Harbhajan Singh Nagpal vs State Bank Of India And Others

Mohammad Rafiq, CJ

This writ petition has been filed by Harbhajan Singh Nagpal, challenging the notice dated 2.6.2020 issued to him under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, for short, SARFAESI Act, (Annexure P-11) and also praying for quashment of action initiated by the respondents under Section 13(4) of SARFAESI Act and the order passed by the District Magistrate, Shimla dated 5.3.2021 (Annnexure P-15) under Section 14 of the SARFAESI Act intended to take possession of the property of the petitioner included in Schedule 'C' appended to the notice to borrower dated 2.6.2020 (Annexure P-11).

The case of the petitioner is that he entered as a guarantor for respondents No.4 to 6 with regard to pre-existing loan availed by them. Respondent No.4 is a partnership firm in which respondents No.5 and 6 are its partners. Respondents No.4 to 6 were granted loan facility by respondent No.3-State Bank of India branch at Bank Square, Sector-01, Parwanoo. Respondents No.5 and 6 are real uncles of the petitioner. In the year 2008, respondents No.5 to 6, who were having good relations with petitioner being brothers of petitioner's father, approached the petitioner to extend guarantee in the loan availed by respondents No.4 to 6 from respondent No.3. Since part of the property, already mortgaged in the per-existing loan with the bank, had fallen to the share of petitioner's father under family settlement and also on account of good relations, the petitioner on above consideration entered as guarantor in the loan availed by respondents No.5 to 6. He did so considering that there was lien in favour of the bank, the property could not be transferred in the name of petitioner's father on this count. The relationship between the petitioner and respondent No.5 were normal and there was no outright compulsion to get mortgaged property transferred in the name of father of the petitioner who had mortgaged his personal property as third party collateral security.

It is further contended that when the respondents were taking steps to take possession of the entire property, the petitioner approached this Court by filing CWP No.4979 of 2021. The Court was informed of the fact that as per the loan account, the amount of Rs.1,03,16,564.34 stand due. The petitioner offered to deposit the entire amount with the Registry of this Court by way of cheque within two days. The statement of the petitioner was taken on record. Registry was directed to accept the payment through crossed cheque payable in favour of the Registrar General, H.P. High Court. This Court also directed that the deposit so made shall be subject to the final outcome of the writ petition or any further orders that may be passed by this Court. A limited prayer was made by the petitioner in that case to direct the respondent-Bank to furnish bank account so as to facilitate the settlement of their account. This Court, therefore, directed the representatives of both the parties to sit together and reconcile the account. The Corporate Centre of respondent-bank GIDC Department, Belapur, Maharashtra was directed to provide access to the respondent-Bank for obtaining statement of accounts for the year 2008 pertaining to the petitioner within two days. The aforesaid writ petition was decided by this Court on 18.11.2021 with the observations that enough indulgence has been shown to the petitioner and appropriate directions in this regard issued to the respondents to produce the documents, however, the petitioner did not appear to be satisfied even after the documents have been supplied to him. In such circumstances, the remedy of the petitioner lies elsewhere. However, liberty was reserved to the petitioner to avail the remedy as available to him.

Learned counsel for the petitioner has submitted that he has availed his remedy before the DRT-I, Chandigarh by filing application dated 26.11.2021 against the notice, now impugned in the present writ petition. Learned counsel further submitted that the petitioner has to directly approach this Court because there is no regular Presiding Officer in any one of the three DRTs i.e. DRT-I, DRT-II and DRT-III at Chandigarh and the case of the petitioner is pending before DRT-I. Initially, the Presiding Officer DRT, Jaipur was nominated to deal with the extreme urgent cases of DRT-I, however, in view of notification dated 05.10.2021 issued by the DRAT, the powers conferred upon the DRT, Jaipur to deal with the extreme urgent cases of DRT-I, Chandigarh, was withdrawn.

Learned counsel for the respondents opposed the writ petition and submitted that the Central Government in pursuance to DoP&T approval vide O.M. No.18/5/2020-EO (SM.II) dated 13. 12.2021 and in exercise of powers conferred by Section 4(1) of the Recovery of Debts and Bankruptcy Act, 1993, has entrusted additional charge of the post of Presiding Officer DRT-I, Chandigarh to Sh. Vivek Saxena, Presiding Officer, DRT-Jaipur for a period upto 31.12.2021 or till joining of a regular incumbent, or till further orders, whichever is the earliest. It is contended that this order was passed with the expectation that the newly selected Presiding Officer DRT shall in the meantime join. In any case, the petitioner has any urgency he ought to approach the Presiding Officer DRT Jaipur for appropriate relief. It is argued that the contention of the petitioner in addition to the property included in part-II(b) of Schedule 'C' of the notice dated 2.6.2020 (Annexure P-11), north side half share of Part II(a) belongs to the petitioner as per the family settlement, may not be acceptable, at this stage, because the title documents of that north side half share are still entered in the name of respondent No.5, the uncle of the petitioner. It is further submitted that the alleged family settlement is also not on record and therefore, cannot be accepted. It is submitted that even the District Magistrate, Shimla, on his own, by the order dated 6th April, 2021, stayed the further proceedings for undertaking the possession of the property till further orders and the matter is fixed for 07.01.2022. Therefore, there is no urgency for the petitioner immediately to approach this Court.

In rejoinder to the above contentions, learned counsel for the petitioner submitted that as regards the north side half share of Part II(a), the petitioner has a remedy as per Section 17 of the SARFAESI Act to approach the DRT against the measures taken by the secured creditor or his authorized representative under Section 13(4) and therefore, the petitioner cannot be left remediless particularly when he has already approached the DRT-I, Chandigarh and that the entire money which is shown outstanding in the loan account of respondents No.4 to 6 has been deposited by the petitioner to prove his bonafide.

Considering that the petitioner has already availed his remedy before the DRT-I Chandigarh and the District Magistrate had already stayed the impugned notice till further orders and that the Presiding Officer DRT Jaipur has now been authorized to take up the urgent cases filed before the DRT-I, Chandigarh and also taking note of the fact that the entire outstanding amount in the loan account of respondents No.4 to 6 is now lying deposited with the Registry of this Court, we are not persuaded to entertain the present writ petition directly. The writ petition is therefore, disposed of with liberty to the petitioner as well as to the respondents to approach DRT Jaipur for appropriate interim orders with regard to taking possession and/or auction of the mortgaged property covered by Schedule 'C' to the notice to borrower dated 2.6.2020 (Annexure P-11) and the amount of Rs.1,03,16,564.34 deposited by the petitioner with the Registry of this Court pursuant to order dated 14.09.2021, passed by this Court in CWP No.4979 of 2021, disbursement of which shall abide by the directions that may be issued by the DRT. It is expected from the DRT Jaipur to decide the application filed by either of the parties within one month from the date of filing of the application before the DRT Jaipur. However we, for the present, do not deem necessary to pass interim order in view of the order passed by the District Magistrate, Shimla.

Pending application(s), if any, also stand(s) disposed of.