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2025 Supreme(Online)(GAU) 944
HIGH COURT OF GAUHATI
MR. JUSTICE MANISH CHOUDHURY, J
UCO BANK AND ANR – Appellant
Versus
STATE OF ASSAM AND 3 ORS – Respondent
WP(C) / 164 / 2025
MR. S CHAMARIA, MR A N SARMAH, MR M M ZAMAN; GA, ASSAM, MS N B KAYASTHA(R-4), MR. R DUBEY(R-4), MR. A N I HUSSAIN (R-4), MS. A B KAYASTHA(R-4)
The powers of the District Magistrate under the SARFAESI Act are ministerial and do not involve adjudicatory processes.
Headnote:(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2) and 14 - Proceedings initiated against borrower for defaults leading to non-performing asset status - Application for physical possession of secured assets including a sixth floor of a building - Court found that physical possession of sixth floor was not included in prior applications or orders and thus denied the petitioner's request. (Paras 10, 11, 14)
(B) Ministerial Acts - Powers of District Magistrate under SARFAESI Act are ministerial and do not involve adjudicatory processes. (Paras 14)
Facts of the case:
The petitioners, a nationalized bank and its authorized officer, sought to take physical possession of a sixth floor of a building mortgaged by the borrower after declaring the loan account as non-performing. The sixth floor was not included in prior orders or notices regarding possession.
Findings of Court:
The court determined that the application for the sixth floor was not supported by previous notices and orders, thus declining to direct the District Magistrate to act on the new application.
Issues: Whether the sixth floor was included in the earlier orders for possession and whether the District Magistrate could be directed to act on the new application.
Ratio Decidendi: The court held that the petitioner bank's failure to include the sixth floor in previous applications meant that the District Magistrate's powers were limited to the properties explicitly mentioned, and thus no further action could be directed.
Result: Writ petition not entertained.
ORDER :
Heard Mr. S. Chamaria, learned counsel for the petitioners; Mr. N. Goswami, learned Junior Government Advocate, Assam for the respondent nos. 2 & 3; and Mr. R. Dubey, learned counsel appearing on behalf of the respondent no. 4.
2. The petitioner no. 1 is a nationalized bank [‘the petitioner Bank’, for short] and the petitioner no. 2 is the Authorized Officer of the petitioner Bank, who is authorized to take steps in respect of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [‘the SARFAESI Act’, for short].
3. In this writ petition, the petitioners have stated that proceedings have been initiated against the respondent no. 4 under the SARFAESI Act due to defaults committed by the respondent no. 4 as the borrower of the petitioner Bank in respect of financial facilities extended to the respondent no. 4, after declaring the loan account of the respondent no. 4-borrower as non-performing asset [NPA]. The petitioners have stated that one of the landed properties of the respondent no. 4 in respect of which equitable mortgage has been created is ‘3.36 are of land under Dag no. 409 & K.P. Patta no. 45 at Sahar – Guwahati, 4th part, Mouza – Ulubari, Guwahati and a 6-storied building’ in the name of the respondent no. 4 valued at Rs. 3 crore on 01.09.2007, as per the Sanction Letter dated 01.09.2007 for a loan amount of Rs. 15,83,000/- on interest rate @ 14.50% [Floating] with repayment period of 84 months.
4. The petitioners have stated that an application was made before the District Magistrate, Kamrup [Metro] [the respondent no. 2] on 11.12.2024 with the request to take over physical possession of the left-over landed property based on a previous Order dated 12.04.2024 passed by the respondent no. 2 under Memo no. E-110775/511. The application dated 11.12.2024 was received at the office of the respondent no. 2 on 16.12.2024. It is stated that the application is under Section 14 of the SARFAESI Act. In the said application, the description of the landed property in respect of which the physical possession is sought for is as under :-
Equitable Mortgage of an area of land measuring 3.36 are along with Basement + Ground + 5 story building construction thereon styled as Hotel RIALTO over the plot under Dag no. 409, KP Patta no.-45, situated at Revenue village – Sahar Guwahati, Part – IV under Mouza – Ulubari at Panbazar, P.S.- Panbazar within Sub-Registrar’s Office Guwahati, Dist- Kamrup [M], Assam standing in the name of Mr. Ramen Deka vide Deed No. 9269/2003 dt 05/11/2003 and corresponding Jamabandi dated 07/02/2017.
5. It is mentioned that when physical possession of the landed property was taken over on 10.07.2024, all the rooms, kitchen and lobby of the RCC Building, wherefrom a hotel named Hotel Rialto was run, had been sealed, except the sixth floor of the RCC Building. It is mentioned that the sixth floor was not sealed at that time at the request of the borrower.
6. It is submitted by the learned counsel for the petitioners that the application dated 11.12.2024 has been submitted for taking physical possession of the sixth floor of the RCC Building.
7. It may be stated that the petitioner Bank, on an earlier occasion on 30.03.2024, preferred an application under Section 14 of the SARFAESI Act before the District Magistrate [the respondent no. 2] to take physical possession of secured assets, indicated in the said application. On the basis of the said application dated 30.03.2024, the respondent no. 2 in exercise of the power under Section 14 of the SARFAESI Act passed an Order under Memo no. E- 110775/51 dated 12.04.2024 in respect of the following Schedule or Properties :
Equitable mortgage of an area of land measuring 3.36 are along with a Basement+Ground+5 story RCC building construction thereon styled as Hotel RIALTO over the plot under Dag No. 409, K.P. Patta no. 45, situated at Revenue Village – Sahar Guwahati Part-IV under Mouza – Ulubari at Panba
