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2018 Supreme(Mad) 523
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, V. BHAVANI SUBBAROYAN, JJ.
P. Sashikumar - Petitioner
Versus
Authorised Officer, State Bank of India, Chennai & Others - Respondent
W.P. No. 5386 of 2018 & WMP. Nos. 6617 & 6618 of 2018
Decided On : 09-03-2018
Important Points
Subject
Civil Law - Property Law
Act Referred
DEBTS RECOVERY TRIBUNAL ACT : S.19
DEBTS RECOVERY TRIBUNAL PROCEDURE RULES : R.7
NPA ACT : S.13(4), S.17
SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT : S.17, S.14, S.13(4), S.13(2), S.17(1), S.17(4)(a)
Headnote
SARFAESI Act - Writ Petition - Section 14, Section 17 - Summary of Acts and Sections: The court discussed the applicability of Section 14 and Section 17 of the SARFAESI Act, 2002 in the context of challenging an order appointing an Advocate Commissioner to take physical possession of a property. The court considered the effectiveness of alternative remedies and cited relevant case law to support its decision.
Fact of the Case:
The writ petition challenged an order appointing an Advocate Commissioner to take physical possession of a property and hand it over to the State Bank of India, Stressed Assets Recovery Branch, Chennai. The petitioner's property was offered as collateral security for a loan, and subsequent events led to disputes regarding the loan and possession of the property.
Finding of the Court:
The court found that the remedy under Section 17 of the SARFAESI Act, 2002 was efficacious and that there were no extraordinary circumstances to deviate from the procedure of filing an application under Section 17. The court also emphasized the availability of statutory remedies and the need to exhaust them before seeking relief through a writ petition.
Issues: The issues involved the challenge to the order under Section 14 of the SARFAESI Act, the effectiveness of alternative remedies, and the rights of tenants in the subject property.
Ratio Decidendi: The court relied on case law and statutory provisions to establish that the remedy under Section 17 of the SARFAESI Act, 2002 was effective and that there were no exceptional circumstances to warrant deviating from the prescribed procedure.
Final Decision: The writ petition was dismissed, and the petitioner was granted liberty to approach the tribunal under Section 17 of the SARFAESI Act, 2002, if so advised.
For the Petitioner:N.S. Nandakumar, Advocate.
For the Respondents:M. Elumalai, Government Advocate.
S. Manikumar, J
1. Challenge in this writ petition is to an order dated 19.01.2018 made in Crl.M.P.No.3696 of 2017 by which the learned Chief Metropolitan Magistrate, Chennai, appointed an Advocate Commissioner, to take physical possession of the property and to hand over the same to State Bank of India, Stressed Assets Recovery Branch, Chennai.
2. Short facts leading to the writ petition are that 4th respondent, is a friend of the writ petitioner. Writ petitioner and his mother offered their house property as collateral security for export loan. Loan was closed on 16.08.2013 by the 4th respondent by depositing a sum of Rs.67 Lakhs and leaving surplus credit balance of Rs.31,60,927/-.
3. Subsequently, on 19.01.2015 4th respondent seemed to have applied for a fresh loan. He had produced agreement of loan-cum-hypothecation, Guarantee Agreement and Letter of Arrangement, all dated 02.02.2015. Writ petitioner and his mother were not aware of the subsequent loan nor they were parties to the sanction of loan. They have not offered their property as collateral security for a subsequent loan. Signatures in the above said documents are forged.
4. State Bank of India, Stressed Asset Recovery Branch, Chennai has filed OA No.196 of 2017 on the file of Debts Recovery Tribunal-I, Chennai, for recovery. Petitioner has filed I.A. in Diary Nos.1069 to 1071 of 2018 on 20.02.2018 in OA.No.196 of 2017 for declaring the loan as discharged and for other reliefs. Said O.A.No.196 of 2017 is stated to be pending.
5. On 29.07.2017, bank issued e-auction sale notice. Challenging the same, S.A.No.172 of 2017, has been filed on the file of Debts Recovery Tribunal-II, Chennai. SA No.172 of 2017 has been dismissed on 26.12.2017. Further e-auction sale notice dated 15.02.2018 has been issued.
6. Being aggrieved by dismissal of S.A.No.172 of 2017, petitioner has filed AIR No.81 of 2018, before the Debts Recovery Appellate Tribunal, Chennai. Before the Appellate Forum, I.A.No.190 of 2017, has been filed for condonation of delay. Another I.A. has also been filed for waiver.
7. According to the petitioner, suppressing the fact of discharge of the earlier loan, obtained in the year 2012 and surplus amount in the account of the borrower, bank has filed Crl.M.P.No.3696 of 2017, seeking assistance for taking possession of property mortgaged as a collateral security for the first loan availed. When bank has committed fraud and forgery, petitioner has filed a complaint dated 03.02.2018 to the Commissioner of Police. As no action was taken, petitioner was constrained to file Crl.OP.No.3703 of 2018, to register the FIR, and direction was issued by this Court in Crl.M.P.No.3703 of 2018, dated 08.02.2018 to the Station House Officer, 2nd respondent therein.
8. On the above facts, Mr.N.S.Nandakumar, learned counsel for the petitioner submitted that though, the order of the learned Chief Metropolitan Magistrate, in Crl.M.P.No.3696 of 2017 dated 19.01.2018 can be challenged before the Debts Recovery Tribunal, Chennai, by way of an application under Section 17 of the SARFAESI Act, 2002, considering the above facts as to how the bank, by suppressing the above details has filed an application under Section 14 of the SARFAESI Act and obtained an order for taking physical possession with the assistance of the Station House Officer, D3-Ice House Police Station, against whom, directions have been issued by this Court in Crl.OP.No.3703 of 2018 dated 08.02.2018, writ petition be entertained under Article 226 of Constitution of India. He further submitted that there are nine tenants in occupation. According to him, bank cannot attorn the tenancy.
9. In support of the contention that a writ petition against an order made under Section 14 of the SARFAESI Act, 2002, is maintainable, learned counsel for the petitioner placed reliance on the decision of the Hon'ble Division Bench of this Court in Veena Textiles Limited, Vs. The Authorised Officer, IFCI Ltd., reported in 2014 (5) CTC 209 a
