The District Magistrate is not empowered to adjudicate upon the issue of registration of the deed of assignment while passing an order under section 14 of the SARFAESI Act.

JUDGMENT :

1. Heard learned advocate Mr. Tirth Nayak for learned Senior Advocate Mr. Navin Pahwa for the petitioner, learned Assistant Government Pleader Mr. Trupesh Kathiriya for the respondent no.1 and learned advocate Mr. Pavan S. Godiawala for respondent nos. 2 and 3.

2. Rule returnable forthwith. Learned Assistant Government Pleader Mr. Trupesh Kathiriya waives service of notice of rule on behalf of respondent no.1 and learned advocate Mr. Pavan S. Godiawala waives service of notice of rule on behalf of respondent nos.2 and 3.

3. This Court (Coram : Hon’ble Smt. Justice Abhilasha Kumari, As Her Ladyship was then) passed the following order on 24th August, 2015 :

“Heard Mr.Navin K. Pahwa, learned advocate for Thakkar and Pahwa Advocates on behalf of the petitioner.

It is submitted that the impugned order passed by the District Magistrate is unsustainable in law, as the view that an assignee bank cannot enforce the security created in favour of the assignor bank has been negatived by the Supreme Court in ICICI Bank Limited Vs. Official Liquidator of APS Star Industries Limited and others, reported in (2010) 10 SCC 1.

Issue Notice for final disposal, returnable on 07.09.2015.

In addition to the normal mode of service, the learned advocate for the petitioner is permitted to serve the respondents through RPAD, at the cost of the petitioner.”

4. By this petition under Article 226 of the constitution, the petitioner has prayed for the following reliefs :

“(A) YOUR LORDSHIPS may be pleased to issue an appropriate writ, order or direction and quash and set aside the impugned order dated 24th June, 2015 passed by the Respondent as being contrary to law, in breach of the principles of natural justice as also violative of Article 14, 19(1)(g) of the Constitution of India;

(B) YOUR LORDSHIPS may be pleased to issue an appropriate writ, order or direction to the Respondent to take action for taking possession of the secured assets and hand over possession of the same to the Petitioner, in the interest of justice and equity, within a period of 2 weeks or such other period as this Hon'ble Court deems fit and proper, after allowing the Application of the Petitioner dated 5th January 2015;

(C) YOUR LORDSHIPS may be pleased to grant interim and ad-interim reliefs in terms of prayer (B);

(D)YOUR LORDSHIPS may be pleased to award costs of this petition;

(E) YOUR LORDSHIPS may be pleased to grant such other and further reliefs as may be deemed fit and proper are deemed fit, in the interest of justice;”

5. Brief facts of the case are as under :

5.1) The petitioner is a banking company and is an assignee of ICICI Bank Ltd. Various credit facilities were sanctioned and granted by the ICICI bank to respondent no.2- Shree Narmada Aluminum Industries Ltd along with erstwhile IDBI Bank Ltd and IFCI Ltd. between August 1985 and July 1986. The credit facilities were secured by equitable mortgage by way of first paripassu charge on the property situated at Survey No.95/1, Mouje Bholav, Taluka Bharuch, District Bharuch by way of title deeds with IDBI acting for itself and as an agent of ICICI and IFCI. The said deposit of title deeds was recorded by way of Memorandum of Entry dated 2nd September, 1986. Like-wise first pari passu charge in respect of movables were described in the Deeds of Hypothecation dated 1st August, 1985 and 21st July, 1986.

5.2) Due to various defaults committed by respondent no.2 in the repayment of the said credit facilities, its account was classified as Non Performing Asset (NPA).

5.3) In view of such defaults, ICICI bank filed Original Application No. 229/2003 before the Debts Recovery Tribunal-III, Mumbai which is pending as on date.

5.4) In the meanwhile, the ICICI bank assigned the debts due to it from respondent no.2 in favour of the petitioner vide a Deed of Assignment dated 29th September, 2004 along with all underlying securities.

5.5) The respondent no.2 company had filed a Scheme of Compromise and/or Arrangement being Company Petition N