2022 Supreme(Cal) 1524
IN THE HIGH COURT AT CALCUTTA
T.S. SIVAGNANAM, BIVAS PATTANAYAK, JJ.
Tapasi Routh Nee Sinha Roy – Appellant
Versus
State of West Bengal and Others – Respondents
F.M.A. No. 67 of 2021, IA No. CAN 1 of 2019 (Old No. CAN 4974 of 2019)
Decided On : 14-07-2022
Advocate Appeared:
For the Appellants : D. Saha Roy, S.N. Mitra, Pingal Bhattacharyya, Subhankar Das, Neil Basu.
For the Respondents: Amitesh Banerjee, Tarak Karan, R.C. Prusti, Sanjib Das.
Headnote:
Constitution of India, 1950 - Article 227 - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 14(1), 17 - Claimed to be in possession of property - Debt Recovery Tribunal - Application for temporary injunction - Held, Court have no hesitation to hold that not placing order passed by Division Bench before District Magistrate is definitely prejudicial to interest of appellant as District Magistrate had no occasion to make any observation as regards effect of such order - It is not clear as to why respondent-Bank failed to place order passed by Hon'ble Division Bench before District Magistrate - Court are called upon to consider as to correctness of the procedure adopted by District Magistrate before passing order - Thus, when there is procedural infraction and there has been violation of principles of natural justice, Court can exercise jurisdiction under Article 227 of Constitution of India - Appeal allowed.
JUDGMENT :
T.S. SIVAGNANAM, J.
1. This intra court appeal filed by the writ petitioner is directed against the order dated 21st February, 2019 passed in W.P. No. 7039 (W) of 2018. In the said writ petition, the appellant, who claimed to be in possession of the property, which is subject-matter of action under the provisions of the SARFAESI Act, 2002 at the instance of the respondent- Bank, challenged the order passed by the District Magistrate, Paschim Medinipur, dated 06.06.2017, in exercise of his power under Section 14(1) of the SARFAESI Act, 2002. The appellant is not the borrower but the 8th respondent is the borrower, who has defaulted in repayment and the respondent-Bank has rightly proceeded against him under the provisions of the SARFAESI Act, and they are armed with an order passed by the Debt Recovery Tribunal. Since, actual physical possession could not be taken up, the respondent-Bank moved the District Magistrate by filing an application under Section 14(1) of the Act to assist them and to secure actual physical possession of the property in question which has been mortgaged to the respondent-Bank. This application was disposed of by order dated 06.06.2017 and directions were issued to the police authorities to enable the respondent-Bank to obtain actual physical possession of the mortgaged property.
2. The appellant had challenged the order dated 06.06.2017 passed under Section 14(1) of the Act on several grounds and, in particular, that the pendency of the civil proceedings and the various orders passed by the civil court as well as the Hon’ble Division Bench of this Court were not placed before the District Magistrate and, therefore, the appellant has been prejudiced.
3. The learned Single Judge by the impugned order pointed out that the District Magistrate by its order dated June 6, 2017, passed under Section 14 of the Act, has noted that the Bank has claimed that there was no Title Suit lying or pending before any court of law. After noting the said statement made in the order passed by the District Magistrate, the learned Writ Court proceeds to observe that the respondent-Bank ought to have been more careful while disclosing before the District Magistrate and it should have disclosed the pendency of the Title Suit before the learned Single Judge and the order passed therein. Though such finding was recorded, the learned Writ Court was of the opinion that non-disclosure of the civil proceedings in the facts and circumstances of the case is not fatal to the application under Section 14 of the Act. Further, the Court observes that there is no material placed on record to suggest that, had the District Magistrate been apprised of the pendency of the suit or the order passed in the suit and in the appeal, he would not have passed the order dated June 6, 2017 and with the such observations, the writ petition was dismissed.
4. Aggrieved by the said, the appellant is before us by way of this appeal.
5. As could be seen from the impugned order, learned Writ Court had accepted the fact that the respondent-Bank did not disclose about the pendency of the civil proceedings. However, learned Writ Court was of the opinion that non-disclosure is not fatal. The correctness of the finding needs to be decided in this appeal.
6. Learned advocate for the respondent-Bank vehemently submits that the power under Section 14 of the Act clearly provides for the Bank to move the District Magistrate where the possession of the secured asset is required to be taken by the secured creditor and this provision was rightly invoked by the respondent-Bank and the appellant had not moved the Debt Recovery Tribunal under Section 17 of the SARFAESI Act at the relevant point of time and the writ petition itself was not maintainable. Further, it is submitted that the appellant has subsequently filed an application before the Debt Recovery Tribunal under Section 17 of the Act, which fact was not disclosed before this Court.
7. In the instant appeal, we are