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IN THE HIGH COURT OF JHARKHAND AT RANCHI
SUJIT NARAYAN PRASAD, J.
M/s. Magadh Spun Pipes Limited through its Director Subash Abhimanu Singh - Appellant
Versus
The State of Jharkhand through the Chief Secretary, Government of Jharkhand, Ranchi - Respondent
W.P. (C) No. 2223 of 2019
Decided on : 11-06-2019
Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 14 - Immovable property – Jurisdiction – Bank - Learned counsel appearing for Respondent-Bank has submitted that petitioner has come out with disputed question of facts raising an issue of commission of fraud and as such same may not be looked into under writ jurisdiction - Further submission has been made that order passed under Section 14 of SARFAESI Act 2002, has been assailed on ground of commission of fraud but so far as power which is to be exercised by Collector under Section 14 (2) of SARFAESI Act 2002 District Magistrate is to act upon request being made by Secured Creditor to take possession of such assets and documents relating thereto and forward such assets and documents to Secured Creditor therefore District Magistrate on requisition made by Secured Creditor has exercised aforesaid power and while doing so no infirmity has been committed therefore same may not be interfered with – Held, Learned senior counsel for petitioner has emphatically submitted that before resorting to provision of Section 14 of Act 2002 no notice has been given but that argument is having no force it is for reason that concerned Magistrate is not required to give notice to borrower or to third party, but he has to only verify from the Bank or Financial Institution whether notice under Section 13 of Act, 2002 was given or not and whether secured assets fall within his jurisdiction and there shall be no adjudication of any kind at that stage and it is only if above conditions are not fulfilled concerned Magistrate can refuse to pass order and not otherwise, Reference in this regard be made to judgment rendered by High Court in case of South Indian Bank Ltd.-Vs.-Union of India and others reported in wherein dealing with the role of the Chief Metropolitan Magistrate/District Magistrate as envisaged under Section 14 of SARFAESI Act, 2002 only with a limited jurisdiction to see whether property is a secured asset or not - Said jurisdiction is only with regard to assistance to be given to party/secured creditor to take possession of the property over which the security interest has been created - Secured creditor is at liberty to take possession of property even without intervention of the Magistrate - Wordings under Section 14 of Act are very much significant and do not require any other condition to be satisfied, except two parameters, specified therein and once the Magistrate finds that conditions are satisfied he is bound to extend necessary assistance called for - In case of Standard Chartered Bank and others Vs. V. Noble Kumar and others reported in wherein also the order passed under Section 14 of SARFAESI Act, 2002 was one of the subject matter and while dealing with the same Apex Court in the aforesaid judgment has been pleased to hold that even in case of Section 14, an appeal can be filed before the Debt Recovery Tribunal in view of the provision of Section, as has been decided by Apex Court in the case of Chemicals Ltd. v. Union of India reported - Coming to the factual aspects involved in this case, it is admitted case of petitioner that fraud has been committed by mortgaging the property in question by virtue of fake Lease Deed, said to have been executed and therefore same according to petitioner is a forged one, but aforesaid Lease Deed is forged or not, a declaration is required to be given by appreciating various factual aspects which is not proper to be done by this Court by exercising power conferred under Article 226 of Constitution of India – Appeal dismissed
This writ petition is under Article 226 of the Constitution of India in which the following prayers have been made:-
(i) For quashing the order dated 20th February, 2017 (Annexure-3), passed by the Respondent No. 2 in exercise of the power conferred under Section 14 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (in short ‘SARFAESI Act, 2002) authorizing his subordinate authority to remove the petitioner and its officials, workers from the factory and office premises of the petitioner company and seal the same by taking over physical possession of entire movable and immovable property of the petitioner as being without jurisdiction, fraudulent, without authority of law;
(ii) To direct and command the respondent-authorities to remove the lock and unseal from the premises with immediate effect to the petitioner and restore back the possession of premises at Hirodih within Jainagar Police Station of Koderma District.
(iii) To Award reasonable compensation against the authorities for illegality committed resulting into serious damage/loss of reputation and the good will of the petitioner Company and for loss and damage done to the properties of the Company for a sum of Rs.5,00,00,000/-.
(iv) To pass an order/direction commanding upon the authorities to get the matter of banking scandal of more than two hundred core syphoned away clandestinely in collusion with State Bank officials and sham loanee so that the culprits responsible for huge depredation of public money may be caught hold of;
2. The factual background of the case, as per the pleading made in the writ petition is that a Company in the name of Gaday Iron & Steel Company Ltd. having its registered office in Kolkata went into liquidation and by order of the Hon’ble Kolkata High Court passed sometime in the year 1982, the official liquidator took over possession of assets of the said company situated at Village Hirodih in the District of Koderma, Jharkhand, who has published a notice for auction of the properties whereupon Bihar Industrial Development Corporation (in short ‘BSIDC’), A Government of Bihar company filed its quotation for purchase of the properties of the said Company, in total a sum of Rs.One crore 10 Lakh. The offered price of the aforesaid Company was approved by the Hon’ble Apex Court in Civil Appeal no. 1513 of 1982 and thereafter, a sale deed was executed by the official liquidator, Kolkata High Court in favour of the B.S.I.D.C. on 17.07.2009, which was ultimately registered by the District Sub Registrar, Koderma on 06.09.2011 and in view thereof, the BSIDC has become the lawful owner of the properties of Gaday Iron & Steel Company Ltd. with effect from 17.07.2009 for the entire immovable properties described in the schedule of properties, but, since the B.S.I.D.C. was not in a position to run the industry, as such, it decided to sell out the said factory and all assets attached to it. Accordingly, after following due process, the B.S.I.D.C. had executed a Sale Deed in favour of the petitioner company for total consideration of Rs.16,00,00,000/-by Registered Deed No. 624, dated 05.03.2012 and the possession of the Factory and properties of BSIDC was taken over by the petitioner with effect from 05.03.2012 and thereafter, it has invested a huge amount for its infrastructural development, but, all of a sudden, the petitioner came to know about pendency of a SARFAESI proceeding, when the police force came to the factory premises of the petitioner on 04.01.2019, which was for execution of an order, passed by the Deputy Commissioner, Koderma, who forcibly taken over the possession of the entire properties and handed over possession in favour of the Respondent-SBI (SAMB) Bank, Kolkata and when, he has got copy of the order dated 20th February, 2017, passed by the Deputy Commissioner, Koderma under Section 14 (2) of the SARFAESI Act, 2002 and it is only thereafter, the petitioner has obtaine
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