Rajesh Kumar Singh vs State Of Jharkhand And Ors

The present writ petition has been filed for quashing notice dated 26.09.2018 (Annexure-4 to the writ petition) issued under Section 13(4) of the

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI

Act, 2002â€) r/w Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as “the Rules, 2002â€) by which the

respondent no. 3 â€" ICICI Bank Ltd. has taken symbolic possession of the immovable property pertaining to Flat No. B-8, 2nd Floor, Chandra

Tower, Dimna Road, Jamshedpur.

The learned counsel for the petitioner submits that the aforesaid property was initially purchased by one Sanjiv Kumar Vig (the borrower) from M/s

Chandra Awas Pvt. Ltd. vide registered sale deed dated 02.04.2009 for a value of Rs. 8,33,940/- and came in possession of the said property. The

petitioner purchased the said property from Sanjiv Kumar Vig vide registered sale deed dated 29.12.2012. The petitioner also took housing loan for the

purchase of the said property from Canara Bank which was granted to him vide sanction letter no. 21 dated 27.12.2012. To the utter surprise of the

petitioner, the impugned notice dated 26.09.2018 under Section 13(4) of the SARFAESI Act, 2002 r/w Rule 8(1) of the Rules, 2002 was issued by the

respondent no. 3 for taking symbolic possession of the said property. The petitioner was not aware that there was any encumbrance on the said

property. In fact, he has been made to suffer due to the evil design of said Sanjiv Kumar Vig. Since the petitioner was neither the borrower nor the

guarantor of the loan amounting to Rs. 26,92,257/- for recovery of which the impugned steps have been taken by the respondent-Bank, he has filed

the present writ petition challenging the impugned notice dated 26.09.2018.

The Hon’ble Supreme Court in the case of “United Bank of India Vs. Satyawati Tondon & Ors.†reported in (2010) 8 SCC 110, has held

as under:

“42. There is another reason why the impugned order should be set aside. If Respondent 1 had any tangible grievance against the notice

issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section

17(1). The expression “any person†used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the

guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the

Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed

time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and

effective.â€​

It is thus evident from the aforesaid judgment that the expression “any person†used in Section 17(1) of the SARFAESI Act, 2002 is of wide

implication and the same includes not only the borrower, but also the guarantor or any other person who may be affected by the action taken under

Section 13(4) or Section 14 of the SARFAESI Act, 2002. Thus, the Debts Recovery Tribunal (DRT) or the Debts Recovery Appellate Tribunal

(DRAT) are duly empowered to entertain the application/appeal filed under Section 17 and 18 of the SARFAESI Act, 2002 respectively including

passing of the interim orders and to decide the dispute within a fixed period. It has thus been settled that the remedy under Section 17 of the

SARFAESI Act, 2002 is available to any aggrieved person.

Further, the Hon’ble Supreme Court in the case of “Standard Charted Bank Vs. V. Noble Kumar & Ors.†reported in (2013) 9 SCC 62,0

has held as under:

“27. The “appeal†under Section 17 is available to the borrower against any measure taken under Section 13(4). Taking possession

of the secured asset is only one of the measures that can be taken by the secured creditor. Depending upon the nature of the secured asset

and the terms and conditions of the security agreement, measures other than taking the possession of the secured asset are possible under

Section 13(4). Alienating the asset either by lease or sale, etc. and appointing a person to manage the secured asset are some of those

possible measures. On the other hand, Section 14 authorises the Magistrate only to take possession of the property and forward the asset

along with the connected documents to the borrower (sic the secured creditor). Therefore, the borrower is always entitled to prefer an

“appeal†under Section 17 after the possession of the secured asset is handed over to the secured creditor. Section 13(4)(a) declares

that the secured creditor may take possession of the secured assets. It does not specify whether such a possession is to be obtained directly

by the secured creditor or by resorting to the procedure under Section 14. We are of the opinion that by whatever manner the secured

creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of

the possession of a secured asset is always a measure against which a remedy under Section 17 is available.â€​

So far as invoking the writ jurisdiction in the matter of realization of loan by the financial institution/secured creditors are concerned, the

Hon’ble Supreme Court in the case of “Authorized Officer, State Bank of Travancore & Anr. Vs. Mathew K.C.†reported in (2018) 3 SCC

85 has held as under:

“16. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when

the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly

discussed after noticing the relevant law. In financial matters grant of ex-parte interim orders can have a deleterious effect and it is not

sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from

public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its

character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate

loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford

the luxury of the same. The caution required, as expressed in Satyawati Tandon (supra), has also not been kept in mind before passing the

impugned interim order:-

“46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess,

fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal

obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted

by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove

detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion

to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in

Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. v.Registrar of Trade Marks and Harbanslal Sahnia v.

Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public

interest, pass an appropriate interim order.â€​

The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special

reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to

notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently

been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined

interference.â€​

The petitioner is a third party being the subsequent purchaser of the secured asset and, therefore, he may well be treated to be “any personâ€

within the meaning of Section 17(1) of the SARFAESI Act, 2002. Thus, the petitioner has an efficacious/statutory remedy provided under the

SARFAESI Act, 2002. Hence, the writ petition is not maintainable at this stage.

The writ petition is dismissed as not maintainable. The petitioner is, however, at liberty to take appropriate recourse against the impugned notice

dated 26.09.2018 as provided under law.

I.A. No. 124 of 2020 and I.A. No. 123 of 2020 also stand dismissed.