Back
2019 Supreme(Jhk) 1013
IN THE HIGH COURT OF JHARKHAND AT RANCHI
H.C. MISHRA, DEEPAK ROSHAN, JJ.
M/s Jamshedpur Fine Chemicals Private Limited and Another – Petitioners
Versus
Authorised Officer, Canara Bank and Others – Respondents
W.P. (C) No. 3585 of 2019
Decided On : 16-09-2019
Advocate Appeared:
For the Petitioner: Mr. Pandey Neeraj Rai.
For the Respondents: M/s. Indrajit Sinha, Suraj Singh, Niraj Kumar, Rajiv Sinha.
Headnote:
Constitution of India,1950 - Articles 14, 21 and 300A - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sub-section (8) of Section 13, 17 , 8 and 60 - Recovery of loan - Sale notice - Mortgaged property - Grant of loan - Possession notice sale notice - Respondent-Bank granted credit facilities to petitioner No. 1-company through its Director loan was secured by mortgage of immovable property - Since borrower failed to maintain financial discipline account was classified as NPA on respondent-Bank initiated proceedings for recovery of loan by issuing demand notice followed by possession notice sale notice was issued for auction of mortgaged property same could not be materialized - Second auction sale notice was issued on and published in newspapers scheduling the auction of mortgaged property– Held, There is no arbitrariness same is also not irrational and/or excessive and disproportionate – Court further hold and declare amended section 13(8) of SARFAESI Act shall also govern cases loan were granted prior to amendment, because of the obvious reason action under SARFAESI Act has nothing to do with grant of loan as cause of action is with issuance of notice SARFAESI Act, as such by no stretch of imagination it can be said present section 13 (8) of SARFAESI Act will not apply in cases loan was granted to borrower prior to the amendment and this contention of petitioner is wholly misconceived - Writ application is dismissed
JUDGMENT :
DEEPAK ROSHAN, J.
1. In the instant writ application, the petitioner has prayed for following reliefs:
(i) Striking down sub-section (8) of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘SARFAESI ACT’) to the extent it purports to limit the right of redemption of the petitioners with the issuance of notice of the public auction as being violative of Articles 14, 21 and 300A of the Constitution of India besides being arbitrary and discriminatory.
(ii) Quashing/setting aside the judgment and order dated 03.06.2019 (Annexure-18) passed in Appeal S. No. 62/2018 by Sri R.S. Kulhari, Chairperson, Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred to as ‘DRAT’) whereby and where under the order dated 22.03.2018 passed by Sri B.N. Dash, Presiding Officer, Debts Recovery Tribunal, Ranchi in S.A. No. 96/2017 (Annexure-12), allowing it, has been set aside.
(iii) Quashing/setting aside the notice dated 09.07.2019 (Annexure-19) issued in SARFAESI Case No. 4/2019-20 by the respondent Deputy Commissioner.
2. The petitioner No. 1 is Private Limited Company and petitioner No. 2 is its Director.
3. The relevant facts in brief are that the respondent-Bank granted credit facilities to the petitioner No. 1-company through its Director. The loan was secured by mortgage of immovable property. Since the borrower failed to maintain the financial discipline, the account was classified as NPA on 01.05.2016 and the respondent-Bank initiated the proceedings for recovery of loan by issuing demand notice dated 27.07.2016 followed by possession notice dated 03.11.2016. The sale notice was issued on 30.01.2017 for auction of the mortgaged property, but the same could not be materialized. However, the second auction sale notice was issued on 06.09.2017 and published in the newspapers on 11.09.2017 scheduling the auction of the mortgaged property on 27.09.2017. As a result thereof, immovable property was sold for a sum of Rs. 1,21,40,000/- and the sale certificate was duly issued on 13.10.2017 in favour of the auction purchaser who is respondent No. 2 herein.
4. Being aggrieved by e-auction notice dated 06.09.2017, the petitioners preferred an application under Section 17 of the SARFAESI Act on 12.10.2017 being S.A. No. 96 of 2017 praying inter alia that the borrowers are ready to pay the entire loan amount, the proceeding initiated vide e-auction notice dated 06.09.2017 under the SARFAESI Act is illegal, the Bank did not allow disbursal of entire loan amount and there is violation of Rule 8(1) of the SARFAESI Act as there has been no affixation of notice dated 03.11.2016 on the outer door at conspicuous place. Further, the petitioners also filed an amendment application challenging the sale and subsequently issued sale certificate in terms of e-auction notice dated 06.09.2017.
The said amendment application stood allowed by the learned DRT, Ranchi vide its order dated 18.10.2017. In the said SA, the Bank filed its objection on 30.10.2017. The learned DRT in view of the undertaking given the petitioners-Company directed the respondent-Bank to take Rs. 28 lakhs which is intended to be paid by the borrower and the Bank was directed to hold the amount, if deposited, in a ‘no lien account’ till final disposal of S.A. Accordingly, the petitioners deposited the said sum of Rs.28 lakhs before the Bank vide covering letter dated 24.10.2017. In view of aforesaid deposit made by the petitioners, the DRT vide its order dated 30.10.2017 directed for maintaining status quo. On 12.03.2018 the auction purchaser (respondent No. 2 herein) filed his objection after becoming successful in auction, in delaying the proceeding for one or the other frivolous grounds. It has been contended by the auction purchaser that the petitioners were not entitled for redemption after issuance of sale certificate in his favour by the Bank.
5. Learned counsel for the petitioners su
