HIGH COURT OF JAMMU & KASHMIR AND LADAKH

AT SRINAGAR

WP(C) No.1515/2023

Reserved on: 15.06.2023

Pronounced on: 26.06.2023

M/s Ablum Electrical Industries through its

Proprietor Hashim Raza (aged 36years) S/o

Nissar Hussain Mir R/o Khanda-Chadoora

(Budgam).

…Petitioner.

Through:

Mr. ShaqirHaqani, Advocate.

Vs.

1. Authorised Officer, Cluster Head, J&K Bank,

Pulwama.

2. Jammu and Kashmir Bank Ltd., Corporate

Headquarters, M.A. Road, Srinagar through its

Secretary.

3. Chief Judicial Magistrate, Budgam.

….Respondents.

Through:

Mr. Z. A. Shah, Sr. Advocate, with

Mr. A. Hanan, Advocate.

CORAM:

HON’BLE THE CHIEF JUSTICE

HON’BLE MS. JUSTICE MOKSHA KHAJURIA KAZMI, JUDGE

J U D G M E N T

(N. Kotiswar Singh, CJ)

1.

The writ petition involves a seminal question of law as to whether

this Court in exercise of the writ jurisdiction under Article 226 of the

Constitution of India can intervene in a proceeding challenging an order

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passed by the Chief Judicial Magistrate under Section 14 of the

Securitization and Reconstruction of Financial Assets and Enforcement

of Security Interest Act 2002, (for short SARFAESI Act).

Background

2.

An order was passed on 30.05.2023 by the Chief Judicial

Magistrate, Budgam under Section 14 of the SARFAESI Act at the

instance of the respondent J&K Bank, by which the Sub Divisional

Magistrate, Chandoora, was authorised to take possession of the

mortgaged properties of the petitioner firm.

3.

The legal contestation embarked upon by the petitioner is

primarily based on the ground that mandatory provisions under Section

13(3-A) read with Section 14 of the SARFAESI Act had not been

complied with by the respondent Bank at the time of filing the

application by the Bank seeking assistance of the Bank under Section 14

of the Act, on the basis of which the Chief Judicial Magistrate (CJM)

passed the impugned orderunder Section 14.

It has been submitted that the order passed by the CJM suffers

from the fatal defect of non-compliance with the mandatory

statutoryprovision of the Act and as such, theorder of the CJM cannot be

sustained in law, deserving interference from this Court.

4.

Considering that the issue raised is primarily legal in nature, it

may not be necessary to refer in detail to the background facts, except

for the bare minimum as may be relevant.

It would perhaps suffice for our purpose to mention that the

petitioner firm had obtained a cash credit facility with the limit of ₹6.00

crores from the respondent Bankfor running its business at Lassipora in

connection with which an amount of ₹59,821,376.66 became

outstanding against the petitioner as on 13.12.2022. The said loan

amount was secured by the petitioner by mortgaginglands, possession

for which by the Respondent Bank, the CJM passed the aforesaid

impugned order under Section 14 of the SARFAESI Act at the instance

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of the respondent Bank, on failure of the petitioner to discharge the

liability.

Contentions of the petitioner:

5.

The main contention of the petitioner before us is that the

respondent Bank could not have approached the CJM seeking an order

for possession under Section 14 of the SARFAESI Act without

following the mandatory requirements stipulated under Section 13(3-A)

and Section 14 of the SARFAESI Act.

6.

It is the case of the petitioner that in the present case, while the

respondent Bank submitted an application before the CJM, Budgam, the

said application was not accompanied by an affidavit containing the

correct facts and information as required under sub-section (1) of

Section 14 of the Act, rather, the affidavit contained false information.

7.

It has been submitted on behalf of the petitioner that in the said

affidavit it was required to be mentioned that the borrower had

committed default in payment of the financial assistance because of

which the account of the borrower has been classifie