Court No. - 3
Case :- WRIT - C No. - 7126 of 2021 Petitioner :- Indian Bank (Erstwhile Allahabad Bank) Respondent :- State Of U.P. And 4 Others Counsel for Petitioner :- Habib Ahmad Counsel for Respondent :- C.S.C.
Hon'ble Naheed Ara Moonis,J. Hon'ble Saumitra Dayal Singh,J.
Heard Shri Habib Ahmad, learned counsel for the petitioner and Shri B.P. Singh Kachhawah, learned Standing Counsel for the State.
This petition has been filed by the Bank seeking a direction in the nature of mandamus for timely conclusion of the proceedings under Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as an 'SARFAESI Act') being Case No. 3878 of 2018 (Allahabad Bank vs. Sushmita Srivastava and others).
Submission of learned counsel for the petitioner is that the proceedings under Section 13 of the Act had been concluded on 24.11.2017. Thereafter, the petitioner had filed an application dated 23.01.2018 under Section 14 of the Act before the District Magistrate, Gorakhpur to secure the physical possession of the secured asset, but the same has remained pending for more than three and a half years. He further submits that the first proviso to Section 14 of the SARFAESI Act clearly provides a time period of 30 days for concluding those proceedings. In any case, the second proviso thereto provides for an extension of that time period to 60 days, for reasons recorded in writing.
That being the clear mandate of the law, all efforts should be made by the concerned to ensure strict compliance, so that the proceedings under Section 14 of the Act are concluded, within a period of 60 days from the date of filing of such application.
While the Act requires recording of reasons beyond delay of 30 days, we feel that in the event of delay beyond 60 days, the matter should be monitored by the concerned District Magistrate. The reasons for delay should be regularly examined and necessary directions issued in writing to ensure full/effective compliance of the law.
The Apex Court in C.Bright vs. The District Collector & Ors. 2020 AIR SC 5747 has held as under:-
"20. The Act was enacted to provide a machinery for empowering banks and financial institutions, so that they may have the power to take possession of secured assets and to sell them. The DRT Act was first enacted to streamline the recovery of public dues but the proceedings under the said Act have not given desirous results. Therefore, the Act in question was enacted. This Court in Mardia Chemical, Transcore and Hindon Forge Private Limited has held that the purpose of the Act pertains to the speedy recovery of dues, by banks and financial institutions. The true intention of the Legislature is a determining factor herein. Keeping the objective of the Act in mind, the time limit to take action by the District Magistrate has been fixed to impress upon the authority to take possession of the secured assets. However, inability to take possession within time limit does not render the District Magistrate Functus Officio. The secured creditor has no control over the District Magistrate who is exercising jurisdiction under Section 14 of the Act for public good to facilitate recovery of public dues. Therefore, Section 14 of the Act is not to be interpreted literally without considering the object and purpose of the Act. If any other interpretation is placed upon the language of Section 14, it would be contrary to the purpose of the Act. The time limit is to instill a confidence in creditors that the District Magistrate will make an at- tempt to deliver possession as well as to impose a duty on the Dis- trict Magistrate to make an earnest effort to comply with the man- date of the statute to deliver the possession within 30 days and for reasons to be recorded within 60 days. In this light, the remedy under Section 14 of the Act is not rendered redundant if the Dis- trict Magistrate is unable to handover the possession. The District Magistrate will still be enjoined upon, the duty to facilitate delivery of possession at the earliest."
Since, large number of matters are coming up before this Court on regular basis, wherein, repeatedly banks are seeking directions of this Court to conclude the proceedings under Section 14 of the Act, we find that the trend thus developing runs against the statutory scheme as explained by the Supreme Court in the decision of C.Bright (Supra).
Accordingly, we dispose of the writ petition with a direction that the instant proceedings be concluded necessarily within a period 30 days' unless there is any legal impediment in the nature of any stay order obtained by the competent court.
In view of large number of petitions coming up before this Court, we issue a direction to all the District Magistrates in the State of U.P. to keep a record/register of all the pending applications filed under Section 14 of the Act that may clearly disclose to the District Magistrate (on a fortnightly basis) details of all institutions of such applications made in that district and their disposal within that time.
The said register may be duly inspected by the District Magistrate from time to time and also countersigned by him. Based on the entries recorded in such register, a quarterly report of all institution of applications filed under Section 14 of the Act together with the length of pendency of each application be sent to the Registrar General of this Court in the tabular form that may indicate the requirement of the Act is being fulfilled, in letter and spirit, who shall place the same before the appropriate Committee dealing with the functioning of the Debt Recovery Tribunals and Debt Recovery Appellate Tribunals.
The above direction has become necessary because at present, it appears that generally the proceedings for obtaining actual physical possession are being delayed much beyond the time limit set by the statute. It creates avoidable litigation and defeats the very object of the Act.
Let a copy of this order be communicated by the Registrar General to the Chief Secretary, Government of Uttar Pradesh for further intimation and compliance by all the District Magistrates in the State of U.P and the Debt Recovery Appellate Tribunal, Prayagraj. Also, let a copy of this order be placed before the appropriate Committee dealing with the functioning of the Debt Recovery Tribunals and Debt Recovery Appellate Tribunals.
Order Date :- 24.8.2021 Saurabh