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2023 Supreme(Del) 4606
IN THE HIGH COURT OF DELHI AT NEW DELHI
Satish Chandra Sharma, Subramonium Prasad, JJ.
Justice For All – Appellant
Versus
Laxmi Educational Society & Ors. – Respondents
W.P.(C) 5617 of 2023 & CM APPL. 22013 of 2023
Decided On : 18-05-2023
Mr. Khagesh B Jha, Ms. Shikha Sharma Bagga, Advocates, for the Petitioner.
Mr. Pramod Gupta, Ms. Pranjal, Advocates for R-1 to R-3.
Mr. Sanjay Katyal, Standing Counsel for DDA with Mr. Nihal Singh, Advocate.
Mr. Yeeshu Jain, Standing Counsel with Ms. Jyoti Tyagi, Ms. Manisha, Advocates for R-3 & R-4.
Mr. Santosh Kumar Rout, Standing Counsel for PNB/R-5.
Mr. Santosh Kumar Tripathi, Standing Counsel for GNCTD with Mr.Arun Panwar, Ms. Mahak Rankawat, Mr. Pradyumn Rao, Ms. Aakriti Mishra, Mr. Kartik Sharma, Advocates for R-6 to R-8.
Mr. Anurag Ahluwalia, CGSC with Mr.Abhigyan Siddhant, Mr. Rohit Kumar, Advocates for R-10.
The borrower has an efficacious remedy under SARFAESI Act, and the court must prevent frivolous PILs motivated through extraneous and oblique interests.
Headnote:
SARFAESI Act - Misuse of Public Land - GG Act, TP Act, DDA Act - [SARFAESI Act, 2002, GG Act, TP Act, DDA Act] - The court discussed the applicability of SARFAESI Act to public land allotted under GG Act, the provisions of GG Act, TP Act, and DDA Act. It highlighted the overriding effect of GG Act on SARFAESI Act and the requirements for allotment of public land under DDA Act. The court emphasized the borrower's remedy under SARFAESI Act and the inappropriateness of entertaining a PIL on the issue.
Fact of the Case:
The Petitioner filed a PIL alleging misuse of SARFAESI Act to mortgage public land allotted to charitable societies under GG Act. The Petitioner was concerned about the plight of students, teachers, and staff of a school whose property was taken over by a bank due to loan default.
Finding of the Court:
The court found that the issue of the bank's action under SARFAESI Act affecting the right to education of school children was already pending before the court. It held that the borrower has an efficacious remedy under SARFAESI Act and that the PIL was motivated through extraneous and oblique interests and was frivolous in nature.
Issues: The issues included the applicability of SARFAESI Act to public land under GG Act, misuse of DDA Nazul Rules to obtain loans and mortgage public land, and the appropriateness of entertaining a PIL on the issue.
Ratio Decidendi: The court emphasized the borrower's remedy under SARFAESI Act, the inappropriateness of entertaining a PIL on the issue, and the need to prevent frivolous PILs motivated through extraneous and oblique interests.
Final Decision: The petition was dismissed as frivolous and not fit for the court's extraordinary jurisdiction under Article 226.
JUDGMENT
1. The instant Writ Petition has been filed as a Public Interest Litigation highlighting the alleged misuse of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to mortgage public land allotted to charitable societies under the Government Grants Act, 1895(GG Act) read with rules thereunder. The prayer made by the Petitioner is reproduced as under:
"(a) To declare the SARFESI Act not applicable for the land allotted to the charitable institutions under Government Grant Act, 1882 by virtue of Section 2 and 3 of the Act and direct the Respondent Reserve Bank of India to restrain the Financial Institutions from creating any security interest and its enforcement against the land allotted to Charitable Institutions for running the school under provisions of Delhi Development Act, 1957 read with Nazul Land Rules 1981.
Alternatively in the Case SARFESI ACT has any applicability to the land allotted to the schools pass an appropriate writ order or direction to the respondent Reserve Bank of India to frame the appropriate regulation and mechanism to ensure the protection of students already studying in the school from any disturbance in their education during the recovery process and transfer/sale of mortgaged school land/ school infrastructure to any other organization.
(b) To direct the respondents to ascertain the financial stability of the societies seeking public land for charitable/Institutional purpose (aided/unaided) by misrepresenting them to be financially sound and then risking the valuable fundamental right guaranteed to the Children under Articles 19(1)(a), 21 and 21A of Constitution of India by creating the security interest in favor of bank and financial institutions under the stringent provisions of SARFESI ACT, 2002 which may result in discontinuance of the education of thousands of Children who has been guaranteed to continue and complete his elementary Education as a fundamental right and additionally protected under various provisions of Right of Children to free and Compulsory Education Act, 2009 and Juvenile Justice Care and Protection Act.
(c) to direct the respondent Reserve bank of India to ensure the Strict Compliance of Rule 20 of Nazul Land Rules and ensure the strict protection of Right Guaranteed to the Children under Article 21A of constitution of India in the case any financial institution enforces the Provisions of SARFASI Act, 2002 against any of the School Property including land and playground.
(d) to direct respondent Economic Offence wing to initiate investigation, for the misappropriation/syphoning of public fund by the respondent society, with the collusion of officers of respondent DDA/DOE/Bank, and to recover the amount from the members of society.
(e) To direct the respondent Reserve Bank of India, to frame policy for reconstruction of Social Infrastructure in general and School land in Particular without any change in the nature of infrastructure from charitable to the commercial until then restrict the mortgage of lease hold Nazul land, where the institution has been running.
(f) To pass any other or further orders this Hon'ble court deems fit based on above-mentioned facts and circumstances of the case."
2. The facts in brief, leading to the filing of the present writ petition are that the Petitioner that had came across a report dated 17.04.2023 published in the Times of India titled "Bank takes over school property for loan default" wherein it was stated that the Punjab National Bank (Respondent No. 5) had taken over the property of the Respondent No. 3, i.e., Laxmi Public School (which has been established and managed by Respondent Nos. 1 & 2) on account of default on repayment of a loan. The Petitioner, being concerned about the plight of the students, teachers and staff of the school has filed the present writ petition. He has stated that the use of provisions of SARFAESI Act against schools has become a device u
