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2023 Supreme(Online)(ALL) 5850
ALLAHABAD HIGH COURT
,
SURAJ KUMAR SINGH AND ANOTHER – Appellant
Versus
State – Respondent
WRIC/23994/2022
The secured creditor/bank is obligated to bear the costs and expenses incurred by the police department in providing police force to assist in taking physical possession of secured assets under Section 14 of the SARFAESI Act, 2002, which can be recovered from the borrower.
Headnote:
[KEYWORD] - [SUBJECT] - [SUMMARY]
Fact of the Case:
The present case involves three connected writ petitions filed by petitioners, including auction purchasers and banking institutions, challenging the demand for charges by the police department for providing police force to assist in taking physical possession of secured assets under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002). The petitioners dispute the charges for police force and other incidental expenses demanded by the District Magistrate/Additional City Magistrate/Additional District Magistrate (Finance and Revenue), the Superintendent of Police, and other police officers.
Finding of the Court:
The Court held that the secured creditor/bank is under an obligation to deposit the costs/expenses demanded by the DM/CMM/Authorised Officer for the use of police force at the time of demand, which it may in turn be realised/recoverable from the borrower. The Court further clarified that the concerned officer authorized to take action under Section 14 of the Act' 2002 is required to take a decision in a time-bound manner to ensure compliance with the provision of Section 14 (1) of the Act' 2003 and there shall be no delay or slackness on his part in discharge of his duties/obligation under the Act.
Issues: 1. Whether the police department can demand charges for providing police force to assist in taking physical possession of secured assets under Section 14 of the SARFAESI Act, 2002?2. If so, who is responsible for bearing the costs of such charges?
Ratio Decidendi: 1. The Court interpreted Section 14 of the SARFAESI Act, 2002, and held that it empowers the DM/CMM/Authorized Officer to take such steps as may be necessary to aid the bank in taking possession of the secured assets, but it does not mandate the provision of police force free of cost.2. The Court relied on Section 13 of the Police Act, 1861, and the U.P. Police Regulations to conclude that police force required for any purpose other than maintaining law and order, on the request of a private person or corporation, has to be provided on payment of expenses or charges.3. The Court further held that the secured creditor/bank is not the local government or any department of the State or Central Government and, therefore, cannot claim exclusion from the requirement to pay charges for police force under Para 198 of the Police Regulations.
Final Decision: The writ petitions were disposed of with the direction that the CMM/DM/Authorized Officer shall coordinate with the Senior Superintendent of Police/Superintendent of Police to compute the cost of use of police force, as may be necessary, for the purpose of securing compliance with the provision of sub-section (1) of Section 14. The costs so computed shall be duly communicated to the secured creditor by the CMM/DM/Authorized Officer, and on the deposit of the said costs/expenses in the concerned treasury by the secured creditor, such force shall be provided by the SSP/SP of the police concerned immediately.
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Reserved
Court No. - 39
Case :- WRIT - C No. - 23994 of 2022
Petitioner :- Suraj Kumar Singh And Another
Respondent :- State Of U.P. And 3 Others
Counsel for Petitioner :- Dhiraj Singh
Counsel for Respondent :- C.S.C.,Krishna Mohan Asthana
Alongwith
Case :- WRIT - C No. - 10306 of 2022
Petitioner :- Union Bank Of India
Respondent :- State Of U P And 8 Others
Counsel for Petitioner :- Prashant Kumar Pandey
Counsel for Respondent :- C.S.C.
Alongwith
Case :- WRIT - C No. - 36964 of 2022
Petitioner :- State Bank Of India
Respondent :- State Of U.P. And 6 Others
Counsel for Petitioner :- Vivek Mishra
Counsel for Respondent :- C.S.C.
Hon'ble Mrs. Sunita Agarwal,J.
Hon'ble Vipin Chandra Dixit,J.
1.
Heard Sri Krishna Mohan Asthana, learned counsel
appearing for the Bank, Sri Dhiraj Singh learned counsel has
put in appearance on behalf of the borrower, Ms. Smriti Gupta,
Advocate holding brief of Sri Prashant Kumar Pandey learned
counsel for the petitioner appearing in the connected matter, Sri
Nimai Das, learned Additional Chief Standing Counsel and Sri
Apurva Hajela learned Standing Counsel for the State
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respondents, on the issue of the charges demanded by the police
department for providing police force to hand over the physical
possession of the secured asset to the Bank in accordance with
sub-section (2) of Section 14 of SARFAESI Act, 2002.
2.
Short question arises for consideration in three
connected writ petitions is with regard to the demand of charges
for the use of police force by the police department as
communicated by the District Magistrate/Additional City
Magistrate/Additional District Magistrate (Finance and
Revenue), for the purpose of taking physical possession of the
secured asset, to forward the same to the secured creditor/bank
under Section 14 of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act,
2002 (hereinafter referred as SARFAESI Act, 2002). The
petitioners in this group of writ petitions are the auction
purchasers and the banking institutions who are seeking writ of
mandamus commanding the State authorities namely the
District Magistrate or the Authorized Officer, as the case may
be, to provide assistance in taking physical possession of
secured assets by providing police protection under Section 14
of the SARFAESI ACT' 2002. The petitioner are disputing the
charges for the use of police force and other incidental charges,
as demanded by the District Magistrate/Authorized Officer, the
Superintendent of Police for taking appropriate steps under
Section 14 (2) of the SARFAESI ACT' 2002.
3.
In the counter affidavit filed on behalf of the Senior
Superintendent of Police, Agra and the Superintendent of
Police, Agra in one of the connected writ petition No.10306 of
2002, a categorical stand has been taken on a letter of request
dated 04.10.2021 written by the petitioner bank therein to the
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Senior Superintendent of Police, Agra requesting to provide
necessary police force in order to maintain law and order
situation that requisite expenses for providing police force has
to be deposited by the Secured Creditor/Bank. A report was
sought therein by the S.S.P. Agra vide his letter dated
12.10.2021 from the In-charge Inspector, Police Station, New
Agra, Agra and the bank was informed on 11.11.2021 to
deposit necessary expenses in the treasury for providing police
force. The petitioner bank therein, however, did not deposit the
requisite money for providing necessary police force, as a result
of which, the order under Section 14 could not be complied
with. The respondent Nos.6 and 7, the officers of the police
department have asserted that on the demand of police force by
government, semi government, personal, community
institutions, commercial institutions, bank, body, etc, under
Para 198 of the Police Regulation and Section 13 of the Police
Act' 18
