IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
Surya Prakash Kesarwani, Jayant Banerji, JJ.
Asset Reconstruction Company India Ltd. - Petitioner
Versus
State Of U.P. And 4 Others - Respondent
Writ - C No. 6529 of 2022
Decided On : 25-05-2022
SARFAESIAct 2002 - Section 14(2) and 14(1) - Physical possession of the secured asset - Counter affidavit - duty to facilitate the delivery of possession - Petitioner is the secured creditor - Order under Section 14(1) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act - Respondent No.2. Despite repeated request of the petitioner, State- respondents have not given physical possession of secured asset in question to the petitioner. A counter affidavit has been filed on behalf of the respondent Nos.2 and 3 - Counter affidavit filed by respondents No.2 and 3, it is evident that order passed by the respondent No.2 under Section 14 of SARFAESI Act, 2002, was not complied with even after filed by respondent No.5/ borrower was dismissed by the DRT – respondent.
Finding of the Court: Prescribed time limit has passed over and District Magistrate could not handover possession of secured asset, still District Magistrate or Chief Metropolitan Magistrate, as the case may be, will be enjoined upon duty to facilitate delivery of possession at the earliest - These settled position and a clear statutory mandate, stand taken by respondents in counter affidavit is nothing but prima facie a disobedience of the legislative mandate of Government Orders as well judgments of Hon’ble Supreme Court and this Court - Respondent Nos.2 and 3 is apparently in defiance of judgments of this Court as well as direction issued by State Government from time to time particularly the aforequoted.
Result: writ petition is allowed
JUDGMENT :
1. Heard Sri K.M. Asthana, learned counsel for the petitioner and Sri B.P. Singh Kachhwah, learned standing counsel for the State-respondents.
2. On 31.03.2022, this Court passed the following order:
This writ petition has been filed praying for the following relief:
“(i) issue an appropriate writ order or direction of suitable nature, commanding the respondent Authority, the Additional District Magistrate (Fin and Rev), Gautam Budh Nagar and the Sub Divisional Magistrate Sadar, Gautam Budh Nagar to complete the process of physical possession of the immovable secured asset to the petitioner situated at House No. C-50, Sector 20, Noida, District Gautam Budh Nagar UP 201001 as per the provisions under Section 14(2) of the SARFAESI Act 2002 in compliance of the order dated 07.10.2016 passed under Section 14(1) of the Act, 2002 by the Competent Authority under the Act 2002.
(ii) Issue an appropriate writ order or direction of suitable nature, commanding the respondent no. 2, 3 & 4 to ensure actual physical possession of the immovable mortgaged property/secured asset to the petitioner under the provisions of Section 14(2) of the SARFAESI Act, 2002 without requiring to deposit amount for providing police force within a period to be specified by this Hon'ble Court.
(iii) Issue a writ order or direction of suitable nature commanding the respondent authorities to extent all administrative/police assistance in completing the process of physical possession of the immovable property/secured assets to the petitioner under Section 14 of the SARFAESI Act, 2002.”
Learned counsel for the petitioner submits that more than five years have been passed since the order under Section 14(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was passed yet the respondent nos. 1 to 4 have not yet given physical possession of the mortgaged property.
Learned Standing Counsel prays for and is granted 10 days' time to a counter affidavit.
Petitioner shall have three days, thereafter, to file a rejoinder affidavit.
Put up as a fresh case before the appropriate Bench on 15.4.2022.”
3. Undisputed facts of the present case are that the petitioner is the secured creditor. An order dated 07.10.2016 under Section 14(1) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘SARFAESI Act, 2002’) was passed by the respondent No.2. Despite repeated request of the petitioner, the State-respondents have not given physical possession of the secured asset in question to the petitioner. A counter affidavit has been filed on behalf of the respondent Nos.2 and 3. In paragraphs 12 and 17 of the counter affidavit, the respondents No.2 and 3, i.e. the Additional District Magistrate and the Sub-Divisional Magistrate, have stated as under:
The court clarified that the jurisdiction of the relevant Authority under Section 14 of the SARFAESI Act is limited to assisting a secured creditor in recovering possession of secured assets from a d....
A District Magistrate's authority under the SARFAESI Act is administrative; subsequent orders can be made to modify the officer assigned for asset possession without it being deemed functus officio.
Possession of the secured asset can be taken by the secured creditor before confirmation of sale of the secured assets as well as post confirmation of sale.
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