9911796707
TMI Blog2021 (12) TMI 1508X X X X Extracts X X X X X X X X Extracts X X X X ..... r extension are filed before the CMM and upon the said applications being either allowed or declined by the CMM, petitions are filed before this Court challenging the said decision of the CMM - This Court finds merit in the submissions made by the petitioner, that there is no requirement or rationale in providing a time limit in orders passed by the CMM under Section 14 of the SARFAESI Act, in respect of taking possession of the secured asset. In fact, setting of a time limit by the CMM for taking possession of a secured asset is contrary to the legislative intent - the impugned order dated 30th March, 2021 passed by the CMM, to the extent that it imposes a time limit of ninety days for the court receiver to take physical possession, is set aside. In the context of proceedings initiated under the SARFAESI Act, whether an order passed in a civil suit instituted by a third party in respect of the mortgaged property/secured asset would bind the secured creditor, if the said secured creditor was not a party to the Civil Suit? - HELD THAT:- The Division Bench in Allahabad Bank in ALLAHABAD BANK VERSUS DISTRICT MAGISTRATE, LUDHIANA AND ORS. [ 2021 (9) TMI 1562 - PUNJAB AND HARYANA HIGH C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 1. The present petition under Article 227 of the Constitution of India impugns orders passed by the Chief Metropolitan Magistrate (CMM), South West, Dwarka Courts, New Delhi, being (i) the order dated 30th March, 2021, whereby a further period of ninety days has been granted to the court appointed receiver for complying with the order dated 15th October, 2019, whereby the said receiver was appointed to take possession of the secured asset; and, (ii) the order dated 17th August, 2021, whereby the Court of the CMM has failed to pass any orders qua the extension of time in view of the status quo orders passed by the Additional District Judge (ADJ)-01, South West, Dwarka Courts, New Delhi in the suit filed by the respondent no.3 against the respondents no.1 and 2. 2. Notice was issued in the said petition on 23rd September, 2021. Reply has been filed on behalf of the respondents no.1 and 2 and on behalf of the respondent no.3. Oral submissions were made by the counsel for the petitioner and the counsel for the respondents no.1 and 2 on 10th, 11th and 16th November, 2021. However, no oral submissions have been made on behalf of the counsel for the respondent no.3. Judgment was reserve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T on 20th April, 2021 seeking stay against the taking of possession. The said application was dismissed by DRT on 20th April, 2021. 3.11 Against the order dated 20th April, 2021 of the DRT, the respondent no.2 filed an appeal, which was dismissed by the Debt Recovery Appellate Tribunal (DRAT) vide order dated 13th July, 2021. 3.12 In the meanwhile, the respondent no.3 filed a suit for mandatory injunction against the respondents no.1 and 2, being CS No. 430/2019, in respect of the subject property, where the petitioner was not impleaded as a party. In the said suit, vide order dated 12th July, 2021, the Court of ADJ-01, South West, Dwarka Courts, New Delhi directed parties to the suit to maintain status quo qua the suit property. The said order was extended from time to time. 3.13 In light of the said order, the court appointed receiver did not take possession of the property. 3.14 The petitioner filed an application before the CMM seeking, inter alia change of court appointed receiver and extension of time for compliance of the order passed by the CMM under Section 14 of the SARFAESI Act. 3.15 Vide the impugned order dated 17th August, 2021, the CMM observed that once a status quo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not a party to the civil suit. 7. Insofar as the objections filed on behalf of the respondents no.1 and 2 are concerned, it is contended on behalf of the petitioner that there is no reply to the legal propositions raised in the present petition. The said respondents have only raised an issue that incorrect amount has been claimed by the petitioner and therefore, fraud has been played on the respondents no.1 and 2. It is submitted that the objections with regard to amounts due to the petitioner from the said respondents are not subject matter of the present petition and ought to be taken in appropriate proceedings before the DRT. An SA has already been filed on behalf of the respondents no.1 and 2, which is pending before the DRT. It is further contended that no equity can be claimed by the respondents no.1 and 2 as they have created third party interest in respect of the subject property and also left the country. 8. As regards the reply filed on behalf of the respondent no.3, it is contended on behalf of the petitioner that once again, no submissions have been made with regard to the legal questions raised in the present petition. In the reply filed by the respondent no.3, resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondents no.1 and 2; (iv) the petitioner should have impleaded itself in the civil suit and therefore, the present petition under Article 227 of the Constitution of India is not maintainable; (v) under the provisions of the SARFAESI Act, the bank cannot recover possession from a third party; (vi) the respondent no.3 has already paid Rs. 6,50,000/- to the petitioner in respect of the outstanding amount payable by the respondents no.1 and 2 and is willing to pay the balance loan amount to the petitioner with regard to the subject property; and, (vii) despite payment of excess amount, the loan account of the respondents no.1 and 2 has been declared NPA. 11. I have considered the rival contentions. 12. Following issues arise for consideration in the present petition: I. Whether there is any requirement or justification to fix a time limit by the CMM for taking possession of the secured asset while exercising jurisdiction under Section 14 of the SARFAESI Act? II. In the context of proceedings initiated under the SARFAESI Act, whether an order passed in a civil suit instituted by a third party in respect of the mortgaged property/secured asset would bind the secured creditor, if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time for taking over physical possession of the properties of the debtor, as sought by the bank. While allowing the said petition, this Court observed as under: 10. This Court has considered the matter. There is no doubt that the time period of 30 days, extendable to 60 days, fixed under section 14 of the SARFAESI Act, are for executing the order of the Chief Metropolitan Magistrate, concerning the taking over of physical possession of the properties by the Bank. However, if the court receivers did not cooperate with the Bank, in lieu of taking over the possession of the said properties, it cannot be held that the Court would be rendered powerless and the order directing the taking over of physical possession would be set at naught. 11. In order to secure the asset of the Bank, it is in the interest of justice that the physical possession of the concerned properties, ought to be taken so as to ensure that the asset is not frittered away by the debtor. (emphasis supplied) 17. The aforesaid judgment in Jammu and Kashmir Bank (supra) was followed by me in Sansar Chand Sharma Vs. Kotak Mahindra Bank Ltd., through Chief Manager Sh. G.S. Pander, 2021 SCC OnLine Del 4911, wherein it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel has argued that even though the bank is not a party in the said civil suits, but since the Court has restrained interference in the possession of the plaintiff therein, therefore taking over physical possession at the instance of the bank, would amount to infringement of the interim stay orders. In other words, the argument is that the interim stay order in favor of the plaintiff would bind even the bank even if it is not a party to the civil suit. 17. We do not find merit in the aforesaid argument. It has been noticed above, that admittedly in none of the two civil suits, the bank is a party defendant. The first civil suit is filed by a plaintiff / tenant and the relief so claimed is also restricted therein to the defendant / landlord and not against the bank. Not only this, the interim order dated 13.07.2018 itself clarifies that the said injunction would not be applicable to third parties which are not impleaded in the said civil suit. The relevant portion of the order dated 13.07.2018 is extracted as under:- 8. Before parting with this order, it is hereby made clear that due compliance of Order 39 Rule 3 CPC be made forthwith and copy of this order also given for effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board Vs. Pramila Sanfui, (2016) 1 SCC 743 has held as under: 25. Further, in the instant case, the order of temporary injunction dated 3-7-2006 purportedly granted by consent is also not sustainable in law. The question of consent being given by either the appellant Housing Board or the predecessors-in-interest who are its vendors did not arise as they were not parties to the said suit. It is a well- settled principle of law that either temporary or permanent injunction can be granted only against the parties to a suit. Further the purported consent order in terms of Order 39 of the Code of Civil Procedure is only binding as against the parties to the suit. In such a case, the order of the Subordinate Judge to grant police protection against the appellant Housing Board which is enjoying the property is erroneous in law and is liable to be set aside. (emphasis supplied) 24. In the present case, no submissions have been made by the respondents on this legal proposition. In fact, the respondents no.1 and 2 have stated in their reply that they did not execute any agreement to sell in favour of the respondent no.3 and therefore, the suit filed by the respondent no.3 is frivolous. 25. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y event, in view of Section 34 of the SARFAESI Act, a civil court does not have jurisdiction to adjudicate the rights of a secured creditor or the enforcement of such rights by the secured creditor. Such rights can only be challenged by the borrower or any affected person before the DRT in terms of Section 17 of the SARFAESI Act. Further, in terms of Section 34, no injunction can be granted by any court in respect of any action taken in pursuance of any power under the SARFAESI Act. Therefore, the civil court, in the present case, did not have any jurisdiction to pass an injunction against the petitioner. 30. The dicta in Allahabad Bank, Branch at Industrial Area A, Link Road, Ludhiana through its Chief Manager/Authorised Officer Sh. Nishant Shukla (supra) is squarely applicable in the present case. In view thereof, the impugned order dated 17th August, 2021 passed by the CMM is patently erroneous. 31. Respondents no.1 and 2 have also raised an issue with regard to the amount claimed by the petitioner. They have contended that an exaggerated amount has been claimed by the petitioner in its various notices issued to the respondents, which are clearly in violation of the home loan ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour. The subject property was mortgaged by the respondents no.1 and 2 with the petitioner on 05th August, 2011. The respondent no.1 and 2 could not have sold the property without redeeming the mortgage. Even otherwise, the demand notice under section 13(2) of the SARFAESI Act was issued by the petitioner on 15th June, 2018. In view of Section 13(13) of the SARFAESI Act, the subject property could not have been sold by the respondents no.1 and 2 after receipt of the notice under Section 13(2) of the SARFAESI Act without prior consent of the petitioner. 34. Accordingly, the impugned order dated 17th August, 2021, to the extent it holds that since the order dated 12th July, 2021 in the civil suit has been passed by a court which is senior in hierarchy of courts to the CMM, it would be against the judicial discipline to pass an order under Section 14 of the SARFAESI Act, is set aside. 35. The CMM is directed to pass fresh orders appointing a receiver to take physical possession of the secured asset without fixing any time limit within which possession may be taken. 36. To summarise, the issues formulated by the Court stand answered in the following manner: (i) There is no requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
