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2012 Supreme(MP) 588
IN THE HIGH OF MADHYA PRADESH
Sujoy Paul, J.
Ram Singh v. State of M.P.
Writ Petition No. 5675 of 2012 (G);
Decided on 9.11.2012.*
Balwant Singh for petitioner; R.P. Rathi, Government Advocate for respondent No. 1/State; Praveen N. Surange for respondents No. 2 and 3.
Headnote:(1) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 --Ss. 14,17 and 31 (g)-- guarantor is liable to repay the loan taken by borrower -- section 31(g) will not apply -- appeal is entertainable by the Debts Recovery Tribunal against proceedings under section 14. (2011) 2 SCC 782 and (2010) 8 SCC 110 followed. 2007 (5) ALT 494 relied on. [Para 6
(2) Land Revenue Code, 1959 (M.P.) -- S. 17 -- appellate powers of the Collector -- can be exercised by the Additional Collector. 1988 RN 61 and 1999(1) Vidhi Bhasvar 25 relied on. [Para 6
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1. By invoking the jurisdiction of this Court under Article 226 of the Constitution, the petitioner has challenged the order Annexure P-1 dated 18.07.2012, whereby the Additional Collector by exercising powers under section 14 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after referred to “SARFAESI” Act”) passed the order against the petitioner directing him to hand over the possession to the bank, failing which the Sub Divisional Officer (SDO) is directed to take possession from the petitioner and provide it to the bank.
2. Shri Balwant Singh, learned counsel for the petitioner, submits that the provisions of the SARFAESI Act were not applicable in the present case, and therefore, petitioner cannot be relegated to avail the alternative remedy under section 17 of the SARFAESI Act. It is relevant to mention the following points raised by the petitioner in his petition:-
(i) Residential house of the petitioner was exempted from attachment and sale and, therefore, as per section 31(g) of the SARAFAESI Act, the proceedings are void ab-initio.
(ii) Under section 17 of the SARFAESI Act, the appeal can be preferred only by financial institutions and bank and such appeal cannot be filed by “any other person” (para 6.3 of writ petition).
(iii) Respondent-bank is barred by law of limitation as the proceedings for initiation recovery was filed beyond 3 years.
(iv) The bank has not followed the procedure prescribed under the Security Interest (Enforcement) Rules, 2002 and hence entire proceedings are bad in law.
(v) Respondent-bank has no power and authority to directly attach and sale the property of guarantor. It is prohibited by sections 146 and 147 of Madhya Pradesh Land Revenue Code (MPLRC).
(vi) No notice of auction is served on the petitioner under the SARFAESI Act.
(vii) No efforts are made for making recovery of dues from principal borrower M/s Prakash Oil Mills Limited and, therefore, as per AIR 1969 SC 297 (The Bank of Bihar Ltd. Vs. Dr. Damodar Prasad and another), the recovery is impermissible. AIR 2006 SCW 4925 (Ashok Mahajan Vs. State of U.P. And Ors.) is also relied upon for this purpose.
(viii) The property in question is agriculture land and hence SARFAESI Act is not applicable.
(ix) The Additional Collector/Additional District Magistrate is not Competent under section 14 of SARFAESI Act.
3. Per Contra, Shri Praveen N. Surange, learned counsel for the Bank and Shri R.P. Rathi, Government Advocate for the State, supported the order passed by the Court below.
4. In the return of the bank, it is stated that the petitioner had given his personal guarantee to repay the loan amount together with interest and other charges jointly and severally with the borrower. The petitioner had signed deed of guarantee in favour of respondent-bank and taken the liability to repay the entire loan amount together with interest with borrower. The loan account was turned bad and notice was duly served on the borrower and the petitioner/guarantor. One, such notice is filed as Annexure R-3 dated 13.03.2006, it is stated that the petitioner had received the said notice on 20.01.2009 (Annexure R-4). Another notice dated 23.04.2010 (Annexure R-5) was returned with endorsement ^^ysus ls bUdkj** refused. The notices were also duly published in two news papers “Raj Express and Nai Duniya”. Thus, it is stated that action is well within limitation. Shri Surange relied on various judgments in support of his submissions.
5. I hava heard the learned counsel for the parties and perused the record.
6. The basic question is whether SARFAESI Act is applicable on the petitioner or not. However, I deern it proper to deal with the contentions of the petitioner point wise:-
Point No. (i) The petitioner has heavily relied on section 31(g) of the SARFAESI Act. However, the burden was on the petitioner to show that the property in question was not liable to attachment or sale. There is no material on recor
