C.R.Ps.
Prayer in C.R.P.No.1673/2009: Civil Revision Petition against the order dated 04.02.2009 passed by Debts Recovery Tribunal II, Chennai in I.A.No.17/2009 in S.A.No.138/2008.
Prayer in C.R.P.No.1674/2009: Civil Revision Petition against the order and decreetal order dated 04.02.2009 passed by Debts Recovery Tribunal II, Chennai in I.A.No.18/2009 in S.A.No.138/2008.
For Petitioners : Mr.V.Lakshminarayanan For Respondent 1 : Mr.Rahul Balaji For Respondent 2 : Mr.Mohd.Raffique for Mr.A.Vijayakumar For R3 and R4 : No Appearance COMMON ORDER (Order of the Court was made by Justice Elipe Dharma Rao) C.R.P.No.1673/2009 has been filed against the order dated 04.02.2009 passed by Debts Recovery Tribunal II, Chennai in I.A.No.17/2009 in S.A.No.138/2008, which was filed to implead the petitioner herein as a party to the proceedings. C.R.P.No.1674/2009 has been filed against the order dated 04.02.2009 passed by Debts Recovery Tribunal II, Chennai in I.A.No.18/2009 in S.A.No.138/2008, which was filed for the appointment of an advocate commissioner to identify the property, which is the subject matter of the proceedings in S.A.No.138/2008.
2. The first respondent is a borrower of the second respondent Bank and alleging non-payment of the dues, the Bank had initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 against the first respondent and had taken possession of the property under section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The said action of the second respondent was challenged by the first respondent/debtor before the Debts Recovery TribunalII, Chennai in S.A.Sr.No.1932/2008 on 04.04.2008, which application was returned by the Tribunal on 26.05.2008 for want of territorial jurisdiction. Aggrieved by the same, the first respondent herein filed C.R.P.No.1834/2008 before this court, which was admitted by this court and stay was also granted staying the SARFAESI proceedings till the issue regarding jurisdiction is decided by the Tribunal. Ultimately, on 18.11.2008, the said revision petition was disposed of by a learned single Judge of this court with the following observations:
"I permit the revision petitioner to raise the question of jurisdiction before the Tribunal and the Tribunal is directed to consider the question of jurisdiction alone, afresh, after giving an opportunity to both sides."
Pursuant to the said order passed by the learned single Judge of this Court, an application was presented before the Tribunal to decide the question of jurisdiction and the Tribunal, after giving opportunity to both parties, by order dated 19.12.2008, has held that it has territorial jurisdiction to entertain the SARFAESI Application and directed the Registry to number the application and post the matter on 19.01.2009, after completion of service. The said application was numbered as S.A.138/2008 and the same is pending consideration before the Tribunal.
3. At this stage, the revision petitioner, a third party to the entire proceedings, has filed two interlocutory applications before the Tribunal in I.A.Nos.17 and 18/2008, praying to implead him as a party to the proceedings and to appoint an Advocate-Commissioner.
4. The contention of the petitioner is that the first respondent company had mortgaged the properties S.Nos.304/1, 302 and 303/2, measuring an extent of 1.96 acres, 76 cents and 40 cents respectively situated at No.201, Aranvayal Village, Tiruvallore District on 16.9.2005 for a sum of Rs.1,60,00,000/=, by depositing the original title deeds and that they came to know that the second respondent Bank has initiated proceedings against the first respondent company under the provisions of SARFAESI Act and has proceeded against the property in S.No.303/1 at Aranvayal village, Tiruvallore District; that the property in S.No.303/1 is lying adjacent to the aforesaid three properties which were mortgaged by the first respondent company with the petitioner and the second respondent Bank, under the guise of the proceedings against the property in S.No.303/1 has proceeded against the aforesaid three properties mortgaged with the petitioner, which were never the subject of mortgage with the second respondent bank at any point of time and the aforesaid three properties are not the secured properties and the second respondent Bank has no right over the same. It has also been pleaded by the petitioner that his right is also involved in the properties and therefore, it is proper to implead them as a party to the proceedings filed by the first respondent against the second respondent bank and further the second respondent bank in collusion with the first respondent is attempting to knock away the properties which have been offered as security to the petitioner by the first respondent and therefore, he is a necessary party to the proceedings. On such pleadings, the petitioner has prayed to implead them as a party to the proceedings in the SA and has also prayed to appoint an Advocate Commissioner to identify the properties, which is the subject matter of SA 18/2008, since identification of the property is crucial.
5. The second respondent Bank has contested both the petitions, stating that the petitioner is not at all a necessary party to the proceedings to decide the issue and if at all the petitioner feels that he is a necessary party to decide the case before the Tribunal, the only course open for him is to invoke the provision of
Section 17 of the SARFAESI Act. Since the Tribunal has dismissed both the petitions by the order dated 04.02.2009, the petitioner has filed the present two civil revision petitions.
6. The second respondent has filed a counter affidavit contending as follows:
The first respondent herein filed S.A.No.138/2008 before Debts Recovery Tribunal II, Chennai and also filed C.R.P.Nos.937 & 938/2009 alleging that the bank had taken possession of S.Nos.304/1, 302 and 303/2 in addition to S.No.303/1. The mortgaged property bears S.No.303/1. The issue raised in the SARFAESI Application as well as in the Civil Revision Petitions is, whether the bank has taken possession of the property comprised in S.Nos.304/1, 302 and 303/2. During the hearing of the said application, the Country Manager of the second respondent bank filed an affidavit stating that the bank had taken possession of S.No.303/1 only, which is the subject matter of the securitisation proceedings and the same is reflected in the notice issued under
section 13(2) of the SARFAESI Act and the possession notice issued under the said Act. It is also stated in the said affidavit that the bank is not in possession of any other property except the property comprised in S.No.303/1, which is mentioned in the notice issued under
section 13(2) of the Act. Pursuant to the direction given by this court in C.R.P.Nos.937 & 938/2009, the Tribunal appointed an advocate commissioner to identify the property mortgaged to the bank in the Industrial Estate belonging to the first respondent herein. The second respondent bank made it clear that the bank does not claim mortgage in respect of S.Nos.302, 303/2 and 304/1 and it does not have possession or control over the said property. It also made it clear that the person who is entitled to possession of the said three survey numbers is only the borrower, who is the owner of the property. The petitioner herein neither has mortgage decree nor does it have an order for sale or possession, except a bare claim of mortgage, which is yet to be adjudicated. Even though the petitioner herein has a right to prefer an application under
section 17 of the SARFAESI Act, the petitioner, without filing the same, has filed the present revision petitions and therefore the revision petitions are not maintainable.
7. Heard the learned counsel appearing on either side.
8. There is no dispute with regard to the fact that the petitioner is a third party to the proceedings initiated by the first respondent/borrower before the Tribunal as against the second respondent Bank and two other co-borrowers. While on the part of the petitioner it has been reiterated that he is a necessary party to the proceedings, on the part of the second respondent Bank it has been argued that the petitioner, who is said to have lent moneys to the first respondent borrower, is not a necessary party to the present proceedings and if it all, the petitioner is aggrieved, he has to take recourse only under
Section 17 of the SARFAESI Act. Therefore, now we have been called upon to decide as to what relief, a third party to the SARFAESI proceedings pending before the Tribunal, is entitled to?
9.
Section 17 of the SARFAESI Act deals with 'right to appeal'. For the sake of better understanding and convenience, we extract hereunder
Section 17(1) of the SARFAESI Act.
"17.Right to Appeal: (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of
section 13 taken by the secured creditor or his authorised officer under this Chapter, (may make an application along with such fee, as may be prescribed), to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken."
10. The Section is very clear and unambiguous that 'any person aggrieved by any of the measures initiated by the secured creditor or his authorised officer under
Section 13(4), may make an application to the Tribunal, along with prescribed fee'.
11. In Mardia Chemicals Ltd. Vs. Union of India (AIR 2004 SC 2371 = (2004) 4 SCC 311), the Honourable Apex Court has held in no uncertain terms that 'the third party, who is aggrieved by the action taken by any bank under
Section 13(4) of the SARFAESI Act can invoke the remedy under
section 17 of the said Act'. The learned counsel appearing for the second respondent Bank has also pressed into service a Division Bench judgment of the Bombay High Court in the case reported in Tradewell Vs. Indian Bank and the State of Maharashtra (2008) 81 SCL 173 wherein the Bombay High Court has held in paragraph No.70 that 'the remedy provided under
section 17 is available to a third party also'. In view of the above legal position, we have no hesitation to hold that any person aggrieved by any of the measures initiated by the secured creditor or his authorised officer under
Section 13(4), may make an application to the Tribunal.
12. In the counter affidavit filed by the second respondent, it has been submitted that during the hearing of the SARFAESI Application, the Country Manager of the second respondent bank filed an affidavit stating that the bank had taken possession of S.No.303/1 only, which is the subject matter of the securitisation proceedings and the same is reflected in the notice issued under
Section 13(2) of the SARFAESI Act and the possession notice issued under the said Act. We perused the notice issued under
Section 13(2) of the Act. The notice is dated 24.07.2007. In the said notice, it is stated as follows:
"All that piece or parcel of lands at No.96, Aranvoyal Village, Tiruvallur Taluk, comprised in Survey No.303/1, of an extent of 2 Acres and 96 cents as per documents (as per actual measurement 3 Acres 7 Cents) together with water courses, easements and all other rights, appurtenant thereto and the half portion in the Well in Survey No.303/2 and bounded on the :
13. It has also been submitted that pursuant to the directions issued by a learned single Judge of this Court in C.R.P.D.Nos.937 and 938 of 2009 filed by the first respondent herein, the Tribunal has appointed an Advocate Commissioner to identify the property mortgaged to the applicant bank in the industrial estate belonging to the first respondent and in execution of the said order, the Commissioner has also submitted his report making it clear that there are other properties than the mortgaged properties present within the industrial estate, admittedly, the other properties of the first respondent are S.Nos.302, 303/2 and 304/1. Therefore, it has been submitted that even though the petitioner has a right to prefer an application under
Section 17 of the SARFAESI Act, the petitioner has chosen not to prefer an application under
Section 17 of the SARFAESI Act, the petitioner has chosen not to prefer an application and therefore, his impleadment petition has been rightly dismissed by the Tribunal. It has further been submitted that since the Advocate Commissioner has already been appointed by the Tribunal, who has also filed his report, the petition filed by the petitioner for appointment of Advocate-Commissioner became infructuous. The second respondent Bank has given an undertaking to give access for the peaceful possession and enjoyment of the three survey Nos.302, 303/2 and 304/1 to the first respondent, being the owner of the said survey numbers and principal borrower of the bank and prayed to dismiss these revision petitions.
14. Be that as it may, since the petitioner, though a third party to the proceedings, can very well invoke the provisions of
Section 17 of the SARFAESI Act, which he has bypassed for no reasons assigned, the Tribunal is right in dismissing the petitions filed by the petitioners and therefore, we see no reason to cause our interference into the well considered and merited orders passed by the Tribunal. We make it clear that we are not expressing any opinion on the merits and demerits of the case and in the event the petitioner prefers the appeal under
Section 17(1), the Tribunal has to decide the case on merits and in accordance with law.
15. For all the reasons stated above and following the judgment of the Honourable Supreme Court of India in the case reported in AIR 2004 SC 2371, since the petitioner has a remedy of appeal before the Tribunal under
section 17 of the SARFAESI Act, we direct the petitioner to file an appeal before the Tribunal, if he is so advised, under
section 17 of the said Act within a period of four weeks from today in which event the Tribunal is directed to take it on file, by condoning the delay, if any, since the time to prefer such an appeal under
Section 17(1) i.e. forty five days from the date on which measures under
Section 13(4) of the SARFAESI Act have been initiated by the secured creditor or his authorised officer, seems to have been lapsed already and dispose of the said appeal together with S.A.No.138/2008 on merits and in accordance with law. The civil revision petitions are disposed of accordingly. No costs. Connected miscellaneous petition is closed.
vsl/Rao To The Presiding Officer Debts Recovery Tribunal-II, Chennai