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IN THE HIGH COURT OF MADHYA PRADESH
(DIVISION BENCH)
Hemant Gupta, C.J. and Vijay Kumar Shukla, J.
Sunil Garg v. Bank of Baroda and others
Writ Petition No. 19028 of 2017 (Jabalpur);
Decided on 16.4.2018
(2) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- Ss.14, 13 (4) and 17 -- District Magistrate hands over possession to secured creditor u/s. 14 -- it is possession contemplated u/s. 13 (4) -- remedy against action taken by secured creditor either u/s. 13 (4) or u/s. 14, is by way of application u/s. 17 before Tribunal -- when secured creditor invokes jurisdiction of District Magistrate, it is, in fact, invoking right to take possession u/s.13(4). (2008)1 SCC 125, (2013)9 SCC 620, Civil Appeals No. 2928-2930 of 2018 decided on 19.3.2018 and (2004)4 SCC 311 followed. Writ Appeal No. 489 of 2016 (Indore Bench) decided on 21.12.2017 relied on. W. P. C. No. 1801 of 2015 decided on 6.12.2016 (CG) and Misc. Single No. 20026 of 2017 (FB) (All.) dissented from. [Paras 8 & 9
(3) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- S.14 (3) -- excludes jurisdiction of civil Court but not of Tribunal. [Para 15
(4) Interpretation of Statutes -- there has to be conjoint and harmonious construction of various provisions of statute -- if provision of Ss.13 (4), 14(3) and 17 of SARFAESI Act are read together, bar u/s. 14(3) is not in respect of remedy before Tribunal in terms of S. 17 of the Act. [Para 15
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1. The challenge in the present writ petition is to an order passed by the Debts Recovery Tribunal, Jabalpur (for brevity ‘the Tribunal’) in proceedings under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to ‘the Act’). The Tribunal dismissed an application filed under section 17 of the Act on the ground that such an application is not maintainable until actual physical possession is delivered to the secured creditor. It is the said order which is subject matter of challenge in the present writ petition. The petitioner before the Tribunal was aggrieved against an order passed by the District Magistrate, dated 3.7.2017 directing him that physical possession of the property to be delivered to the secured creditor.
2. The relevant provisions of the Act are reproduced hereunder :
“13. Enforcement of security interest. –
(1) ...........
(2) ..........
(3) ...........
(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely :
(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;
(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset :
Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt :
Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of business of the borrower which is relatable to the security for the debt.
(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor;
(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.
14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured assets.
(1) Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him–
(a) take possession of such asset and documents relating thereto; and
(b) forward such asset and documents to the secured creditor :
Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that -
(i) xx xx xx
(ii) the borrower has created security interest over various properties and that the Bank or Financial Institution is holding a valid and subsisting security interest over such properties and the claim of the Bank or Financial Institution is within the limitation period;
(iii) the borrower has created security interest over various properties giving the details of properties referred to in subclause (ii) above,
xx xx xx xx
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