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IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, M.S. Sahoo, JJ.
Debasmita Samantray – Appellant
Versus
Chief Manager Cum Authorized Officer, Indian Bank, Bapuji Nagar Branch, Bhubaneswar & Ors. – Respondents
Writ Petition (C) No. 4177 of 2022
Decided On : 08-12-2022
SARFAESI Act, 2002 - Recovery Process - Quashing of Order for Physical Possession
Fact of the Case:
The petitioner, a defaulting borrower, filed a Writ Petition to quash the order for providing official assistance for the actual physical possession of the mortgaged property, which was already delivered to the Bank.
Finding of the Court:
The court found that the Writ Petition was not maintainable as the impugned order had already been implemented, and the petitioner had alternative remedies available under the SARFAESI Act, 2002.
Issues: Maintainability of the Writ Petition, Implementation of the Impugned Order, Parallel Proceedings
Ratio Decidendi: The court held that the Writ Petition to challenge the order for physical possession was not maintainable, as the order had already been implemented and the petitioner had alternative remedies under the SARFAESI Act, 2002.
Final Decision: The Writ Petition was dismissed, and the petitioner was relegated to seek her available remedies in accordance with law.
JUDGMENT
1. The petitioner is a defaulting borrower against whom recovery process under the SARFAESI Act, 2002 (for short, 'the Act, 2002') was initiated after the Housing Loan of Rs.40,75,000/- was classified as NPA on 16th August, 2019. Thereafter, the recovery proceedings have culminated into a successful auction of the mortgaged residential property on 12th August, 2021. The actual physical possession of the said mortgaged property is also stated to be taken on 15th January, 2022 by the Bank in compliance of the order dated 8th October, 2021 passed by the District Magistrate and Collector, Khurda on an application under Section 14 of the Act, 2002.
2. The present Writ Petition has been filed with the prayer for quashing the order dated 8th October, 2021 (Annexure-8) passed by the District Magistrate and Collector, Khurda whereby the order was given for providing official assistance to undertake actual physical possession.
3. At the time of hearing, learned counsel for the Bank submits firstly that a Writ Petition to challenge the order passed by the District Magistrate is not maintainable and the proper remedy is to approach the DRT under Section 17 of the Act, 2002.
Secondly, the impugned order dated 8th October, 2021 (Annexure-8) passed by the District Magistrate and Collector, Khurda stands implemented as the actual physical possession has already been delivered to the Bank with official assistance on 15th January, 2022.
Thirdly, the petitioner having already filed an S.A. No.94 of 2021 challenging the recovery process including the auction proceedings, parallel proceedings before this Court would not be maintainable.
In response, learned counsel for the petitioner is unable to refute the aforesaid factual contention raised by the learned counsel for the Bank.
4. In view of the above, we find that the present Writ Petition is liable to be dismissed.
Accordingly, the same is dismissed relegating the petitioner to seek her available remedies in accordance with law.
The availability of alternative remedies under the SARFAESI Act, 2002 and the maintainability of parallel proceedings in challenging recovery processes.
The bank's right to take actual possession of the secured asset under the SARFAESI Act, 2002 upon default by the borrower.
SARFAESI Act Section 14 order is ministerial; remedy lies before Debts Recovery Tribunal.
A secured creditor loses its rights under the SARFAESI Act upon the auction of mortgaged property, precluding further claims for possession under the same Act.
A borrower can contest possession under Section 14 of the SARFAESI Act only through appeal under Section 17 after possession is taken.
Duty of Magistrate under Section 14 of SARFAESI Act is only to ascertain whether secured assets fall within his jurisdiction and to verify from bank or financial institutions whether notice under Sec....
A writ petition is unmaintainable when an efficacious remedy exists under the SARFAESI Act.
Point of law : As per the settled law, duty of Chief Metropolitan Magistrate (CMM)/District Magistrate (DM) under Section 14 of the SARFAESI Act is only to ascertain whether the secured assets fall w....
The remedy for seeking details of the loan account was available to the petitioner by making a proper application before the DRT itself.
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