1. C.M. Application No.127734 of 2019 has been filed praying for leave to amend the prayer clause of the writ petition and to delete the word "termination" from the prayer clause (i) and to correct the date of the impugned order to "22.10.2008".
2. The amendment sought being formal in nature is allowed.
3. Learned counsel for the petitioner shall incorporate necessary amendments during the course of the day.
4. This petition has been filed challenging the order dated 22.10.2008 passed by the Presiding Officer, Debt Recovery Tribunal.
5. It is the case of the petitioner that he had taken the loan of Rs.15 lakhs from Bank of Maharashtra in the year 2005 and started construction of building, but he suffered huge losses in business and could not repay the loan to the Bank. The Bank declared his account as Non Performing Asset and issued a notice under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as the 'SARFAESI Act') on 16.06.2007. The petitioner submitted a representation under Sub-Section 3A of Section 13 and requested for statement of account and time to arrange the money, but the Bank neither provided the statement of account nor decided the representation of the petitioner. No notice under Section 13 Sub-Section 4 was given and the Bank initiated proceedings of sale of the building in question without issuing notice under Rule 8 Sub-Rule 6 and Rule 9. No application under Section 14 (1) was moved by the Bank also. The entire procedure adopted by the Bank was against the provisions of the SARFAESI Act only because there was a conspiracy to hand over the building in question to the wife of the current Bank Manager Sri Sharad Kumar Sinha.
6. The petitioner filed a Writ Petition No.2624 (M/B) of 2008 before this Court praying for time to arrange money. This writ petition remained pending and auction was held on 28.06.2008 in favour of wife of the Bank Manager and Sanjay Singh, his relative. The petitioner filed a Securitization Application numbered as S.A. No.104 of 2008 before the Debt Recovery Tribunal on 17.07.2008. The Bank filed preliminary objection that the Securitization Application was beyond time. The Presiding Officer, Debt Recovery Tribunal, passed an order rejecting the application for interim relief in the Securitization Application as time barred on 09.09.2008. The petitioner submitted an application along with the affidavit saying that the possession of the property in question was still with the petitioner. On 22.10.2008, the matter was taken up on the question of maintainability of the Securitization Application and the Presiding Officer rejected the same as being not maintainable being time barred. Against such an order, this writ petition has been filed.
7. Sri Prashant Jaiswal, learned counsel for the respondent nos.4 and 5, has referred to his short counter affidavit filed on 26.05.2009 and referred to Section 18 of SARFAESI Act wherein it has been provided that any person aggrieved by the order passed by the Debt Recovery Tribunal, may prefer an Appeal to the Debt Recovery Appellate Tribunal within 30 days from the date of receipt of the order.
8. Learned counsel has also referred to the counter affidavit filed by the Bank wherein the Bank has stated that proper valuation of property was done. The petitioner had been served notice of recovery proceedings and also of possession and sale. The Securitization Application No.104 of 2008 being highly time barred was rejected rightly and that the petitioner had filed Writ Petition No.2624 (M/B) of 2008 against measures taken under Section 13 Sub-Section 4 read with Rule 8 and 9 of the Securitization Act, which writ petition was dismissed by this Court on 24.09.2008, on the ground that the petitioner has statutory remedy of filing the Appeal under Section 18 of the Securitization Act.
9. Learned counsel for the respondent has placed reliance upon the judgments rendered by Hon'ble Supreme Court in Civil Appeal No.1281 of 2018: Authorized Officer, State Bank of Travancore and Another Vs. Mathew K.C., where the Supreme Court after referring to its earlier judgment relating to SARFAESI Act, namely, Punjab National Bank Vs. O.C. Krishnan and others 2001 (6) SCC 569; United Bank of India Vs. Satyawati Tandon and others 2010 (8) SCC 110 and General Manager, Sri Siddeshwara Cooperative Bank Limited and another Vs. Ikbal and others 2013 (10) SCC 83, as well as other judgements like Kanaiyalal Lalchand Sachdev and others Vs. State of Maharashtra and others 2011 (2) SCC 782 and Punjab National Bank and another Vs. Imperial Gift House and others 2013 (14) SCC 622, has observed in paragraphs-16 and 17 as follows:-
"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."
17. 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."
10. This writ petition is dismissed on the grounds of maintainability leaving it open for the petitioner to approach the Debt Recovery Appellate Tribunal under Section 18 of the Act.
Order Date :- 28.7.2021 Rahul