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2015 Supreme(Guj) 1039

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
ABHILASHA KUMARI, J.
AUROVILL APPLIANCES PVT LTD. - Petitioner
Versus
DISTRICT MAGISTRATE & ORS. - Respondents
SPECIAL CIVIL APPLICATION NO. 8852 of 2015
Decided On : 05-10-2015

Important Points

Important Point – If there is suppression of material facts on part of petitioner or twisted facts have been placed before Court, Writ Court may refuse to entertain petition and dismiss it without entering into merits of matter.

Subject

Writ Petition - QUASHING OF ORDER

Act Referred

CONSTITUTION OF INDIA : Art.226
SECNRITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT : S.13(4), S.13(13), S.14, S.13(2)

Headnote

(A) Constitution of India – Article 226 – When a party approaches High Court praying for exercise of its discretionary and extra-ordinary jurisdiction under Article 226 of Constitution of India, it must place all facts before Court candidly and without any reservation – If there is suppression of material facts on part of petitioner or twisted facts have been placed before Court, Writ Court may refuse to entertain petition and dismiss it without entering into merits of matter.

       (B) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Section 14 – Eviction of lessee from secured asset – Power under Section 14 has been exercised by Additional District Magistrate by assisting respondent-Bank in taking possession of secured asset – By auctioning disputed property, respondent-Bank is no longer in possession – Without any challenge to auction, auction purchaser cannot be dispossessed of property purchased in a public auction possession of which has been handed over to it, solely because petitioner now seeks to assert its rights as a lessee at this stage – Petitioner is guilty of suppression of material facts which would have a vital effect on adjudication of petition – In view of implementation of impugned order under Section 14 of SARFAESI Act, petitioner cannot seek to undo auction and its legal consequences without even raising a challenge to it – Petition rejected.

       Result – Petition rejected.

Advocates Appeared:
For the Petitioner:Mr. Jal Soli Unwala, Advocate, Ms. Tejal A. Vashi, Advocate for the Petitioner.
For the Respondent:Ms. Shruti Pathak, Assistant Government Pleader for Respondent No. 1 – 2.
Mr. K.M. Parikh, Advocate for the Respondent No. 3.
Rule Served for Respondent No.4.
Served by Affix.-(R) for Respondents No. 5.

JUDGMENT :

ABHILASHA KUMARI, J.

1. This petition under Articles 226 and 227 of the Constitution of India has been preferred, inter alia, with a prayer to quash and set aside the impugned order dated 09.05.2014, passed by respondent No.2 – Additional District Magistrate, Valsad, under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“the SARFAESI Act” for short), on the ground that the said order is without jurisdiction and the authorised officer of respondent No.3 – Central Bank of India, has no power to evict the petitioner, who is a lessee, from the disputed property, in view of the provisions of sub-section 13 of Section 13 of the SARFAESI Act. It is further prayed that the seals and lock applied by respondent No.3 – Bank on the premises of which the petitioner is a lessee be opened and the possession thereof be restored to the petitioner.

2. Briefly stated, the facts of the case emerging from the memorandum of the petition are to the following effect:

2.1 The petitioner is a Company, duly registered under the provisions of the Companies Act, 1956 and is being represented through its Director. Respondent No.1 is the District Magistrate, Valsad, and respondent No.2 is the Additional District Magistrate, Valsad. Respondent No.3 is the Central Bank of India, a Banking Company constituted under the Banking Companies Act (Acquisition and Transfer of Undertakings) Act, 1970.

2.2 The subject-matter of the petition is the property at Plot No.6A, Ranchhodji Nagar, having three floors, situated near Dharampur road, Abrama, Taluka and District Valsad (hereinafter referred to as the disputed property), owned by respondent No.4 (“the original owner” for short).

2.3 The petitioner asserts that it is the lessee of the disputed property and is carrying on its business in the nature of a Mall known as “Mother Mall”, which is being run by the petitioner-Company, of which he and his wife are Directors. The husband of respondent No.4 -Kokilaben Babubhai Patel, the original owner, had taken a loan, from the respondent - Bank on 07.01.2012 by mortgaging the disputed property as a collateral security. The said loan was in the nature of a cash-credit facility, to the tune of Rs.75 lakhs, approximately. In the said loan, respondent No.4, the original owner, was named as a guarantor.

2.4 It is the case of the petitioner that somewhere in the month of December 2011, the petitioner intended to occupy the disputed property for the purpose of its business in the nature and style of a Mall, by taking the disputed property on hire. According to the petitioner, sometime around December, 2011, a sum of Rs.2 lakhs was paid by the petitioner to the original owner towards the lease between the original owner and the petitioner.

2.5 On 07.02.2012, the petitioner and the original owner completed the formality of signing the lease deed of the disputed property, for a period of ten years. The petitioner had also undertaken the exercise of renovating the disputed property and incurred expenses towards the same.

2.6 Thereafter, due to the default in the repayment of the installments of the cash- credit facility availed of by the original owner, who was running the business in the name and style of M/s.B.G.Enterprises, the respondent-Bank issued a notice under the provisions of Section 13(2) of the SARFAESI ACT to M/s.B.G.Enterprises, on 28.10.2013.

2.7 On 13.02.2014, the respondent – Bank, through its authorised officer, issued a statutory notice under the provisions of Section 13(4) of the SARFAESI Act to M/s.B.G.Enterprises for taking over the possession of the said property. On 17.02.2014, the possession notice under section 13(4) of the SARFAESI Act was published in a daily newspaper.

2.8 According to the petitioner, though the respondent-Bank had knowledge that the petitioner is the lawful lessee of the disputed premises, its authorised officer did not join the petitioner as party to the proceedings un




































































































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