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Judgment
The petitioner before this Court is a company registered under the Companies Act, 1956. It had admittedly taken loan from the State Bank of India, SME Branch, Ranipur, Haridwar in the year 2010-11, for setting up a textile industry at Haridwar. During the course of time, its account has been declared as a non-performing assets (NPA) and subsequently, the Bank has initiated proceedings for realization of the amount under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (from hereinafter referred to as " SARFAESI Act "). Aggrieved by the proceedings initiated by the Bank, the petitioners have preferred the present writ petition before this Court.
As of now, after completion of the proceedings under Section 13 of the SARFAESI Act, the Bank moved an application before the concerned District Magistrate under Section 14 of the SARFAESI Act for taking physical possession of the secured assets of the petitioner, which is the plant, machinery and the land. Ultimately, on 10.10.2016 the District Magistrate, Haridwar passed an order directing the respondent Bank to take the possession of the secured assets of the petitioners. The Bank has by now taken the possession of the secured assets of the petitioner and as per the counsel for the Bank, the property is to be auctioned on 08.05.2017 by way of e-auction. The total liability against the petitioner as on date,
according to the Bank, is presently around `65 crore (Rupees Sixty Five Crore Only).
Learned counsel for the petitioners on the other hand would plead that the factory was fully functional but till the possession of the property has been taken away from them. In order to show their bona fide, the petitioners have also come before the Court for an offer of `2.50 crore (Rupees Two Crore and Fifty Lakh Only) to the Bank, which the Bank has declined.
On merits the learned counsel for the petitioner would argue that the affidavit, which has been given by the Bank under Section 14 of the SARFAESI Act giving particulars such as aggregate amount of financial assets and that the borrowers has committed default in financial assistance etc., in an affidavit are false and can be proved from records. The contention of the petitioner would be that it is an order in which the District Magistrate has not applied its mind, as provided under the proviso of Section 14(1) of the SARFAESI Act, though the proviso says that the District Magistrate "shall after satisfying the contents of the affidavit pass suitable orders."
Order of the District Magistrate, Haridwar dated 10.10.2017 has been perused. It has been contended by the petitioner that it is a telegraphic order which does not reflect that there was any satisfaction of the contents of the affidavit by the District Magistrate, as is required under Section 14 of the SARFAESI Act. Learned counsel for the petitioners further states that the Bank by not follow the procedure laid down under Section 13 of the SARFAESI Act.
All the same, considering the fact that the petitioner has an alternative remedy to file an appeal before the Debts
Recovery Tribunal, he has a statutory remedy available before him.
Considering the fact that the property is to be auctioned on 08.05.2017, it is directed that for a period of one month, i.e. till 02.06.2017 the auction proceedings shall be kept in abeyance so that the petitioner may avail his remedy, provided the petitioner deposits the amount with the Bank towards advertisement cost/charges, already undergone for this auction on May 8, 2017, within seven days from today. It is further made clear that the petitioner shall approach the Manager of the concerned Bank/Branch within a period of three days from today, who shall provide the details as to the expenses incurred by the Bank for the advertisement, which shall be paid by the petitioner, failing which the auction shall go on.
With the aforesaid directions, the writ petition stands disposed.
Let a certified copy of this order be supplied to the concerned parties within 24 hours on the payment of usual charges.