IMPORTANT POINT
(1) Physical possession of secured asset/property – Once time specified in warrant has elapsed, possession of property in question cannot be taken over under same warrant.
(2) Physical possession of secured asset/property – Advocate Commissioner, being conferred only power, limited, of taking over physical possession by CMM under Section 14 of SARFAESI Act, has no vested right of being heard with regard to validity/life thereof.

JUDGMENT (ORAL)

Ahsanuddin Amanullah, J.—Heard Mr. T. Lakshmi Narayana, learned counsel for the petitioners and Mr. Satyanarayana Moorthy, learned counsel for the respondents – State Bank of India (hereinafter referred to as the “SBI”).

2. By the instant writ petition, the petitioners assail the action(s) taken by the SBI under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the “Act”) alleging violation of the procedure prescribed therein as well as non-conformity with The Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the “Rules”).

3. The factual matrix may first be adverted to. The petitioners obtained loan from the SBI. The account having become a Non-Performing Asset (hereinafter referred to as “NPA”), the petitioners applied for One-Time Settlement (hereinafter referred to as “OTS”), whereunder the total amount to be paid was Rs.10,36,25,840.82. The application money of Rs.52,00,000/- was paid and SBI also issued sanction letter dated 23.11.2020. Though as per the terms of OTS, the first instalment to be paid was Rs.1.04 crores by 23.12.2020, the petitioners paid only Rs.32,00,000/- on 23.12.2020. As a consequence, SBI issued letter dated 29.12.2020 informing cancellation of OTS and asking the petitioners to deposit the entire Bank dues with interest at contracted rate. The request of the petitioners by letter dated 03.01.2021 for extension of time for payment of balance amount of first instalment of Rs.72,00,000/- was rejected by the SBI vide letter dated 21.01.2021. The same is pending challenge in W.P.No.2512 of 2021, before this Court. As the petitioners had defaulted, the SBI, prior to sanctioning OTS, on 27.02.2019 had already moved before the Chief Metropolitan Magistrate (hereinafter referred to as the “CMM”), Guntur, in Crl.M.P. No.201 of 2019, under Section 14 of the Act for taking physical possession of the secured asset/property, in which the following order was made on 28.12.2020:

“The petition is filed under Section 14(1) of the SARFAESI Act to appoint an Advocate Commissioner to take possession of the petition schedule property and to deliver the possession to the petitioner bank.

Heard and perused the record.

It seems that the petitioner bank followed the procedure contemplated under the Act to proceed against the mortgaged property for realization of loan amount due to the petitioner bank. Therefore, the petition has to be allowed.

In the result, the petition is allowed. Sri K. Veera Bhaskar, Sri P. Koteswara Rao, Sri/Smt. V. Sreelatha, Sri/Smt. J. Rama Lakshmi, Advocates are appointed as Commissioners to take possession of the petition schedule property and to deliver the possession to the petitioner bank. Their fee are fixed at Rs.10,000/- each payable by the petitioner bank. The Commissioner shall issue notice to both parties and advocates on record before execution of warrant. Commissioner is at liberty to break open the schedule for execution of warrant with aid of police when ever required. Warrant returnable with Report by 15.02.2021.

Warrant shall be issued on payment of commissioner fee and process on or before on 04.01.2021.”

4. On 04.01.2021, the matter was adjourned, for payment of Commissioner fee and process, to 05.01.2021, on which date it was recorded as under:-

“Process memo and fee receipt of Commissioner are filed. Hence, issue warrant along with Police Aid to the Advocate-Commissioner. Placed before Officer as and when report is filed.”

5. Thereafter, on 17.12.2021, the Advocate Commissioners took possession of the property.

6. Learned counsel for the petitioners submitted that the order passed by the CMM was beyond 60 days of filing of the application under Section 14 of the Act, which is impermissible in view of Section 14 of the Act. It was further contended that even thereafter, as per order dated 28.12.2020 of the CMM, the warrant was to be executed latest by 15.