IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD (LUCKNOW)
RAJAN ROY, MANISH KUMAR, JJ.
Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager – Appellant
Versus
Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services And 6 Others – Respondents
Writ C No. 2119 of 2023
Decided on : 07-04-2023
Constitution of India,1950- Article 226 - SARFAESI Act, 2002 - Section 17 - Transfer of Property Act, 1882 - Section 65A and 111 - SARFAESI Act, 2002 – Section 13 and 14 – SARFAESI Act, 2002 - Section 17 - Lease - Rent - Petitioner's counsel in nutshell was that petitioner was lessee of secured asset and that a lease was executed by borrower in favour of petitioner much prior to mortgage of said property by him with opposite party No. 4-Bank - Lease being registered and same not having been determined as per provisions of Section 111 of Transfer of Property Act, 1882, Bank erred in proceeding under Section under Section 13 of SARFAESI Act, 2002 in respect of said asset and District Magistrate also erred in passing an order.
Finding of Court : In view of above discussions, it cannot be said that petitioner does not have a remedy under Section 17 of SARFAESI Act, 2002- Legal position is very well settled by a catena of decisions of Hon'ble Supreme Court that in such matters, considering object behind SARFAESI Act, 2002, High Court would not be justified in entertaining a writ petition directly under Article 226 of Constitution of India challenging an order under Section 14 of SARFAESI Act, 2002 as remedy is under Section 17 of SARFAESI Act, 2002 – Court see no reason to entertain this writ petition at this stage under Article 226 of Constitution of India.
Result : Writ petition dismissed
JUDGMENT :
Rajan Roy, J.
1. Heard Ms. Aprajita Bansal, learned counsel for the petitioner, learned Additional Chief Standing Counsel for the State and learned Alok Saxena, learned counsel for the opposite party no. 4.
2. By means of this writ petition the petitioner-Hindustan Petroleum Corporation Ltd. has challenged an order dated 09.08.2021 passed by the District Magistrate, Sitapur in Case No. 00745 of 2021; State Bank of India Vs. M/s Shiv Geet Sales Pvt. Ltd. under Section 14 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the SARFAESI Act, 2002').
3. The contention of the petitioner's counsel in nutshell was that the petitioner was the lessee of the secured asset and that a lease was executed by the borrower in favour of the petitioner much prior to mortgage of the said property by him with the opposite party No. 4-Bank. The lease being registered and the same not having been determined as per the provisions of Section 111 of the Transfer of Property Act, 1882, the Bank erred in proceeding under Section under Section 13 of the SARFAESI Act, 2002 in respect of the said asset and the District Magistrate also erred in passing an order under Section 14 of the SARFAESI Act, 2002 without hearing the petitioner. The submission is that this action is in gross violation of the law declared by Hon'ble the Supreme Court in the Case of Harshad Govardhan Sondagar Vs. International Assets Reconstruction Company Limited and Ors. reported in (2014) 6 SCC 1 and subsequent decision in the case of Bajrang Shyamsunder Agarwal Vs. Central Bank of India and Another reported in (2019) 9 SCC 94.
4. Learned counsel for the Bank on the other hand submitted that the petitioner has a remedy under Sub-section (1) and (4A) of Section 17 of the SARFAESI Act, 2002, therefore, in view of catena of decisions on the subject right from the case of United Bank of India Vs. Satyawati Tandon and Ors. reported in (2010) 8 SCC 110; Kanaiyalal Lalchand Sachdev and Ors. Vs. State of Maharashtra and Ors. reported in (2011) 2 SCC 782, a recent decision rendered by Hon'ble the Supreme Court in SLP Nos. 13241-13242 of 2019; Kotak Mahindra Bank Limited Vs. Dilip Bhosale and in the case of Phoenix Arc Private Limited Vs. Vishwa Bharati Vidya Mandir and Ors. reported in (2022) 5 SCC 345, this writ petition is not maintainable.5. This apart, he submitted that the lease in question has been terminated vide notice dated 03.06.2021, which, the petitioner itself has annexed as Annexure No. 3 to the writ petition, according to which, three months notice was given to the petitioner w.e.f. 07.06.2021 and after expiry of which, the lease dated 13.10.2003 shall stand determined/terminated and the petitioner was further asked to deposit lease rent of three months as agreed in terms of the lease dated 13.10.2003. Based on it, he submitted that period of notice expired on 06.09.2021 on which date the lease stood determined. In response, learned counsel for the petitioner submitted that this determination of lease, as alleged, if at all, took place after passing of the impugned order on 09.08.2021, therefore, this is not a material fact for the purposes of adjudicating the validity of the impugned action of the District Magistrate under Section 14 of the SARFAESI Act, 2002. She also contended that the petitioner is in possession of the land in question, therefore, it is gravely prejudiced by the impugned order. She also submitted that no doubt the Debt Recovery Tribunal has the power to restore possession in proceedings under Section 17(2) of the SARFAESI Act, 2002, but, it would be highly unreasonable to first dispossess lessee of the land in question and thereafter to order repossession thereof. She also submitted that in view of the apparent facts of the case remedy under Section 17(1) of the SARFAESI Act, 2002 is not available to the petitioner. In this regard she relies upon the decisions referred by
Bajrang Shyamsunder Agarwal Vs. Central Bank of India and Another reported in (2019) 9 SCC 94
Kanaiyalal Lalchand Sachdev and Ors. Vs. State of Maharashtra and Ors. reported in (2011) 2 SCC 782
Phoenix Arc Private Limited Vs. Vishwa Bharati Vidya Mandir and Ors. reported in (2022) 5 SCC 345
United Bank of India Vs. Satyawati Tandon and Ors. reported in (2010) 8 SCC 110
Point of Law : Nature of powers to be exercised by learned Chief Metropolitan Magistrate/learned District Magistrate, High Court in impugned judgment and order has rightly observed and held that powe....
(1) Possession of secured asset – Powers exercisable by CMM/DM under Section 14 of SARFAESI Act are ministerial step – Section 14 of SARFAESI Act does not involve any adjudicatory process qua points ....
The District Magistrate's role under Section 14 of the SARFAESI Act is ministerial, requiring prompt action without adjudicating disputes between parties.
The District Magistrate's jurisdiction under Section 14 of the SARFAESI Act is limited to ascertaining whether the statements required by the secured creditor in its affidavit have been made. The Dis....
The powers under Section 14 of the SARFAESI Act are ministerial; prior notice to the borrower is not required. Remedies are limited to the Debt Recovery Tribunal following action under the Act.
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....
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