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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
G.S. SANDHAWALIA, HARPREET KAUR JEEWAN, JJ.
Punjab National Bank – Petitioner
Versus
State of Punjab & Ors. – Respondents
CWP NO.21946 of 2021
Decided On : 04-05-2023
| Table of Content |
|---|
| 1. petition filed for mandamus to decide application under sarfaesi act. (Para 1 , 2 , 3) |
| 2. delay in deciding application under section 14. (Para 4 , 5) |
| 3. duties and powers of district magistrate under section 14 of the act. (Para 6 , 7 , 8 , 9 , 10 , 11) |
| 4. directives to pass order within specified time. (Para 12) |
| 5. disposal of petition and miscellaneous applications. (Para 13 , 14) |
JUDGMENT
Harpreet Kaur Jeewan, J. - The present writ petition has been filed under Article 226/227 of the Constitution of India for issuance of a writ in the nature of 'mandamus' directing the Additional District Magistrate, Khanna (respondent No. 2) to decide the application dated 12.12.2019 (Annexure P- 1) under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act').
2. The claim in the petition is that respondent No. 3-M/s Ahuja Cotspin Pvt. Ltd (respondent No. 3) is the borrower and respondents No. 4 to 9 are the guarantors. The loan was sanctioned to respondent No. 3 as consortium loan and the Cash Credit Facilities were also availed by respondent No. 3. There are following outstandings against respondent No. 3.
| Sr. No. | Bank Name | Total outstandings | As on |
| 1 | Punjab National Bank, Large Corporate Branch, PNB House, 1st Floor, Industrial Area-A, Near Manju Cinema, Ludhiana (Punjab) 141003 | Rs. 48,90,08,887.90/- | 31.07.2019 |
| 2 | State Bank of India, Stressed Assets Management Branch, Civil Lines, Ludhiana | Rs. 75,66,85,588.44/- | 28.05.2019 |
| 3 | Central Bank of India, C-145, Bindra Complex, Phase V, Focal Point, Ludhiana | Rs. 24,21,64,320.89 | 29.05.2019 |
| 4 | United Bank of India, 202, Sai Tower, Industrial Area-1, Ludhiana | Rs. 17,45,53,151.38 | 30.06.2019 |
| 5 | Union Bank of India, B-23/1700, Industrial Area-A Link Road, Near Cheema Chowk, Ludhiana | Rs. 13,95,31,100/- | 31.08.2019 |
| 6 | Punjab National Bank & e-United Bank of India | Rs. 97,69,45,749.53 | 31.08.2021 |
3. The Punjab National Bank is a secured creditor and the account of respondent No. 3 was classified as NPA on 31.07.2019 by the Punjab National Bank. Thereafter, notice under Section 13 (2) of the Act was issued on 05.08.2019 (Annexure P-2), demanding the outstanding dues. The symbolic possession of the property was taken on 09.12.2019 and thereafter, the petitioner-Bank filed an application dated 12.12.2019 (Annexure P-1) under Section 14 of the Act before respondent No. 2 seeking possession of various movable and immovable properties owned by respondent No. 2.
4. The learned counsel for the petitioner submitted that respondent No. 2 has been adjourning the matter time and again without recording any reasons and no order has been passed on the said application, whereas an application under Section 14 of the Act is required to be expeditiously decided within 60 days.
5. Respondent No. 2 filed a short reply wherein it was submitted that notice of the application under Section 14 of the Act was given to respondent No. 3. However, in the meantime, the lockdown/curfew was imposed w.e.f. 22.03.2020 due to COVID-19, as such effective proceedings could not be conducted. On 23.02.2021 neither the applicant-Bank nor the respondent appeared. Therefore, the proceedings were further adjourned. On 23.03.2021, respondent No. 3 filed written objections to the application under Section 14 of the Act, wherein it was mentioned that wrong 'Khasra' numbers of the secured assets are mentioned in the affidavit Annexure R-1. Mentioning of wrong 'khasra' numbers for the application would have caused issue at the time of delivery of actual possession to the secured creditors, as such the copy of the objections was supplied to the representatives of the ARC agency of the petitioner-Bank. The Bank had been taking adjournment to file reply to the said objections and the delay in execution application was only on account of lockdown d
The Court clarified the jurisdiction of the Chief Judicial Magistrate under Section 14 of the SARFAESI Act, holding that both the District Magistrate and Chief Judicial Magistrate have the jurisdicti....
The court emphasized the mandatory timeline for deciding applications under Section 14 of the SARFAESI Act to facilitate timely recovery of secured assets, indicating any undue delay undermines the o....
The time limit under Section 14 of the Act is directory; failure to act within stipulated time does not render the authority functus officio, emphasizing timely recovery for creditors.
Remedy under Section 14 of the Act is not rendered redundant if the District Magistrate is unable to handover the possession. The District Magistrate will still be enjoined upon, the duty to facilita....
The District Magistrate's role under Section 14 of the SARFAESI Act is ministerial, requiring prompt action without adjudicating disputes between parties.
District Magistrate's role under S.14 of the SARFAESI Act is purely administrative with no adjudicatory powers, upholding the law's constitutionality and confirming the permissibility of judicial rev....
The SARFAESI Act, 2002 mandates that applications under Section 14 must be disposed of expeditiously without requiring notice to borrowers, as the process is ministerial and non-adjudicatory.
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