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2017 (3) TMI 691 - HC - Indian LawsDenial of restoration of possession of the suit property and for other consequential reliefs - Securitization Application - Held that - In view of the ratio laid down by the Supreme Court in the case of Harshad Sondagar (2015 (11) TMI 1315 - SUPREME COURT ) and in view of Section 17 which was prevailing prior to the amendment of 1.9.2016, the DRT was having power to restore the possession of the secured assets for and in favour of the borrower but it could not restore the possession of the secured assets to the lessee. Writ Petition allowed and respondent No.1-Bank is hereby directed to restore the possession of the suit property in favour of the petitioners forthwith and in any case within a period of fifteen days from today. After scrutinizing the entire material/documents available on record, we are of the considered opinion that the respondent bank has taken the possession of the suit property unceremoniously and without following due process of law. The documents available on record clearly shows that the petitioners have been forcibly evicted from the suit property in question. The aforesaid discussion on facts will unequivocally lead to a positive conclusion that the concerned officers of respondent No.1 in utter violation of the provisions of the SARFAESI Act have indulged into taking possession of the suit property and the petitioners have been evicted from the suit property unceremoniously and forcibly and therefore, we are of the considered opinion that Section 29 of the SARFAESI Act squarely applies in the present case. We therefore, grant liberty to the petitioners to file complaint as contemplated under Section 29 of the SARFAESI Act and any other law prevailing in the field against Shri. R. Ramnathan Assistant General Manager and the Authorized Officer and Shri. Sanjay Satpathi, and Law Officer of respondent No.1 Bank, for taking forcible possession who were present at the time of taking possession and any other person related with the said offence, if so advised. The directions to that effect given by the DRAT by its order dated 14.10.2014 in Para 11 are maintained to that extent. However, the further directions issued by the DRAT to the District Magistrate to consider and take cognizance if the complaint is made and to secure the presence of the said persons and dispose of the case according to law is hereby quashed and set aside. as such a direction is against the settled cannons of law. Writ Petition preferred by the respondent No.1-bank is partly allowed and while reserving the right of the petitioners to file appropriate complaint and/or to adopt proceedings as contemplated under Section 29 of the SARFAESI Act and any other law in force, the observations made by the DRAT in its order dated 14.10.2014 in Para No.11, to the extent that, In turn the District Magistrate is directed to consider and take the cognizance if the complaint is made and to secure the presence of above person by issuing NBW and dispose of the case according to law , are quashed and set aside. The rest of the directions issued by the DRAT in Para 11 are maintained.
Issues Involved:
1. Correctness of the Debt Recovery Appellate Tribunal's (DRAT) order denying restoration of possession of the suit property. 2. Initiation of action under Section 340 of the Code of Civil Procedure against the petitioners for alleged offences under the Indian Penal Code. 3. Bank's writ petition to quash findings of forcible possession of secured assets. 4. Validity and effect of the letter dated 1.4.2005 allegedly signed by the petitioners. 5. Whether the Debt Recovery Tribunal (DRT) had jurisdiction to restore possession to lessees under the unamended Section 17(3) of the SARFAESI Act. 6. Allegations of forcible eviction and compliance with the SARFAESI Act. Detailed Analysis: 1. Correctness of the DRAT's Order Denying Restoration of Possession: The petitioners challenged the DRAT's decision which set aside the DRT's order to restore possession of the suit property to them. The DRAT had ruled that possession cannot be handed over to the tenant/licensee based on the Supreme Court's judgment in Harshad Goverdhan Sondagar vs. International Assets Reconstruction Co. Ltd. The High Court scrutinized the entire material/evidence independently and concluded that the bank had taken possession unceremoniously and without following due process of law, thus directing the bank to restore possession to the petitioners. 2. Initiation of Action under Section 340 of the Code of Civil Procedure: Respondent No.2 filed an application under Section 340 of the Cr.P.C. against the petitioners for alleged offences under Sections 177, 182, 193, 199, and 209 of the IPC. The High Court dismissed this application, finding no merit in the allegations. The court noted that the petitioners had consistently disputed the authenticity of the letter dated 1.4.2005 and that the CBI's investigation supported their claim of forgery. 3. Bank's Writ Petition to Quash Findings of Forcible Possession: The bank sought to quash findings that it had taken forcible possession of the secured assets. The High Court upheld the DRAT's finding that the bank had taken forcible possession on 6.4.2011 without following the mandatory provisions of the SARFAESI Act. The court granted the petitioners the liberty to file a complaint under Section 29 of the SARFAESI Act against the bank officers involved. 4. Validity and Effect of the Letter Dated 1.4.2005: The letter dated 1.4.2005 was purportedly signed by the petitioners, consenting to the mortgage and agreeing to vacate the suit property. The petitioners denied signing this letter and claimed it was forged. The High Court found that the letter was indeed forged, based on the handwriting expert's report and the CBI's investigation. The court concluded that the letter had no legal significance and should be disregarded. 5. Jurisdiction of the DRT under Unamended Section 17(3) of the SARFAESI Act: The High Court noted that under the unamended Section 17(3) of the SARFAESI Act, the DRT did not have the power to restore possession to lessees. However, the court exercised its jurisdiction under Articles 226 and 227 of the Constitution to independently assess the material and concluded that the petitioners were entitled to restoration of possession due to the bank's unlawful actions. 6. Allegations of Forcible Eviction and Compliance with the SARFAESI Act: The petitioners alleged that they were forcibly evicted from the suit property by the bank officers without following due process. The High Court found that the bank had indeed taken possession forcibly and without complying with the mandatory provisions of the SARFAESI Act, such as obtaining an order from the Magistrate under Section 14. The court directed the bank to restore possession to the petitioners and allowed them to pursue legal action against the bank officers involved. Conclusion: The High Court allowed the petitioners' writ petition, directing the bank to restore possession of the suit property. The bank's writ petition was partly allowed, quashing certain directions issued by the DRAT. The application under Section 340 of the Cr.P.C. was dismissed. The court emphasized the importance of following due process and the rule of law in eviction proceedings under the SARFAESI Act.
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