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2020 Supreme(Chh) 475
IN THE HIGH COURT OF CHHATTISGARH
P. Sam Koshy, J.
DCB Bank Limited - Appellants
Vs.
State of Chhattisgarh and Ors. - Respondent
WPC No. 222 of 2020
Decided On : 05-02-2020
For the Appellant : Bhavesh Acharya
For the Respondents: V.R. Tiwari, Additional AG
Notice to borrowers is not necessary under Section 14 of the SARFAESI Act when considering an application for possession of secured assets.
Headnote:
SARFAESI Act - Relief sought under Section 14 - [SARFAESI Act] - [Section 14]
Fact of the Case:
The petitioner sought a direction for the respondent to make a decision under Section 14 of the SARFAESI Act regarding their secured creditor status and application for possession of certain properties. The petitioner claimed that the Magistrate's notice to the borrower was unnecessary and caused delay.
Finding of the Court:
The court held that notice to the borrowers was not necessary or justified, based on previous decisions and the provisions of Section 14. The court directed the respondent to decide the petitioner's application within 60 days.
Issues: Relief sought under Section 14 of the SARFAESI Act, necessity of notice to borrowers, delay in decision-making by respondent.
Ratio Decidendi: The court found that notice to borrowers was not required under Section 14 of the SARFAESI Act and directed the respondent to expedite the decision-making process.
Final Decision: The writ petition was disposed of with a direction for the respondent to decide the petitioner's application under Section 14 of the SARFAESI Act within 60 days.
ORDER :
P. Sam Koshy, J.
1. The relief sought for in the present writ petition is for an appropriate direction to the respondent No. 2 to take an appropriate decision under Section 14 of the SARFAESI Act of 2002 at the earliest.
2. According to the petitioner they are secured creditor in respect of the industrial property that situates in a portion of Khasra No. 401/8, Old PH No. 6 and PH No. 19 measuring 99138 square feet at Sinodha RNM Tilda Distt-Raipur, Residential property located at Khasra No. 248 PH15, Sheet No. 3, Plot No. 92, measuring 2430 sqft., Gandhi Chowk, Bazarpara, Tilda Distt. Raipur, Residential property located at Khasra No. 247/2, PH No. 18, Sheet No. 3 Plot Nos. 64 and 65 measuring 2772 sqft. Near Gandi Chowk, Bazarpara, Tilda Distt. Raipur. According to the petitioner they had already issued a notice under Section 13(2) and Section 13(4) to the borrowers and subsequently they had moved an application under Section 14 along with an affidavit with 9 points as is required under proviso Clause 2 Section 14(1) on 28.03.2019. But till date respondent No. 2 as not passed any final order on the said application. Further grievance of the petitioner is that petitioners having moved an application under Section 14 the Magistrate has issued notice to the borrower which is not otherwise required as per the Proviso of Section 14 and by issuance of notice to the borrowers the matter is getting lingered on unnecessarily, and therefore an appropriate direction be given to respondent No. 2 to decide the matter at the earliest.
3. To this limited grievance that petitioner has raised counsel for the State does not have any objection.
4. So far as the proceedings drawn by respondent No. 2 under Section 14 of the Sarfaesi Act is concerned, particularly on the issue whether notice has to be issued under Section 14 or not, it would be relevant at this juncture to refer to a recent Division Bench Judgment of the Madhya Pradesh High Court in the case of Aditya Birla Finance Limited v. Shri Carnet Elias Femandes Vermalayam decided on 13.07.2018 (Reported in AIR 2018 MP 209) wherein the Division Bench in very categorical terms in paragraphs 27 to 29 have held as under:-
"27. We do not find any merit in the said argument as well. The issue raised was a question of fact as to whether the petitioner is in possession of the W.A. No. 784/2018 property in question on the basis of lease agreement. The said judgment refers to the Supreme Court judgment reported as (2014) 6 SCC 1 : (AIR Online 2014 SC 301) (Harshad Govardhan Sondagar v. International Assets Reconstruction Company Limited and others) to hold that such question is required to be decided while considering an application under Section 14 of the Act. But, present is not a case where any such question is required to be decided. The property in question is mortgaged in favour of the appellant; therefore, it is a secured asset. In respect of secured assets, the District Magistrate is duty bound to hand over physical possession to the secured creditor in terms of Section 14 of the Act. Therefore, such judgment provides no assistance to the argument raised.
28. Coming to the argument that opportunity of hearing was not granted to the writ-petitioners and that the order passed by the District Magistrate violates the principles of natural justice is again not tenable. The Bombay High Court in a judgment reported as 2007 Cri LJ 2544 (Bom.): (AIR 2007 Bom 1634) (Trade Well v. Indian Bank) has held that the District Magistrate is not required to give notice either to the borrower or to the third party.. He is only to verify from the Bank whether notice under Section 13(2) of the Act has been issued or not. The said judgment has been quoted with approval by the Supreme Court in a judgment reported as (2013) 9 SCO 620 (Standard Chartered Bank, etc. v. V. Noble Kumar and others, etc), wherein it was held as under:-
"22. However, the Bombay High Court in Trade Well v. Indian Bank [2007 CriLJ 2544 (Bom
