The judgment emphasizes the importance of complying with principles of natural justice in the District Magistrate's orders under Section 14 of the SARFAESI Act and highlights the discretionary jurisdiction of the Court under Article 226 of the Constitution of India in cases of violation of principles of natural justice.

JUDGMENT :

Ramesh Ranganathan, C.J.

1. Heard Sri Rajendra Dobhal, learned counsel for the appellant- Bank, Ms. Vijaya Pandey, respondent-writ petitioner-in-person, and Sri Chetan Joshi who appeared as Amicus Curiae before the learned single Judge.

2. This appeal is preferred against the interlocutory order passed by the learned single Judge in Writ Petition (M/S) No. 585 of 2020 dated 12.12.2019, whereby the learned single Judge had directed that, till the next date of listing, the effect and operation of the impugned order dated 12.12.2019, passed by the District Magistrate, Dehradun, shall remain stayed.

3. In the order under appeal, the learned single Judge noted that the District Magistrate had passed an order under Section 14(1) of the SARFAESI Act; the respondent-writ petitioner had approached the Debt Recovery Tribunal, Dehradun; the Tribunal had, by its order dated 12.07.2019, set aside the order dated 29.12.2018 passed by the District Magistrate under Section 14 of the Act, and had directed him to take a decision in the matter afresh, after following principles of natural justice, and after giving due hearing to the parties; it was contended, on behalf of the respondent-writ petitioner, that the District Magistrate had passed another order dated 25.11.2019 whereby he had stayed his earlier order dated 29.12.2018, which was set aside by the Debt Recovery Tribunal; and the District Magistrate had passed another order under Section 14 of the SARFAESI Act, on 12.12.2019 without hearing the petitioner.

4. The Debt Recovery Tribunal had, in its order dated 12.07.2019, observed that the District Magistrate had not issued any notice to the respondent-writ petitioner before passing the order under Section 14 of the SARFAESI Act; the Bank had, itself, admitted that the statutory requirement of service of prior notice of hearing to the applicant was not complied with by the District Magistrate; a Division Bench of Allahabad High Court in Kumkum Tentiwal v. State of U.P. and others (order in Writ 'C' No. 38578 of 2018 dated 11.12.2018) had held that, since the order passed under Section 14 of the SARFAESI Act is a coercive measure, the officer is bound to observe principles of natural justice while passing the order under Section 14 of the SARFAESI Act; in the present case, the order dated 29.12.2018 was passed by the District Magistrate without affording an opportunity to the applicant of being heard, and was in violation of principles of natural justice; and, therefore, the order dated 29.12.2018 passed by the District Magistrate was not sustainable and was liable to be quashed.

5. The Debt Recovery Tribunal had, therefore, directed both parties to appear before the District Magistrate on 26.08.2019, and had granted liberty to the respondent-writ petitioner to file objections she desired to file against the application filed under Section 14 of the SARFAESI Act; and the District Magistrate was directed to hear and decide the matter afresh on such objections being filed. Thereafter, the respondent-writ petitioner filed her objections before the District Magistrate on 23.11.2019. Pursuant thereto, the District Magistrate, by proceedings dated 25.11.2019, granted stay of his earlier order dated 29.12.2018, which order had already been set aside by the Tribunal. However, by subsequent proceedings dated 12.12.2019, the District Magistrate, taking note of the contentions of the Bank, vacated his earlier order dated 25.11.2019.

6. The order of the Debt Recovery Tribunal dated 12.07.2019 required the District Magistrate, on the respondent-writ petitioner filing her objections, to hear and decide the matter afresh after following principles of natural justice, and giving due hearing to the parties. The said order of the Debt Recovery Tribunal has attained finality and is, therefore, binding inter-parties. The District Magistrate was obliged, in terms of the said order, to hear and decide the matter afresh after giving due hearing to the partie