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Judgment
Heard Mrs. T. Yangi. B, learned counsel for the petitioners as well as Mr. K. Paul, learned counsel for the Proforma respondent and Mr. K.C.
Gautam, learned counsel for the respondent.
The brief fact of the petitioner''s case in a nutshell is that:
The factual matrix of the instant petition is that the Proforma Respondent Smti. Silda Dkhar had taken a substantial amount of loan
from the Petitioner Bank and had mortgaged two of her landed household properties one situated at G.S. Road, Police Bazar,
Shillong covered by Plot No. 3 (1) and another situated at Kench''s Trace, Shillong as security against the loans taken by her.
The said Borrower failed and neglected to repay the outstanding dues in her Loan Account inspite of repeated reminders and the said
Loan Accounts became a Non Performing Asset (NPA)
Notices under Section 13 (2) and 13 (4) of the SARFAESI ACT, 2002 was issued by the Petitioner Bank to the defaulting
borrowers and subsequently on 08.12.2014 the petitioner Bank took symbolic possession of the said properties.
The Respondent filed a Civil Suit before the Court of the Assistant District Judge, Shillong registered as Title Suit No. 34 (H) 2014
and Misc. Case No. 31 (H) 2014 inter alia for a Decree of declaration that he is in possession of the ground floor of the property
situated at G.S. Road, Police Bazar, Shillong as a tenant in perpetuity and for permanent injunction and the Court below passed ex-
parte Order dated 14.12.2014 directed status quo to be maintained and issued notice.
On receipt of the notice from the said Court, the Petitioner Bank entered appearance and file their Show Cause in the Misc. Case
through their Counsel challenging the maintainability of the Suit/Case as the Court of the Assistant District Judge, Shillong being a Civil
Court its jurisdiction was barred under Section 34 of the SARFAESI Act.
On hearing the parties, the Court below set aside her Order allowing status quo on the ground that the Civil Court has no jurisdiction
but the Title Suit has not yet been disposed off by the said Court and thereafter the Respondent has approached the Debt Recovery
Tribunal at Guwahati who only issued notice.
The Petitioner Bank had in the meantime approached the District Magistrate, East Khasi Hills, Shillong for assistance in taking over
the physical possession of the secured assets and by Order dated 08.12.2015 the District Magistrate while allowing the application of
the Petitioner Bank also directed his ADC (Revenue)/ EAC (Revenue), Shillong to oversee the taking over of physical possession of
the secured assets and to give all necessary assistance in this regard.
The Respondent who is neither a Borrower nor a Mortgagor or a Guarantor has immediately filed an application before the Debt
Recovery Tribunal, Guwahati for stay of the said Order dated 08.12.2015 of the District Magistrate, Shillong and to restrain the
Petitioner Bank from taking over possession of the secured asset situated at G.S. Road, Police Bazar, Shillong and after hearing both
the Parties the Presiding Officer, Debt Recovery Tribunal, Guwahati in I.A. No. 177 of 2015 in S.A. No. 3 of 2015 inter alia vide
the impugned Order dated 15.12.2015 stayed the operation of the Order dated 08.12.2015 passed by the District Magistrate, East
Khasi Hills, Shillong and further restrained the Petitioner Bank from taking any action under the SARFAESI Act, 2002 for taking
physical possession of the secured asset/landed property. Therefore being aggrieved by the said impugned Order dated 15.12.2015,
the Petitioner Bank files this Petition as the Presiding Officer has acted in gross violation of the law involved and contrary to the
provisions of the SARFAESI Act and has thereby exceeded the purview and ambit of its jurisdiction and committed serious
irregularity and miscarriage of justice"".
The learned counsel for the Petitioner Bank submitted that on 07.10.2014 the petitioner Bank had issued notice under Section 13 (2) of the
SARFAESI Act, to the respondent.
On 08.12.2014 the Petitioner Bank took symbolic possession of the secured assets.
On 09.12.2014 the respondent filed Title Suit No. 31 (H) of 2014 and Misc. Case No. 64 (H) of 2014 against the petitioners.
On 11.12.2014 ex-parte Order of Status Quo was passed by the Assistant District Judge in Misc. Case No. 64 (H) 2014, fixing 22.12.2014 for
show cause and hearing of the Misc. Case.
On 22.12.2014 the Petitioner Bank entered appearance and filed show cause in the Misc. Case challenging the maintainability of the Civil Suit
being barred under Section 34 of the SARFAESI Act.
On 23.12.2014 show cause was heard by the said Court and by Order dated 27.01.2015 the said Order of Status Quo was inter alia set aside
and thereafter the Respondent approached the Debts Recovery Tribunal at Guwahati and S.A. Case No. 3 of 2015 was registered and notice was
issued.
On 08.12.2015 the District Magistrate, East Khasi Hills, Shillong passed necessary orders giving assistance to the Bank for taking over physical
possession of the secured assets.
On 10.12.2015 the respondent filed an application before the Debts Recovery Tribunal, Guwahati praying inter alia for stay of the operation of the
Order dated 08.12.2015 passed by the District Magistrate, East Khasi Hills, Shillong and restrained the Petitioner Bank from proceeding with the
recovery proceedings and taking over physical possession of the secured asset/property situated at G.S. Road, Police Bazaar, Shillong.
On 15.12.2015 impugned order was passed by the Presiding Officer, Debts Recovery Tribunal, Guwahati restraining the Petitioner Bank from
taking over physical possession of the impugned property which is in possession of the respondent till further orders and disposed of the interim
application No. 177 of 2015.
The learned counsel for the petitioner further argued that, against the order passed by the Presiding Officer, Debts Recovery Tribunal, Guwahati,
the petitioner approached this Court by way of this Civil Revision Petition challenging the impugned order dated 15.12.2015 on the ground that the
Debts Recovery Tribunal, Guwahati has no jurisdiction to stay the order passed by the District Magistrate under Section 14 sub Section 3 of the
SARFAESI Act.
In reply to the submission advanced by the learned counsel for the petitioner, Mr. K. Paul, learned counsel for the Proforma respondent
submitted that the petitioner can approach the Debts Recovery Tribunal, Guwahati only after possession of secured assets is lost and the writ
petition was dismissed. To support his submission, Mr. K. Paul, learned counsel for the Proforma respondent stated the order dated 15.12.2015
of the Debts Recovery Tribunal, Guwahati in I.A. No. 177/2015, Application No. 3/2015, annexed at page 64 of the writ petition. For ready
reference, the said order dated 15.12.2015 is reproduced herein below:
...It is also observed that in the case of M/s Mercury Exporters and Manufacturing Pvt. Ltd & another Vs. Punjab National Bank.
The Hon''ble High Court at Calcutta in Writ Petition No. 353 of 2014 relying upon the decision of Hon''ble Supreme Court in
Standard Chartered Bank vs. V. Noble Kumar, held that approach under section 17(1) of the Act by the Petitioner can be made
only after possession of secured assets is lost and Writ Petition was dismissed......
On the other hand, Mr. K.C. Gautam, learned counsel for the respondent submits that the petitioner did not follow the provision of the
SARFAESI Act strictly, and therefore, he had to approach the Debts Recovery Tribunal, Guwahati.
After hearing the submissions advanced by the learned counsel for the parties referred above and after reading of Section 14 sub Section 3, it is
a fact that, ""No act of the Chief Metropolitan Magistrate or the District Magistrate [any officer authorized by the Chief Metropolitan Magistrate or
District Magistrate] done in pursuance of this section shall be called in question in any Court or before any authority"". But, in my considered and
humble understanding, Section 14 sub Section 3 is not applicable to the High Court exercising the power under Articles 226 and 227 of the
Constitution of India.
The Hon''ble Supreme Court in the case of Harshad Govardhan Sondagar versus International Assets Reconstruction Company Limited and
others: (2014) 6 SCC 1 at Para 28 and 29 was pleased to observe that:
A reading of sub-rules (1) and (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 would show that the 5
possession notice will have to be affixed on the outer door or at the conspicuous place of the property and also published, as soon as
possible but in any case not later than seven days from the date of taking possession, in two leading newspapers, one in vernacular
language having sufficient circulation in that locality, by the authorised officer. At this stage, the lessee of an immovable property will
have notice of the secured creditor making efforts to take possession of the secured assets of the borrower. When, therefore, a
lessee becomes aware of the possession being taken by the secured creditor, in respect of the secured asset in respect of which he is
the lessee, from the possession notice which is delivered, affixed or published in subrule (1) and sub-rule (2) of Rule 8 of the Security
Interest (Enforcement) Rules, 2002, he may either surrender possession or resist the attempt of the secured creditor to take the
possession of the secured asset by producing before the authorised officer proof that he was inducted as a lessee prior to the creation
of the mortgage or that he was a lessee under the mortgagor in accordance with the provisions of Section 65-A of the Transfer of
Property Act and that the lease does not stand determined in accordance with Section 111 of the Transfer of Property Act. If the
lessee surrenders possession, the lease, even if valid, gets determined in accordance with clause (f) of Section 111 of the Transfer of
Property Act, but if he resists the attempt of the secured creditor to take possession, the authorised officer cannot evict the lessee by
force but has to file an application before the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the
SARFAESI Act and state in the affidavit accompanying the application, the name and address of the person claiming to be the lessee.
When such an application is filed, the Chief Metropolitan Magistrate or the District Magistrate will have to give a notice and give an
opportunity of hearing to the person claiming to be the lessee as well as to the secured creditor, consistent with the principles of
natural justice, and then take a decision. If the Chief Metropolitan Magistrate or District Magistrate is satisfied that there is a valid
lease created before the mortgage or there is a valid lease created after the mortgage in accordance with the requirements of Section
65-A of the Transfer of Property Act and that the lease has not been determined in accordance with the provisions of Section 111 of
the Transfer of Property Act, he cannot pass an order for delivering possession of the secured asset to the secured creditor. But in
case he comes to the conclusion that there is in fact no valid lease made either before creation of the mortgage or after creation of the
mortgage satisfying the requirements of Section 65-A of the Transfer of Property Act or that even though there was a valid lease, the
lease stands determined in accordance with Section 111 of the Transfer of Property Act, he can pass an order for delivering
possession of the secured asset to the secured creditor.
Sub-section (3) of Section 14 of the SARFAESI Act provides that no act of the Chief Metropolitan Magistrate or the District
Magistrate or any officer authorised by the Chief Metropolitan Magistrate or District Magistrate done in pursuance of Section 14
shall be called in question in any court or before any authority. The SARFAESI Act, therefore, attaches finality to the decision of the
Chief Metropolitan Magistrate or the District Magistrate and this decision cannot be challenged before any court or any authority. But
this Court has repeatedly held that statutory provisions attaching finality to the decision of an authority excluding the power of any
other authority or court to examine such a decision will not be a bar for the High Court or this Court to exercise jurisdiction vested by
the Constitution because a statutory provision cannot take away a power vested by the Constitution. To quote, the observations of
this Court in Columbia Sportswear Company v. Director of Income Tax, Bangalore [(2012) 11 SCC 224]:
Considering the settled position of law that the powers of this Court under Article 136 of the Constitution and the
powers of the High Court under Articles 226 and 227 of the Constitution could not be affected by the provisions made
in a statute by the Legislature making the decision of the tribunal final or conclusive, we hold that sub-section (1) of
Section 245-S of the Act insofar as it makes the advance ruling of the Authority binding on the applicant, in respect of
the transaction and on the Commissioner and Income Tax Authorities subordinate to him, does not bar the jurisdiction
of this Court under Article 136 of the Constitution or the jurisdiction of the High Court under Articles 226 and 227 of
the Constitution to entertain a challenge to the advance ruling of the authority.
In our view, therefore, the decision of the Chief Metropolitan Magistrate or the District Magistrate can be challenged before the High
Court under Articles 226 and 227 of the Constitution by any aggrieved party and if such a challenge is made, the High Court can
examine the decision of the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, in accordance with the
settled principles of law.
On bare perusal of Para 28 and 29 referred above, it is crystal clear that, though the Court and other authority is barred to interfere with the
decision of the District Magistrate or the Chief Metropolitan Magistrate under Section 14 sub Section 3 of the SARFAESI Act, but that does not
bar the aggrieved party from approaching the High Court under Articles 226 and 227 of the Constitution of India.
Further, Section 17 of the SARFAESI Act, 2002 also makes a provision for an appeal for any person aggrieved by any of the measures
referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer to the Debts Recovery Tribunal.
The Hon''ble Supreme Court in the case of Transcore versus Union of India and Another: (2008) 1 SCC 125 at Para 73 was pleased to
observe that:
The word possession is a relative concept. It is not an absolute concept. The dichotomy between symbolic and physical
possession does not find place in the Act.
Since in this case symbolic possession has already been taken by the petitioner Bank, I do not find any bar for the respondent to approach the
Debts Recovery Tribunal. Therefore, I am of the opinion that the actual issue of the case needs to be decided by the Debts Recovery Tribunal,
Guwahati. Hence, the petitioner can easily approach the Debts Recovery Tribunal, Guwahati and after the decision of the Debts Recovery
Tribunal, Guwahati, the petitioner can approach the District Magistrate or the Chief Metropolitan Magistrate as directed by the Debts Recovery
Tribunal, Guwahati.
With this observation and direction the petition is dismissed and stands disposed of.