officers are protected from criminal liability for actions taken in good faith under the SARFAESI Act, specifically under Section 32, which applies to statutory actions related to the enforcemen....
Criminal proceedings against bank officials for lawful actions under the SARFAESI Act constitute an abuse of process and are not maintainable.
A secured creditor loses its rights under the SARFAESI Act upon the auction of mortgaged property, precluding further claims for possession under the same Act.
The court quashed proceedings under Section 340 CrPC, ruling that allegations of forgery lacked merit and constituted an abuse of process due to pending appeal in Debt Recovery Appellate Tribunal.
No civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which the Debt Recovery Tribunal is empowered to determined.
Criminal proceedings cannot be initiated to challenge actions taken under the SARFAESI Act, as it undermines the exclusive jurisdiction of the Debt Recovery Tribunal.
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