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2020 Supreme(Mad) 1922
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M.M. SUNDRESH, R. HEMALATHA, JJ.
M/s. Tamil Nadu Mercantile Bank Ltd. – Petitioner
Versus
The District Magistrate/The District Collector, Thiruvallur – Respondent
W.P. Nos. 25192, 28047 of 2019, 24655, 29972 of 2018, 32467 of 2016, W.M.P. Nos. 20401, 24765 of 2019
Decided On : 18-09-2020
Advocate Appeared:
For the Petitioners: S. Sethuraman, F.B. Benjamin George, Om Prakash, L. Poompavai, P. Elayarajakumar.
For the Respondents: S.R. Rajagopal, G.K. Muthukumar, C. Deivasigamani, S. Seshachalam, F. Benjamin George.
Headnote:
SARFAESI Act - District Magistrate's Role in Possession of Secured Assets - Section 14
Fact of the Case:
The court disposed of multiple writ petitions filed by lenders aggrieved over the orders passed by the authority on the applications filed seeking to invoke Section 14 of the SARFAESI Act towards handing over of the physical possession of the secured assets. The court considered the issue of whether the District Magistrate is competent to go into the merits of the case such as existence of tenancy, classification of the land as agricultural land, pendency of the civil proceedings, and the locus standi to file an application after the sale is effected in favor of the third party.
Finding of the Court:
The court held that the District Magistrate's role under Section 14 of the SARFAESI Act is only to facilitate handing over of possession from the borrower to the creditor. The court emphasized that the District Magistrate is not expected to undertake an exercise beyond the scope of the Act and is not empowered to adjudicate on issues raised regarding the rights of the concerned parties. The court also noted that the District Magistrate's decision is not a quasi-judicial order but a continuation of the earlier proceedings.
Issues: The court considered the competence of the District Magistrate to go into the merits of the case, including the existence of tenancy, classification of the land as agricultural, pendency of civil proceedings, and the locus standi to file an application after the sale is effected in favor of the third party.
Ratio Decidendi: The District Magistrate's role under Section 14 of the SARFAESI Act is limited to facilitating the handing over of possession from the borrower to the creditor and does not extend to adjudicating on the rights of the concerned parties. The District Magistrate's decision is not a quasi-judicial order but a continuation of the earlier proceedings.
Final Decision: The court set aside the impugned orders and directed the District Magistrate to pass orders facilitating possession in favor of the petitioners within a period of four weeks from the date of receipt of the court's order. The court also granted liberty to the parties to challenge the said orders in the manner known to law, if so advised.
JUDGMENT :
M.M. SUNDRESH, J.
Prayer: in W.P. No. 28047 of 2019: Petition filed under Article 226 of the Constitution of India praying to issue a writ of certiorarified mandamus calling for the records pursuant to the order in Rc. No. 22708/2018/M2 dated 16.08.2019 passed by the respondent and quash the same and further direct the respondent to render assistance to the petitioner for taking physical possession of the property.
W.P. No. 24655 of 2018: Petition filed under Article 226 of the Constitution of India praying to issue a writ of certiorarified mandamus calling for the records relating to the proceedings of the 1st respondent vide No. Rc. 18302/2017/M2, culminating in her order dated 2.8.2018, quash the same and direct the 1st respondent to take possession of the property situated at Plot No. 29, No. 175/69, Ms. Jaffer Nagar, Karani Village, Thiruvallur Taluk, admeasuring to an extent of 2800 sq ft in survey no. 201 and 202 and hand over the same o the petitioner bank.
W.P. No. 25192 of 2019: Petition filed under Article 226 of the Constitution of India praying to issue a writ of Certiorarified mandamus to call for the records of the impugned proceedings in K. Dis 3423/2019/C5 dated June 2019 on the file of the respondent and to quash the said impugned order, being in derogation of the statutory provisions and decisions of the Hon'ble Supreme Court of India and consequently direct the respondent to pass appropriate order in the petitioner's application in RC No. 3423/2017 under Section 14 of the SARFAESI Act rendering necessary assistance to the petitioner to take vacant physical possession of all secured assets as set out therein. Prayer in W.P. No. 32467 of 2016: Petition filed under Article 226 of the Constitution of India praying to issue a writ of Certiorarified mandamus calling for the records pertaining to the proceedings in O.Mu.379/2016 Uu3 dated 03/03/2016 on the file of the respondent, quash the same and consequently direct the respondent to pass orders in the application dated 30.12.2015 filed under Section 14 of the SARFAESI Act appointing a suitable officer to take physical possession of the property namely Land and Building bearing door No. 1/611, Kilakku Thottam, Chettipalayam Road, Malumichampatti Village, Coimbatore in present SF No. 71/9, and 69/1A totally measuring 2 Acres and 44.25 cents with the RCC Building measuring 680 sq. ft. and RCC varandah measuring 374 sq. ft. and hand over the same to the petitioner.
W.P. No. 29972 of 2018: Petition filed under Article 226 of the Constitution of India praying to issue a writ of certiorarified mandamus calling for the records of the 1st respondent dated 22.11.2017 in Ref No. 5289/2015/E3 quash the same and consequently direct the 1st respondent to take possession of the asset covered under the said proceeding namely the land measuring 4848 Sq. Ft. with the constructed area of 4198 Sq. ft. situated at SF No. 394, 375 and 395/1 in T.S. No. 12/147/2, Ward No. 12, Old Door No. 22 A, New Door No. 12 A bearing building name “Amrit” at site No. 7, TP Scheme No. 6, Old Municipal Ward No. 88, New Municipal Ward, No. 15, Ramalinga Nagar, 4th Cross, Sanganoor Village, Coimbatore-641 011 and hand over the same to the petitioner under Section 14 of the SARFAESI Act.
1. The commonality of the issue makes us to dispose of all these writ petitions by a single order.
2. These writ petitions have been filed by the lenders aggrieved over the orders passed by the authority on the applications filed seeking to invoke Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) towards handing over of the physical possession of the secured assets.
3. In W.P. No. 29972 of 2018, the application filed by the petitioner was rejected by taking note of the criminal complaints in the form of First Information Report pending at the relevant point of time. Only the residential properties are to be taken poss
