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IN THE HIGH COURT AT CALCUTTA
SHAMPA DUTT (PAUL), J.
Jigar Chinu Dalal – Petitioner
Versus
State of West Bengal and Another – Respondents
CRR No. 1809 of 2019
Decided On : 28-06-2023
SARFAESI ACT - SECTION 32 - PROTECTION OF ACTION TAKEN IN GOOD FAITH - QUASHING OF PROCEEDINGS - SECURED CREDITOR PROTECTED UNDER SECTION 32 OF THE SARFAESI ACT - ACTS DONE IN GOOD FAITH - NO COGNIZABLE OFFENCE UNDER SECTION 79 OF THE INDIAN PENAL CODE - ENTRY INTO PREMISES UNDER SECTION 13 OF THE SARFAESI ACT DOES NOT AMOUNT TO CRIMINAL TRESPASS.
Fact of the Case:
The petitioner, an authorized officer of ARCIL, a company registered under the SARFAESI Act, took possession of the secured assets of KJIL, a company referred to BIFR under SICA, after issuing a notice under Section 13(2) of the SARFAESI Act. KJIL filed a complaint alleging commission of offences under Sections 448/323/506/120B of the Indian Penal Code and under Section 25/27 of the Arms Act against the petitioner and others. The petitioner filed a revision petition praying for quashing of the proceedings.
Finding of the Court:
The court held that the acts of the petitioner were done in good faith under the provisions of the SARFAESI Act and the same do not constitute an offence in view of Section 32 of the SARFAESI Act. The alleged entry of the petitioner into the premises of KJIL in exercise of the rights provided under Section 13 of the SARFAESI Act cannot amount to an act of trespass, far less criminal trespass constituting an offence under Section 448 of the Indian Penal Code. The court further held that the further investigation ordered by the Magistrate against the petitioner was not in accordance with law as investigation in respect of the letter dated 18.04.2011 was already on record in the final report, dated 18.05.2011. The final report against the petitioner was submitted on the basis of the letter dated 18.04.2021 filed by the complainant in respect of the amicable settlement with the petitioner as he was protected under Section 32 of the SARFAESI Act.
Issues: 1. Whether the acts of the petitioner were done in good faith under the provisions of the SARFAESI Act? 2. Whether the alleged entry of the petitioner into the premises of KJIL in exercise of the rights provided under Section 13 of the SARFAESI Act amounts to an act of trespass or criminal trespass? 3. Whether the further investigation ordered by the Magistrate against the petitioner was in accordance with law?
Ratio Decidendi: 1. Section 32 of the SARFAESI Act provides protection to secured creditors or their officers or managers for anything done or omitted to be done in good faith under the Act. 2. The entry of the petitioner into the premises of KJIL in exercise of the rights provided under Section 13 of the SARFAESI Act cannot amount to an act of trespass or criminal trespass as the petitioner was acting in good faith and in accordance with the law. 3. The further investigation ordered by the Magistrate against the petitioner was not in accordance with law as investigation in respect of the letter dated 18.04.2011 was already on record in the final report, dated 18.05.2011.
Final Decision: The revision petition was allowed and the proceedings against the petitioner were quashed.
JUDGMENT :
SHAMPA DUTT (PAUL), J.
1. The present revision has been preferred praying for quashing of proceeding in Uluberia Police Station Case No. 27 of 2010 dated 14.01.2010, under Sections 448/323/506/120B of the Indian Penal Code, 1860 corresponding to G.R Case No. 66 of 2010 pending before the learned Judicial Magistrate, 1st Court at Uluberia, Howrah.
2. The petitioner's case is that the petitioner is a Vice President of Asset Reconstruction Company (India) Limited (hereinafter referred to as ARCIL), a company incorporated under the Companies Act, 1956 having his office at 29, Senapati Bapat Marg, 10th floor, The Ruby, Dadar (W) Mumbai-400 028. ARCIL is a Securitisation Company established under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI act, 2002) and is registered with the Reserve Bank of India to act as a 'Securitisation Company'.
3. Kanoria Jute and Industries Ltd. is a company incorporated in the year 1929 and is a company within the meaning of the Companies Act, 1956 (hereinafter referred to as KJIL). The said company was engaged in manufacture of traditional jute products.
4. In the year 1987, the said Company was referred to the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as SICA). The aforesaid reference was registered as Case No. 11 of 1987. BIFR, by its order dated 15.09.1987, declared the said company to be a sick industrial company within the meaning of SICA.
5. KJIL had taken a loan from the Bank of India which remained unpaid by the said company. Such debts of KJIL was subsequently assigned to ARCIL by Bank of India.
6. On 17.03.2009, ARCIL issued a notice under Section 13(2) of the SARFAESI Act, 2002 to KJIL calling upon KJIL to repay the amount of Rs.2,30,08,31,501/- together with interest, against the loan taken from the Bank of India.
7. In response to the said notice under Section 13(2) of the SARFAESI Act, KJIL issued a response dated 15.06.2009.
8. ARCIL replied to such response of KJIL by its letter dated 29.06.2009.
9. ARCIL thereafter proceeded under Section 13(4) of the SARFAESI Act, 2002 and took possession of the secured assets of KJIL being its mill situated at Sijberia, Uluberia, District Howrah on 12.01.2010. The possession was handed over by KJIL by preparing an Inventory and Panchnama. The factum of such possession was also informed to the Officer-in-Charge, Uluberia Police Station through a letter dated 12.01.2010.
10. As a retaliatory measure, KJIL acting through the opposite party no. 2, filed a letter of complaint with the Officer-in-charge of Uluberia Police Station, therein alleging commission of offences punishable under Sections 448/323/506/120B of the Indian Penal Code and under Section 25/27 of the Arms Act, inter alia, by the Officers/Representatives of ARCIL, including the petitioner herein.
11. The allegations levelled against the petitioner in the complaint are:
(a) That on 12.01.2010, officers/representatives of ARCIL along with 30/40 hired hooligans equipped with deadly weapons and acting in collusion and conspiracy with each other have been committing various wrongful, illegal and criminal acts at and around the said jute mill.
(b) That such persons broke open the lock at the mill and trespassed into the jute mill premises in an illegal manner by use of force and violence. That such persons committed unlawful assembly, intimidation, abuses, assault and trespassed into the property and the same was duly reported to the Uluberia Police Station vide General Diary Entry No. 951 dated 12.01.2010.
(c) It was also alleged that the petitioner along with men and agents of ARCIL was accompanied by some gunmen and anti-socials who threatened to break open the padlock of the godowns and would take away the plants, machineries along with the stock of raw jute lying there at by use of f
AI
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