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TMI Blog2015 (8) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised to exert force while taking possession and that is left only to the CMM/DM, as the case may be, in the sound exercise of his discretion under sub-section (2) of section 14. If on a request made by the authorised officer to vacate the secured asset the borrower or any person in occupation thereof does not voluntarily surrender possession, the secured creditor would have no other option but to seek the assistance of the CMM/DM under section 14 in the manner prescribed. - W.P. No. 11828 (W) of 2015, W.P. No. 12210(W) of 2015, W.P. No. 11993(W) of 2015, W.P. No. 11787(W) of 2015, W.P. No. 5651(W) of 2015, W.P. No. 10048(W) of 2015 - - - Dated:- 6-8-2015 - Justice Dipankar Datta For the petitioner : Mr. Debajyoti Basu, Mr. Suvadip Bhattacharjee, Mr. Ranjan Kali,Ms. Mitul Chakraborty, Mr. Om Narayan Rai, Mr. Pijush Kanti Ray, Mr. Arijit Bardhan, Mr. Debanik Banerjee, Ms. Paromita Sarkar, Mr. Srenik Singhvi, Ms. Sananda Ganguli, Mr. Shubrodip Roy, Mr. Satadeep Bhattacharya, Mr. Shambhu Mahato, Mr. Saroj Kumar Ghosh For the respondent : Mr. Maloy Kr. Ghosh, Mr. Basudeb Mukherjee, Mr. Shambhu Nath Ray, Ms. Rupsa Chakraborty, Ms. Amrita Tewari, ,Mr. Suman Jaiswal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence was made by him to the decisions reported in AIR 2009 Madras 10 (Indian Overseas Bank v. M/s. Sree Aravindh Steels Ltd.), AIR 2010 Bombay 53 (M/s. Puran Maharashtra Automobiles, Aurangabad v. Sub-Divisional Magistrate, Aurangabad), and AIR 2010 Chhattisgarh 83 [Ramdas Agrawal v. Collector (District Magistrate) District Durg]. 5. It was, however, contended by Mr. Saha that with the advent of the amendments in section 14 and the decision in Harshad Govardhan Sondagar (supra), there has been a radical change in law. He urged that the Supreme Court in such decision while holding that the district magistrate is to give an opportunity of hearing to the lessees and to pass orders in conformity with the principles of natural justice has not indicated that such right of hearing is available only to the lessees/tenants and it would be to the exclusion of all other categories of aggrieved persons. To put it differently, Harshad Govardhan Sondagar (supra) does not make any classification between a pre-mortgage lessee and the borrower. The main plank on which the decision in Harshad Govardhan Sondagar (supra) is based is sub-section (3) of section 14 and the judgment cannot be read as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision reported in AIR 1978 SC 597 (Maneka Gandhi v. Union of India ors.) was further referred to by Mr. Saha for the proposition that if the duty to give reasonable opportunity could be implied from the nature of functions being performed by the authority, fairness would demand that an opportunity to show cause ought to be extended. 8. The decisions reported in AIR 1966 SC 81 (Dwarka Nath v. Income Tax Officer), (1990) 2 SCC 746 (Neelima Misra v. Harinder Kaur Paintal) and (2012) 10 SCC 353 (State of Gujarat v. Gujarat Revenue Tribunal Bar Association) were also relied on in support of the argument that while discharging the duty enjoined on the CMM/DM by the second proviso to section 14 to satisfy himself of the contents of the affidavit filed by the secured creditor and to pass suitable orders for taking possession, the duty to act judicially is implicit in the exercise of such power. 9. Inviting attention to the decision reported in (2008) 15 SCC 517 (N. Padmamma v. S. Ramakrishna Reddy), Mr. Saha argued that the procedures laid down for deprivation of a person's right to property must be scrupulously followed. 10. It was also argued relying on Harshad Govardhan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in (2007) 2 SCC 711 (ICICI Bank Ltd. v. Prakash Kaur), Mr. Saha urged the Court to lay down the law that a borrower cannot be dispossessed by the secured creditor by force and that if the secured creditor is resisted by the borrower while taking possession, he can be dispossessed only in accordance with law, meaning thereby taking recourse to section 14. 14. Mr. Basu, learned advocate for the petitioner in W.P. No. 11828(W) of 2015, Mr. Ray, learned advocate for the petitioner in W.P. No. 12210(W) of 2015, Mr. Kali, learned advocate for the petitioner in W.P. No. 11993(W) of 2015 and Mr. Bardhan, learned advocate for the petitioner in W.P. No. 11787(W) of 2015 have echoed the submissions of Mr. Saha without raising any substantial additional point. 15. Mr. Mantha, learned senior advocate for Andhra Bank in W.P. No. 11787 (W) of 2015 argued that on a plain reading of section 14, it would appear to be fairly clear that the CMM/DM, as the case may be, does not decide the rights of parties; considering the declaration given in the affidavit, the CMM/DM has to satisfy himself regarding the contents of such affidavit and then to pass an appropriate order as the facts and cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeding against the borrower under section 13 and/or section 14 is manifest. 19. Mr. Mantha also relied on a Division Bench decision of the Bombay High Court in W.P. No. 11459 of 2014 (Kamal Jajoo v. Oriental Bank of Commerce) dated February 23, 2015 and a Full Bench decision of the Madurai Bench of the Madras High Court in W.P. (MD) No. 11078 of 2011 (K. Arockiyaraj v. The Chief Judicial Magistrate) dated August 27, 2013. In Kamal Jajoo (supra), the Bench repelled the contention raised on behalf of the petitioners that the amendments under section 14 required the concerned magistrate to adjudicate and decide the correctness or otherwise of the information which is given in the application and that the principal borrower gets right of taking part in the proceedings for the purpose of assisting the magistrate. In the latter decision, it was observed in paragraph 18 that no adjudication of rights is involved while the CMM/DM considers a request for assistance under section 14 of the SARFAESI Act. 20. The decision reported in AIR 2014 SC 525 (Arasmeta Captive Power Company Private Limited and anr. v. Lafarge India Private Limited) was cited by Mr. Mantha to remind the Court as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 14, has to be understood only in the context of a lessee in occupation of a secured asset by virtue of a registered lease executed before creation of the subject mortgage. 24. Regarding the aspect of applicability of force by the authorised officer to take over possession of a secured asset when faced with resistance, Mr. Rai enlightened me that even the Reserve Bank of India (hereafter the RBI) had issued guidelines after the decision in Prakash Kaur (supra) vide circular dated April 24, 2008 expressing concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law. The banks were warned that if the RBI received complaints regarding violation of the guidelines provided in the circular and of adoption of abusive practices followed by the recovery agents of the banks, the same would be viewed seriously, including consideration of imposition of a ban on a bank from engaging recovery agents in a particular area for a limited period. The banks were also warned that in case of persistent breach of the guidelines, the RBI would consider extending the period of ban or the area of ban. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in possession in spite of measure taken under Section 13 (4), following notice under Section 13 (2). This is because, the employment of any physical power to dispossess, even in terms of a statute or enforceable order could be only had in exercise of the police power of the State. Even a court does not have the power to dispossess by force, through its officer; but has the power to secure it only through the police machinery of the State. That power cannot be conceded to any individual or institution empowered to take possession, except in cases where the power to physically dispossess is also expressly conferred. That such a power has not been conferred by the Parliament on a secured creditor under the Act and that it is never so intended, are explicit from the very making of Section 14. 28. Mr. Samrat Sen, learned senior advocate for the State in W.P. No. 10048(W) of 2015 referred to paragraph 20 of the decision in V. Noble Kumar (supra) where it has been observed that visualising the possibility of resistance for such action, Parliament under Section 14 also provided for seeking the assistance of the judicial power of the State for obtaining possession of the secured asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occupation of lands/premises, if the conditions therefor were satisfied. He also referred to the decisions of the Supreme Court reported in (2002) 4 SCC 134 (State of West Bengal v. Vishnu Narayan Associates Pvt. Ltd.), (2013) 4 SCC 280 (State of Uttar Pradesh v. Hari Ram) and (2013) 12 SCC 631 (S.D. Bandi v. Divisional Traffic Officer, Karnataka State Road Transport Corporation) for the proposition of law that a person may be evicted by force by the State or its executive officers should there be a specific conferment of power in that behalf by a statutory provision and not otherwise. 34. According to Mr. Sen, section 14(2) of the SARFAESI Act while authorising the CMM/DM to use such force as may in his opinion be necessary speaks of reasonable force to secure possession of a secured asset and for delivering such possession to the authorised officer but such authorised officer in exercising the power conferred on him by section 13(4)(a) thereof has no power to evict a borrower/occupant from the secured asset by employing recovery agents and/or by using force. 35. Mr. Bhattacharya, learned advocate for the petitioner in W.P. No. 10048(W) of 2015 adopted the submissions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order passed by the CMM/DM, as the case may be, refusing to grant assistance to the secured creditor to take possession of a secured asset can only be challenged in writ proceedings, since no remedy under section 17 is available to such creditor, while the borrower can always challenge such order before the relevant tribunal. 41. In his reply, Mr. Saha while reacting to the decision in Kamal Jajoo (supra) submitted that the same ought not to be relied upon for diverse reasons. First, it is based entirely on two earlier decisions of the Supreme Court reported in (2004) 4 SCC 311 (Mardia Chemicals Limited vs. Union of Inia) and Transcore (supra). Both were rendered prior to the amendments in section 14 of the SARFAESI Act and thus cannot be relied upon to decide the effect of such amendments or whether section 14 was amended to afford an opportunity of hearing to a person aggrieved. Secondly, the decision does not contain any discussion as to why the necessity to amend section 14 was felt or required. Thirdly, the decision is silent with regard to the nature of the 'satisfaction' required to be arrived at by the CMM/DM on the basis of the affidavit to be filed before him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the decision in Harshad Govardhan Sondagar (supra)? 44. One other question that would engage my consideration is, does section 13(4)(a) or any other provision of the SARFAESI Act confer power on the authorised officer/secured creditor to take possession of a secured asset by dispossessing the borrower or any person in occupation thereof by force, should the borrower or occupant refuse to surrender possession or resist such attempt? Assuming the answer to be in the negative, who would be entitled to dispossess a borrower/an occupant from the secured asset and how? 45. It would not be inapt, at this stage, to read section 14 of the SARFAESI Act in its new avatar. Section 14, with the amendments in italics, for facility of reference and decision is reproduced hereunder: 14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.-- (1) Where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n receipt of the affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets: Provided also that the requirement of filing affidavit stated in the first proviso shall not apply to proceeding pending before any District Magistrate or the Chief Metropolitan Magistrate, as the case may be, on the date of commencement of this Act. (1-A) The District Magistrate or the Chief Metropolitan Magistrate may authorise any officer subordinate to him,-- (i) to take possession of such assets and documents relating thereto; and (ii) to forward such assets and documents to the secured creditor. (2) For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary. (3) No act of the Chief Metropolitan Magistrate or the District Magistrate (sic or) any officer authorised by the Chief Metropolitan Magistrate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the fact that efficacious alternative remedy is available to the borrower as well as to the third party, ordinarily, writ petition under Articles 226 and 227 of the Constitution of India should not be entertained. 8. In exceptional cases of gravest injustice, a writ petition could be entertained by this Court. 9. Great care and caution must be exercised while entertaining a writ petition because in a given case it may result in frustrating the object of the NPA Act. 10. Even if a writ petition is entertained, as far as possible, the parties should be relegated to the remedy provided under Section 17 of the NPA Act before the DRT by passing an interim order which will protect the secured assets. Adjudication and final order should be left to the DRT as far as possible. 48. The other one is Mansa Synthetic Pvt. Ltd. (supra), cited by Mr. Sen, where the constitutional validity of section 14 was in question before the Division Bench of the Gujarat High Court. While declaring section 14 intra vires, the Court had the occasion to observe as follows: 15.2. ***** Thus, it is apparent that the role envisaged by the legislature insofar as the Authority is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking possession of the secured assets as provided under Section 13(4) of the Act. After 60 days' notice as prescribed under Section 13(2), secured creditor can approach the Magistrate for taking possession of the land. Reading Section 13(4) and Section 14 of the Act in conjunction with each other makes it clear that the source of power to take possession of the secured assets of the borrower can be traced in Section 13(4) of the Act and not under Section 14 of the Act, which has been indicated as an aid for execution of the decision taken by the secured creditor to take possession of the secured assets or documents. In other words, the substantive provision entitling the secured creditor to take possession of the secured assets is contained in Section 13(4) of the Act and Section 14 of the Act merely contains a provision to facilitate the secured creditor for taking over possession without any impediment. ***** 49. I agree with the views extracted above. 50. Right from the decision of the Supreme Court in Mardia Chemicals (supra), where the constitutionality of various provisions of the SARFAESI Act were under challenge till the decision in V. Noble Kumar (supra), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here could be no warrant for so applying. V. Noble Kumar (supra), therefore, stresses on the need for examining the factual correctness of the assertions made in the affidavit by the CMM/DM and not the legal niceties of the transaction. One other reason, to my mind, is to promote accountability by insisting on an affidavit being filed by the authorised officer of the secured creditor in support of the prayer for taking possession. If at any subsequent stage after passing of an order under section 14 the authorised officer is found to have filed a false affidavit, he may be exposed to prosecution under section 340, Criminal Procedure Code. Permitting the CMM/DM to delegate the power of taking possession of the secured asset seems to me to be the other reason for incorporating an additional sub-section, i.e. (1-A). Going by the language of un-amended section 14, it would appear that the CMM/DM had to do the desk work and the field work as well for taking possession. However, in these days of hectic activity in every sphere, it is indeed difficult for a public functionary to himself perform all the duties he is privileged to perform and, therefore, has to take the aid of agents and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponding to the objection/representation that may be lodged/preferred by the borrower under section 13(3A). That Mardia Chemicals (supra) and Transcore (supra) are pre-section 14 amendment decisions, make no difference. There is no fundamental change in the object and purposes of the SARFAESI Act even after the amendments. Since the need for a borrower to draw legal assistance arises only after a demand notice under sub-section (2) is issued, it has been experienced in very many cases that sub-section (1) of section 13, which is the harbinger of misfortune of recalcitrant borrowers, is completely overlooked by those representing them. The present cases are not too different. Decision by a quasi-judicial authority (see section 17) upon compliance with natural justice stands deferred till such time possession is taken. The SARFAESI Act does not remotely suggest compliance with natural justice at the stage when section 13(4) or 14 operates. Paragraph 36 of V. Noble Kumar (supra) explains that there are 3 (three) methods for taking possession of a secured asset. In view thereof, section 14 cannot stand independent of sub-section 13(4). If a borrower has no right of hearing when the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nergy Limited) for the proposition that a marginal note is relevant only if the language of the statute is ambiguous. 57. The decision in Bhogilal Laherchand (supra) in paragraph 14 quoted a passage from the decision reported in 1950 SCR (CIT v. Ahmedbhai Umerbhai Co.). The Supreme Court noticed that the marginal note was changed so as not to confine applicability of the relevant section to non-residents but also to residents. The decisions in Ahmedbhai Umerbhai (supra) and Bhogilal Laherchand (supra) do not lay down the law that a marginal note can never be looked into, even in case of doubt or ambiguity. 58. That a marginal note can be considered as an aid for interpreting the section of an enactment has been repeatedly held by the Supreme Court at least from the seventies of the last century. I shall now notice some other decisions of the Supreme Court that say with clarity that a marginal note is relevant for interpreting a statute. 59. In the decision reported in (1971) 2 SCC 779 (Union of India v. H.S. Dhillon), it has been held that a marginal note can serve as a guidance where there is ambiguity or doubt about the true meaning of the provision. 60. The Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soever for not giving to the plain words of the section the meaning that on the face of it they bear. 65. Before concluding my discussion on the point, the observation made in paragraph 20 of V. Noble Kumar (supra) that the Parliament under Section 14 also provided for seeking the assistance of the judicial power of the State for obtaining possession of the secured asset ought to be considered. 66. At the dawn of the Constitution, the Supreme Court was considering what is meant by a court . The Constitution Bench in its decision reported in AIR 1950 SC 188 (Bharat Bank Ltd. v. Employees) ruled that before a person or persons can be said to constitute a court , it must be held that they derive their powers from the State and are exercising the judicial powers of the State. 67. First, what constitutes the 'judicial power of the State needs to be understood. I can do no better but refer to two other Constitution Bench decisions of the Supreme Court. 68. In the decision reported in AIR 1965 SC 1595 (Associated Cement Companies Ltd. v. P.N. Sharma), the principal point of law which arose in the civil appeal by special leave was whether the State of Punjab, respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is a lis -- an affirmation by one party and denial by another -- and the dispute necessarily involves a decision on the rights and obligations of the parties to it and the authority is called upon to decide it, there is an exercise of judicial power. *** 70. Reference in this connection may also be made to the decision reported in AIR 2005 SC 3549 (Management Committee, Montfort Senior Secondary School v. Vijay Kumar) where meaning assigned to the words 'judicial', 'judicial power' and 'judicial authority' in certain foreign decisions and legal dictionaries were noticed. The relevant passage is quoted below : 14. In Regina John M'Evoy v. Dublin Corporation (1878) 2 LR Ir 371 (D) it was observed as under : The term 'judicial' does not necessarily mean acts of a judge or legal tribunal sitting for the determination of matters of law, but for the purpose of this question a judicial act seems to be an act done by competent authority, upon consideration of facts and circumstances and imposing liability or affecting the rights of others. 15. In Huddart Parker and Co. v. Moorehead (1909) 8 CLR 330 (E) judicial powers were defined as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ium v. Parkinson, (1892) 1 QB 431). Judicial Power : The power to decide cases and controversies (Craig R. Ducat - Constitutional Interpretation). In Words and Phrases - Legally Defined by John B. Saunders, Volume 3, at page 113, 'Judicial Power' has been defined : 'If a body which has power to give a binding and authoritative decision is able to take action so as to enforce that decision, then but only by then, according to the definition quoted, all the attributes of judicial power are plainly present.' 'Judicial power' as defined by Chief Justice Griffith in Huddart Parker and Co. v. Moorehead (1909) 8 CLR 330 at 357 approved by the Privy Council in Shell Company of Australia v. Federal Commr. of Taxation, (1931) AC 275 at p. 283 means the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action. The authority to determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction between the secured creditor and the borrower are not to be examined by the CMM/DM. If indeed a lis were involved, it would not be open to the CMM/DM to say that it would examine factual aspects only and not the legal niceties. Since the CMM/DM does not decide any lis between parties upon receiving evidence from them, the judicial power of the State is not exercised by him. 73. In view of the above conclusions, I regret my inability to be ad idem with Mr. Saha, Mr. Sen and the other learned advocates to read natural justice in section 14. 74. Harshad Govardhan Sondagar (supra) being the sheet anchor of the arguments in support of the necessity of reading natural justice in section 14 would fall for consideration next. 75. The principal questions of law that arose for consideration in Harshad Govardhan Sondagar (supra) are required to be noted. They are: (i) whether the provisions of the SARFAESI Act have in any way affected the right of a lessee to remain in possession of the secured asset during the period of a lease ? (paragraph 15). (ii) whether the provisions of the SARFAESI Act have the effect of terminating these valid leases made by the borrower o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it accompanying the application that the secured asset is not in possession of a lessee under the valid lease made prior to creation of the mortgage by the borrower or made in accordance with section 65- A of the Transfer of Property Act (hereafter the TP Act) prior to receipt of a notice under sub-section (2) of section 13 of the SARFAESI Act by the borrower. It was also held that in view of section 34 of the SARFAESI Act, recourse to civil courts would not be available. 77. Question (v) was answered by the Court by holding as follows: 28. A reading of sub-rules (1) and (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 would show that the 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, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 29. 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 the 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. ...... In our view, therefore, the decision of the Chief Metropolitan Magistrate or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset to the lessee. In our considered opinion, therefore, there is no remedy available under Section 17 of the SARFAESI Act to the lessee to protect his lawful possession under a valid lease. 79. Before proceeding further, section 34 of the SARFAESI Act may be considered. It ordains that : 34. Civil court not to have jurisdiction.--No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993). 80. What the Supreme Court in Mardia Chemicals (supra) held on the limited extent of the civil courts jurisdiction for receiving suits, may now be noticed. Paragraph 51 thereof reads as follows : 51. However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. To protect a bona fide lessee or tenant from being drowned in a situation of no remedy being available under the Act, the Supreme Court in Harshad Govardhan Sondagar (supra) has even read the requirement of complying with natural justice in Section 14 of the Act before an order is made by the relevant magistrate. The effect is that what was otherwise a non-adjudicatory process would now partake the character of a quasi-judicial proceeding. This observation does not, in fact, aid the borrowers. The question that arose for decision there was whether a section 17 application at the instance of a borrower would lie before he lost possession of the secured asset. Paragraph 15 is not the ratio of the decision but in the nature of a passing observation considering Harshad Govardhan Sondagar (supra) which, as observed above, read natural justice in section 14. However, there can be no doubt that the decision in Harshad Govardhan Sondagar (supra) turns on its facts and has no application when the person aggrieved is someone who is either not a pre-mortgage lessee or a lessee to whom section 65-A of the TP Act applies. 86. Here, I am not concerned with any claim raised by a less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT. 91. In V. Noble Kumar (supra) too, similar view has been expressed. Paragraph 27 reads as follows: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' (see Chambers Dictionary). To my mind, what it suggests is that any act aimed at taking possession [either in terms of section 14(1-A) or section 14(2)] in pursuance of an order passed under section 14(1) would not be open to challenge except before the High Court under Article 226 or before the Supreme Court under Article 32. The CMM/DM has been given absolute discretion to choose his subordinate officer, who would execute the order and take possession of the secured asset. In terms of sub-section (2), the CMM/DM is also authorised to take or cause to be taken such steps and use or cause to be used such force as may, in his opinion, be considered necessary. Take an instance, where even after an order under section 14(1) is passed the resistance put up by the borrower turns the situation violent and user of force to maintain orderliness and to take possession of the secured asset leads to some casualty. Can the steps/force taken/used by the officer authorised by the CMM/DM be challenged before any ordinary court/tribunal? I am of the considered opinion that sub-section (3) of section 14 should be read as intending to provide protection to persons acting in good faith to give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt and the guidelines issued by the RBI following the observations made therein, which have been placed before me by Mr. Rai. 98. None has disputed that the RBI guidelines are binding on the banks. In terms of such guidelines, a borrower/occupant cannot be made to lose possession by extra-legal means. That is the easy way of answering the question. However, I propose to answer the question bearing in mind the provisions of the SARFAESI Act. 99. V. Noble Kumar (supra) in paragraph 36 has delineated how possession of a secured asset could be taken by a secured creditor. Apart from the requirement of preparation of notice in Appendix IV, affixation thereof and publication in newspapers, the Rules provide no guidelines regarding the procedure for taking possession. Therefore, section 13 and section 14 are the only relevant sections. It is noteworthy that while sub-section (2) of section 14 permits the CMM/DM to take or cause to be taken such steps and use or cause to be used such force as may, in his opinion, be necessary, sub-section (4) of section 13 or any other sub- section thereof does not authorise a secured creditor to barge into the secured asset for taking its possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in P.S. Kasba, District 24 Parganas (South). 105. There is no indication in the former writ petition of the secured asset having been transferred in favour of any third party. The impression that one derives on reading thereof is that possession of the flat (secured asset) was with Jawahar and that on the basis of the order impugned dated January 22, 2015 passed by the District Magistrate, 24 Parganas (South), Jawahar was forcefully dispossessed and the flat put under lock and key. 106. This writ petition cannot be considered in isolation without looking into W.P. 12210(W) of 2015 dated June 16, 2015 (hereafter the latter writ petition) presented by Amar Nath Shaw (hereafter Amar). 107. Amar claims to have purchased from Jawahar by a registered deed of conveyance dated December 15, 2011 the flat, of which possession was taken by the secured creditor in terms of the order dated January 22, 2015 passed by the District Magistrate, 24 Parganas (South) impugned in the former writ petition. It is the further claim of Amar that after such purchase, his name has been mutated in the records of the Kolkata Municipal Corporation and that he has also been paying property tax in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Division Bench having granted him liberty to approach the appropriate forum after auction, no writ petition for any action taken at the intermediate stage before auction would be maintainable. If a writ petition at this stage is entertained, that would in effect be contrary to the order of the Hon'ble Division Bench. The remedy of Jawahar lies in approaching the appropriate forum, i.e. the tribunal under section 17 of the Act, against the order dated January 22, 2015, in accordance with the order of the Hon'ble Division Bench as well as according to law. No case for interference has thus been set up by Jawahar. W.P. No. 11828(W) of 2015 stands dismissed, without order for costs. 112. Insofar as the latter writ petition is concerned, Amar is not entitled to any relief for restoration of possession as claimed by him. Admittedly, he is not a pre- mortgage lessee/tenant but is the purchaser of a property which was mortgaged by his vendor before the subject sale transaction. It may be so that the vendor suppressed the fact of creation of mortgage but any purported defect in the order of the district magistrate cannot lead to an order setting it aside on conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l shall be at liberty to examine the matter in depth and to ascertain whether a case for exercise of power under sections 13 and 14 had indeed been set up or not and further as to whether taking of possession by the authorised officer of the secured creditor has resulted in any grave miscarriage of justice or not. 119. W.P. 11993(W) of 2015 stands dismissed without costs. Interim order, if any, stands vacated. 120. Needless to observe, dismissal of this writ petition shall not influence the tribunal, if approached, in any manner whatsoever. W.P. 11787(W) of 2015 121. Challenge in this writ petition dated June 8, 2015 is to an order dated February 2, 2015 passed by the Chief Metropolitan Magistrate, Calcutta on an application under section 14 of the SARFAESI Act filed by Andhra Bank. The order impugned is not annexed to the writ petition; however, the same has been produced by Mr. Mantha appearing for the bank and has been taken on record. It is revealed therefrom that the bank was permitted to take physical possession of the secured asset i.e. a flat in the building Shyam Kunj at 12/C, Lord Sinha Road, P.S. Shakespeare Sarani, Kolkata with police help, if necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it has no application in the case at hand. Whether or not the petitioner is a lawful tenant is to be decided by the tribunal itself and cannot be left to the decision of the magistrate under section 14 of the Act, as erroneously observed by the tribunal. The order dated February 23, 2015, accordingly stands set aside with the result that application being no. SA/37/15 would stand revived. The tribunal shall proceed to consider and dispose of such application in accordance with law as early as possible. 127. W.P. No. 5651(W) of 2015 stands allowed to the extent indicated above, without order for costs. W.P. No. 10048(W) of 2015 128. The petitioner being the secured creditor had applied before the District Magistrate, 24 Parganas (South), for taking possession of a secured asset being a residential flat on the 1st floor of 'Soundarjya Apartment' along with car parking space on the ground floor at Manik Bandopadhyay Sarani, P.S. Regent Park. By a letter dated October 22, 2014, the district magistrate spurned the application on the ground that notice under section 13(2) was not properly served on the borrower. 129. The respondents 6 and 7 (private respondents) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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