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IN THE HIGH COURT OF MADHYA PRADESH
Sushrut Arvind Dharmadhikari and Gajendra Singh, JJ.
Kusum Jagdishchandra Singh (Smt.) v. LIC Housing Finance Limited & Others
Writ Petition No. 14010 of 2024 (Indore);
Decided on 31.7.2024
(1) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- Ss. 13(4) and 17 -- word “measures” -- means series of steps that could be taken by authorized officer u/s. 13(4). [Para 10]
(2) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- S. 17 -- Court-fee -- cause of action is a bundle of facts -- Court-fee not payable on every single cause of action -- Court-fee before Tribunal is not paid on basis of valuation of every one of the prayers -- Tribunal cannot ask parties to pay Court-fee afresh on prayers added by way of amendment -- such power not traceable to statute or rules. [Para 11]
(3) Constitution of India -- Art. 226/227 -- Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- S. 18 -- maintainability of writ petition -- bar of alternative remedy -- mere availability of alternative remedy of appeal or revision would not oust jurisdiction of High Court and render writ petition not maintainable -- petitioner made out exceptional case -- pure question of law involved -- writ petition maintainable. 2023 LiveLaw (SC) 70 followed. [Para 13]
(4) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- Ss. 17 and 13 -- securitization application dismissed by Tribunal on ground of limitation -- held -- Tribunal did not properly follow provisions of Act -- relegated petitioner to file another securitization application though securitization application as well as amendment application within limitation was pending -- further auction gave continuous cause of action -- filing another securitization application for deciding issue of second auction notice is in itself unwarranted, giving rise to another round of litigation reiterating same issues though cause of action is continuous -- since Tribunal failed to deal with question regarding cause of action, matter remanded to Tribunal decide it afresh in accordance with law. 2008 SCC Online Mad. 1995 relied on. [Paras 14 & 15]
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ORDER
Dharmadhikari, J. -- 1. Heard finally with the consent of parties. The present petition under Article 226/227 of the Constitution of India has been filed assailing the order dated 16.5.2023 passed by learned Presiding Officer, Debt Recovery Tribunal, Jabalpur in S.A. No. 36/2024 (I.A. No. 196/2024) by which application for condonation of delay and consequently the securitization application itself has been dismissed on the ground of limitation.
`2. The petitioner has prayed for the following reliefs :--
“(i) Call for the records of SA No. 36/2024 and set aside the order dated 16/05/2024 passed in I A No. 196/2024 and further allow IA 1345/2024 for application for stay,
(ii) Pass an order to allow the application for condonation of delay in filing the S A No. 36/2024 under section 17 of SARFAESI Act, 2002,
(iii) Direct the DRT, Jabalpur to treat the S A No. 36/2024 having been filed within limitation and further direct to decide the SA No. 36/2024 on merits in accordance with law,
(iv) To allow the cost of this petition with any other appropriate relief(s) may kindly be granted to the petitioner and,
(v) To pass any other or further order(s) deemed fit and necessary in the facts and circumstances of the matter.”
2. Shorn of unnecessary details, in 2017 M/s Greater Kailash Hospital Pvt. Ltd. had applied for financial assistance from the respondent No. 1. The petitioner’s husband namely Late Shri Jagdishchandra Singh had established the hospital and was managed by a partnership firm to begin with and thereafter by a Private Limited company later on. The financial assistance of Rs. 40,00,00,000/- was sanctioned by the respondent No.1 to M/s Greater Kailash Hospital Pvt. Ltd. The respondent No.3 Smt. Radhika Bandi had delivered the title papers of Plots 1, 2 PWD Road and 11-A Old Palasia, Indore to the respondent No. 1. On 14.3.2017 “Declaration of Equitable Mortgage” was recorded/ registered on going through the mortgage deed the following important points are revealed.
(1) Mortgage was created by M/s Greater Kailash Hospital Pvt. Ltd.
(2) Mortgage was created by the director of M/s Greater Kailash Hospital Pvt. Ltd.
(3) The present petitioner claimed to be a director acting through her Power of Attorney respondent No. 3 Smt. Radhika Bandi.
(4) It is clear from the mortgage deed that the petitioner never created mortgage of the aforesaid properties in her personal capacity or personally.
(5) The petitioner never created/ executed any document to change the ownership of the aforesaid properties.
(6) The petitioner had never signed personal guarantee in favor of the respondent No. 1 for the loan allegedly availed by the respondent No.1 company, therefore, the petitioner is not liable personally for the alleged liability of the respondent No.2 company.
3. Since the loan account became NPA, the secured creditor initiated action on 29.12.2023 by issuing auction notice in the newspaper which was brought to the notice of the petitioner on 30.12.2023. Upon having knowledge regarding auction of the properties owned by the petitioner, she enquired and it came to surface that the respondent No. 1 has initiated action under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act, 2002”). Earlier, a recall notice dated 26.5.2018 as well as demand notice dated 19.12.2020 issued by the respondent No. 1 under section 13(2) of SARFAESI Act, 2002 was never received by the petitioner as the notices were not sent on her residential address even the demand notice dated 17.7.2021 was not received, thereafter, an application under section 14 of SARFAESI Act was issued on 8.3.2022 for taking physical possession of the alleged mortgaged property. On receipt of the statement of account, it revealed that penal interest has been levied and capitalized in the loan account.
4. On 29.12.2023, the Respondent No.2 again issued an advertis
though existence of an alternative remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution, but a writ petition can be entertained in exceptional....
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The court established that the right of redemption under the SARFAESI Act is extinguished upon the issuance of a sale certificate, and timely challenge to bank actions is essential.
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