Indian Bank, Himayatnagar Branch vs State of A.P.

R. Kantha Rao, J.—This criminal petition is filed u/s 482 Cr.P.C. to quash the order dated 24.01.2013 passed by the learned 1st Additional Assistant Sessions Judge, Ranga Reddy District at L.B.Nagar in Crl.M.P. No. 42/2013 in Crl.M.P. No. 888/2012.

I have heard the learned counsel appearing for the petitioner Bank, the learned Public Prosecutor, representing the State, learned counsel appearing for respondents 2 to 5 and perused the material available on record.

Brief facts according to the petitioner Bank are that the petitioner/Indian Bank, Himayathnagar Branch advanced loan facility to the borrower viz., M/s. MBS Impex Private limited, represented by its Director Sri Sukesh Gupta. Respondents 3 to 5 stood as guarantors by executing necessary guarantee agreements. The loan advanced to the borrower was collaterally secured by mortgage of immovable properties belonging to respondents 2 to 5. Respondents 2 to 5 confirmed the mortgage by executing a registered deed of Memorandum of Deposit of Title Deeds. As the respondents failed to pay the loan borrowed, the Bank considered the said loan account as NPA as per the procedural norms and guidelines issued by the Reserve Bank of India. The petitioner Bank being a secured creditor under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "SARFAESI Act") has invoked the provisions of the SARFAESI Act and issued a demand notice to the respondents on 30.04.2012, which according to the petitioner was duly served on the respondents. The respondents even after receipt of the said notice failed to repay the outstanding dues. Thereafter, the petitioner Bank issued possession notice dated 03.09.2012. The possession notice was also said to have been served on the respondents. The petitioner Bank also filed O.A. before the Debt Recovery Tribunal, Hyderabad pursuing its remedies under the provisions of RDDB & FI Act, 1993 and the said case is pending in O.A. No. 463/2012. According to the petitioner Bank, the respondents are liable to pay the debt amount of Rs. 8,02,86,128-78 ps under OCC limit with interest thereon from 01.09.2012 and also Rs.92,44,97,034-35 ps under BG limit with interest thereon from 01.09.2012 with costs.

The petitioner Bank also approached the learned Chief Metropolitan Magistrate, Ranga Reddy at L.B.Nagar, presently presided by the learned 1st Additional Assistant Sessions Judge, Ranga Reddy at L.B.Nagar as incharge and filed Crl.M.P. No. 888/2012 u/s 14 of the SARFAESI Act to appoint an Advocate Commissioner for the purpose of demarcating and identifying the secured immovable properties with the help of a qualified surveyor and to take physical possession of the mortgaged properties and to hand over the same to the petitioner Bank. The learned 1st Additional Assistant Sessions Judge appointed an Advocate Commissioner with a direction to take physical possession of the property and to hand over the possession of the same to the petitioner Bank. Thereafter, the petitioner Bank filed Crl.M.P. No. 42/2013 seeking appointment of a Mandal Surveyor to assist the Advocate Commissioner for the purpose of identifying and demarcating the schedule immovable properties with the help of a qualified surveyor and thereafter to take possession of the same and to handover it to the Authorized Officer of the petitioner Bank. On the said petition, the learned 1st Additional Assistant Sessions Judge issued notice to respondents 2 to 5. The present criminal petition is filed questioning the action of the learned 1st Additional Assistant Sessions Judge in issuing notice to respondents 2 to 5 herein and prayed to quash the said order.

The present criminal petition is filed to examine the validity of the order passed by the learned 1st Additional Assistant Sessions Judge in issuing notice to the respondents while acting u/s 14 of the SARFAESI Act. Several judgments have been relied on by the learned counsel appearing for the petitioner Bank in support of its contention that Magistrate can exercise his power u/s 13 of the SARFAESI Act to assist the secured creditor to take possession of the secured asset, but the trial or adjudication of the dispute is not contemplated u/s 14 of the SARFAESI Act, and therefore, at the stage of hearing the application u/s 14 of the SARFAESI Act, adjudication of rights or giving notice to the borrower is not contemplated.

On the other hand, the learned counsel appearing for the respondents, apart from contending that notice could be issued, vehemently questioned the very maintainability of the criminal petition filed u/s 482 of Cr.P.C.

Obviously, the learned 1st Additional Assistant Sessions Judge, Ranga Reddy passed an order issuing notice to the respondents u/s 14 of the SARFAESI Act. The said order is challenged before this Court having taken recourse u/s 482 of Cr.P.C. The primary question requires determination therefore would be whether this Court can examine the validity of an order passed by the Magistrate u/s 14 of the SARFAESI Act in exercise of powers u/s 482 of Cr.P.C. Section 482 of Cr.P.C. reads as under:

Sec. 482: Saving of inherent powers of High Court: Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice;

Section 482 of Cr.P.C. saves inherent power which the High Court possessed. There are three circumstances under which this Court can exercise inherent jurisdiction u/s 482 of Cr.P.C. They are (i) to give effect to an order under the Code; (ii) to prevent abuse of the process of the Court, and (iii) to otherwise secure the ends of justice. This Court in exercise of powers u/s 482 Cr.P.C. cannot extend its jurisdiction to quash any order passed under any provision by a Magistrate.

Section 14(3) of the SARFAESI Act, 2002 lays down that no act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this Section shall be called in question in any Court or before any Authority. In Radhakrishnan v State of Kerala III (2009) BC 343 (DB) it was held by a Division Bench of the High Court of Kerala that the High Court, while exercising power u/s 482 of the Code of Criminal Procedure, is exercising only its inherent powers saved by that section. That power can be exercised only subject to the provisions of the Code of Criminal Procedure, and also other enactments concerning the subject matter. The Kerala High Court referred to the judgment of the Apex Court in State of Himachal Pradesh Vs. Dhanwant Singh, wherein the Supreme Court held as follows:

The only question which needs to be adjudicated is whether the High Court could have exercised power u/s 482 of the Code or Article 227 of the Constitution of India. It is to be noted that the High Court did not specifically examine whether it could exercise the powers under the aforesaid provisions, but did not do so on the ground that case for interference was not made out. Though in the light of the specific stipulation in Sec. 59(3), not only mere finality has been accorded to the order passed u/s 59(2) but the legislative mandate also further stated that "shall not be questioned in any of the Court of law", it may not be permissible to invoke Section 482 of the Code, the same cannot be an impediment to deal with the revision as one under Article 227 of the Constitution of India.

The Kerala High Court also followed the principles laid down by the Apex Court in Satya Narayan Sharma Vs. State of Rajasthan, where the Supreme Court held as follows:

Section 482 of the Code of Criminal Procedure does not provide that inherent jurisdiction can be exercised notwithstanding any other provision contained in any other enactment. Thus if an enactment contains a specific bar then inherent jurisdiction cannot be exercised to get over that bar. As has been pointed out in the cases of Madhu Limaye v State of Maharashtra, Janata Dal v. H.S.Chowdhary and Indra Sawhney v. Union of India, the inherent jurisdiction cannot be resorted to if there was a specific provision or there is an express bar of law.

The Division Bench of the High Court of Kerala ultimately reached a conclusion that the petition u/s 482 Cr.P.C. is not maintainable to question the order passed u/s 14 of the SARFAESI Act.

Further, in Kanaiyalal Lalchand Sachdev and Others Vs. State of Maharashtra and Others, the Supreme Court held that against an order passed by a Magistrate to take possession of secured asset of borrower u/s 14 of the SARFAESI Act appeal is provided to Debt Recovery Tribunal u/s 17 of the SARFAESI Act.

However, I am not inclined to examine the validity of the order passed u/s 14 of the SARFAESI Act by the learned Chief Metropolitan Magistrate, Ranga Reddy, presently presided by the learned 1st Additional Assistant Sessions Judge, Ranga Reddy. I would like to confine myself to the maintainability of the petition filed u/s 482 of Cr.P.C. against the said order. In view of the aforesaid proposition of law laid down by the Supreme Court, an order passed u/s 14 of the SARFAESI Act cannot be a subject matter of challenge in a petition u/s 482 Cr.P.C., more particularly, in view of the specific bar u/s 14 of the SARFAESI Act which excludes any Court to examine the validity or correctness of the order passed u/s 14 of the SARFAESI Act.

Though several authorities have been relied upon by the learned counsel appearing on either side, I am not referring to those decisions as I consider the present petition u/s 482 of Cr.P.C. itself is not maintainable.

For the reasons stated supra, the Criminal Petition is dismissed.