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IN THE HIGH COURT OF DELHI AT NEW DELHI
Amit Bansal, J.
Housing Development Finance Corporation Ltd. – Petitioner
Versus
Rakesh Kumar & Ors. - Respondents
CM(M) 647 of 2021
Decided On : 09-12-2021
Constitution of India, 1950 - Article 227 – Civil Procedure Code, 1908 - Order 39 Rule 3 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2), 14, 17, 13(4), 34 - Whether there is any requirement or justification to fix a time limit by CMM for taking possession of secured asset while exercising jurisdiction under Section 14 of SARFAESI Act - Whether an order passed in a civil suit instituted by a third party in respect of mortgaged property/secured asset would bind secured creditor, if said secured creditor was not a party to Civil Suit.
Finding of the court : Section 34, no injunction can be granted by any court in respect of any action taken in pursuance of any power under the SARFAESI Act - Civil court, in present case, did not have any jurisdiction to pass an injunction against the petitioner - impugned order, to extent it holds that since order in civil suit has been passed by a court which is senior in hierarchy of courts to CMM, it would be against judicial discipline to pass an order under Section 14 of SARFAESI Act, is set aside - CMM is directed to pass fresh orders appointing a receiver to take physical possession of secured asset without fixing any time limit within which possession may be taken - There is no requirement or justification for CMM to fix a time limit for taking possession of secured asset while exercising jurisdiction under Section 14 of SARFAESI Act - In context of proceedings initiated under SARFAESI Act, an order passed in a civil suit instituted by a third party in respect of mortgaged property/secured asset would not bind secured creditor, if said secured creditor was not a party to Civil Suit - A copy of this judgment be forwarded to Principal District & Sessions Judges in Delhi for circulation to all CMMs for compliance in proceedings under Section 14 of the SARFAESI Act.
Result : Appeal dismissed
JUDGMENT :
1. The present petition under Article 227 of the Constitution of India impugns orders passed by the Chief Metropolitan Magistrate (CMM), South West, Dwarka Courts, New Delhi, being (i) the order dated 30th March, 2021, whereby a further period of ninety days has been granted to the court appointed receiver for complying with the order dated 15th October, 2019, whereby the said receiver was appointed to take possession of the secured asset; and, (ii) the order dated 17th August, 2021, whereby the Court of the CMM has failed to pass any orders qua the extension of time in view of the status quo orders passed by the Additional District Judge (ADJ)-01, South West, Dwarka Courts, New Delhi in the suit filed by the respondent no.3 against the respondents no.1 and 2.
2. Notice was issued in the said petition on 23rd September, 2021. Reply has been filed on behalf of the respondents no.1 and 2 and on behalf of the respondent no.3. Oral submissions were made by the counsel for the petitioner and the counsel for the respondents no.1 and 2 on 10th, 11th and 16th November, 2021. However, no oral submissions have been made on behalf of the counsel for the respondent no.3. Judgment was reserved on 16th November, 2021 and all the parties have filed written submissions.
3. Before dealing with the contentions of the parties, it is deemed apposite to give a brief résumé of facts preceding the filing of the present petition.
3.1 A loan of Rs.1,23,86,908/- was disbursed by the petitioner to the respondents no.1 and 2 for purchase of Flat No.302, 3rd Floor, Block-B, Udyog Vihar CGHS Ltd., Plot No.12, Sector-22, Dwarka, New Delhi-110075 (subject property).
3.2 On 31st July, 2021, the said loan account was classified as Non Performing Asset (NPA) and a demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was issued on 15th June, 2018. As per the demand notice, a sum of Rs.1,10,14,973/- was payable by the respondents no.1 and 2 as on 30th April, 2018, along with interest.
3.3 Upon failure of the respondents no.1 and 2 to pay the aforesaid amount, an application under Section 14 of the SARFAESI Act was filed by the petitioner before the Court of the CMM.
3.4 Vide order dated 15th October, 2019, the CMM appointed a court receiver and gave the said receiver three months time to execute the said order.
3.5 The court receiver issued a notice on 4th November, 2019 and fixed the date for taking possession of the subject property on 26th November, 2019.
3.6 A Securitization Application (SA) under Section 17 of the SARFAESI Act was filed on behalf of the respondents no.1 and 2 before the Debt Recovery Tribunal-I, Delhi (DRT) and the DRT vide order dated 26th November, 2019 passed an interim order in terms of which the taking over of possession of the subject property was deferred.
3.7 Vide order dated 10th March, 2021, the DRT clarified that the interim stay granted by the DRT on 26th November, 2019 was valid only till 23rd December, 2019.
3.8 On 30th March, 2021, the petitioner moved an application before the CMM seeking extension of the order dated 15th October, 2019 and the CMM, vide the impugned order dated 30th March, 2021, granted an extension of three months for taking possession of the subject property.
3.9 The court receiver issued notice on 31st March, 2021 to the respondents no.1 and 2, stating that possession of the subject property will be taken on 23rd April, 2021.
3.10 An application was filed on behalf of the respondents no.1 and 2 before the DRT on 20th April, 2021 seeking stay against the taking of possession. The said application was dismissed by DRT on 20th April, 2021.
3.11 Against the order dated 20th April, 2021 of the DRT, the respondent no.2 filed an appeal, which was dismissed by the Debt Recovery Appellate Tribunal (DRAT) vide order dated 13th July, 2021.
3.12 In the meanwhile, the respondent no.3 filed a suit for mandatory injunction
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