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2012 DIGILAW 1064 (ALL)

ASSET RE-CONSTRUCTION COMPANY (INDIA) v. SHAMKEEN MULTIFAB

2012-05-04

AMITAVA LALA, P.K.S.BAGHEL

body2012
JUDGMENT Hon’ble Amitava Lala, J.—Both the aforesaid writ petitions having been connected with each other have been heard analogously and are being decided by this common judgment and order having binding effect in both the matters. 2. First of all, let us have the brief facts to understand the controversy involved in these writ petitions. 3. Civil Misc. Writ Petition No. 50688 of 2011 (in short called as “first writ petition”) has been filed by the petitioner herein i.e. Asset Reconstruction Company (India) Limited (hereinafter referred to as the “petitioner company”) claiming itself to be the secured creditor of the respondent Nos. 1 and 2 companies, namely, Shamkeen Multifab Limited and Shamkeen Cotsyn Limited (hereinafter referred to as the “respondent company”). When the respondent company made default in repayment of outstanding dues, the petitioner company served notices under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter in short called as the “SARFAESI Act”) upon the respondent company. The respondent company having failed to comply with the notice within the prescribed period, the petitioner company proceeded to take possession of the secured assets of respondent company in exercise of the powers conferred under Section 13 (4) of the SARFAESI Act. Subsequent thereto, the petitioner company filed applications under Section 14 of the SARFAESI Act before the concerned District Magistrate for taking physical possession of the secured assets of respondent company. On the aforesaid applications under Section 14 of the SARFAESI Act, the concerned Additional District Magistrate by its orders dated 24th March, 2011/04th August, 2011 directed the concerned Sub-Divisional Magistrate and Police Officer to take physical possession of the secured assets and handover the same to the petitioner company. However, by a further order dated 17th August, 2011 the concerned Additional District Magistrate directed the concerned Sub-Divisional Magistrate to stay the execution of the aforesaid orders dated 24th March, 2011/04th August, 2011 till the enquiry is completed in the matter or till further orders are passed. Against this background, the first writ petition has been filed by the petitioner company seeking direction upon the respondents to execute the order dated 24th March, 2011 and 04th August, 2011 and handover the secured assets of the respondent company, with a further prayer to direct the respondent authorities to set aside the order dated 17th August, 2011. Against this background, the first writ petition has been filed by the petitioner company seeking direction upon the respondents to execute the order dated 24th March, 2011 and 04th August, 2011 and handover the secured assets of the respondent company, with a further prayer to direct the respondent authorities to set aside the order dated 17th August, 2011. Such writ petition was filed on 01st September, 2011. 4. According to the respondent company, when the aforesaid orders were passed by the district authority under Section 14 of the SARFAESI Act to handover the possession to the petitioner company, at that time stay order granted by the Debt Recovery Tribunal was operative. Therefore, the orders passed under Section 14 are not operative in nature. It has been further contended on behalf of the respondent company that possession was already handed over to the petitioner company, to which the petitioner company has contended that it is symbolic one but no actual physical possession was given. 5. One of the companies of Samkeen Group i.e. Shamken Spinners Limited, which is also referred here as “respondent company” for the sake of clarity, has also filed Civil Misc. Writ Petition No. 48944 of 2011 (in short called the ‘’second writ petition’) by saying that certain landed properties, possession of which have been taken, were not mortgaged at any point of time and therefore, the same do not come under the purview of the SARFAESI Act. In this background, the relief has been sought in the second writ petition to direct the respondents in such writ petition to handover the peaceful possession of such unsecured landed properties to the respondent company and also to direct the concerned Additional District Magistrate to decide the objection of the respondent company being dated 20th August, 2011 within a time bound period. It has also been prayed to get such properties surveyed and demarcated within a time bound period by a competent authority. Such writ petition was filed on 24th August, 2011 when such statement of the respondent company regarding taking possession of some assets, which were not secured, has been recorded in an order of a Division Bench of this Court dated 26th August, 2011. 6. Such writ petition was filed on 24th August, 2011 when such statement of the respondent company regarding taking possession of some assets, which were not secured, has been recorded in an order of a Division Bench of this Court dated 26th August, 2011. 6. During the course of hearing, lot of factual disputes arose with regard to assets and properties when all the parties agreed to have the survey and measurement of the properties, for which District Judge, Mathura was requested by the Court. 7. In any event, though the affidavits are exchanged and several submissions and counter submissions are made on merit even by filing respective affidavits but both the parties, i.e. petitioner company and respondent company, insisted for hearing of the writ petitions of each other on the ground of maintainability having alternative and efficacious remedy before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act. This issue becomes far more important when we find that in a matter between selfsame parties, being Civil Misc. Writ Petition No. 58483 of 2011 (Shamken Multifabs Limited v. State of U.P. and others) a Division Bench of this Court, which has issued the direction on 26th August, 2011 in the second writ petition for giving identification of the property, by its judgment dated 18th October, 2011 held that writ petition is not maintainable. It has become further important when we find that a Division Bench of this Court, presided over by one of us (Amitava Lala, J.), in its judgment Rajendra Ispat Pvt. Ltd. v. State of Uttar Pradesh and others, 2012(1) ADJ 584 (DB) relying upon a Supreme Court judgment in Kanaiyalal Lalchand Sachdev and others v. State of Maharashtra and others, 2011 (2) SCC 782 , held that an action under Section 14 of the SARFAESI 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 such Act. Under Section 17 right of appeal is available to “any person” aggrieved by any of the “measures”. Such words “any person” and “measures” are qualifying the purchasers to raise the issue before the Debt Recovery Tribunal by an appeal under Section 17 of the SARFAESI Act. Under Section 17 right of appeal is available to “any person” aggrieved by any of the “measures”. Such words “any person” and “measures” are qualifying the purchasers to raise the issue before the Debt Recovery Tribunal by an appeal under Section 17 of the SARFAESI Act. Having so, on 01st March, 2012 both the parties agreed that an answer is to be given by this Court on the question of maintainability of the writ petitions and, therefore, the judgment was reserved. 8. From the facts of the first writ petition, we find that admittedly the cause of action giving rise to this writ petition arose out of the orders passed under Section 14 of the SARFAESI Act as the orders dated 24th March, 2011/04th August, 2011, execution whereof has been sought, and also the order dated 17th August, 2011, for which direction has been sought upon the authorities to set aside the same, have been passed in proceedings under Section 14 of the SARFAESI Act after the stage of Section 13 (4) of such Act. Therefore, as per the law laid down by the Supreme Court and this Court in the judgments referred above, remedy of appeal is available to the petitioner company under Section 17 of the SARFAESI Act and accordingly, such relief can be sought for before the Debt Recovery Tribunal but not before the writ Court. Accordingly, having such alternative remedy, the writ petition is not maintainable. 9. So far as second writ petition is concerned, it is in respect of handing over peaceful possession of certain amount of landed properties to the respondent company, after having made survey and demarcation thereof, on the basis of its objection made to the selfsame authority under Section 13 of the SARFAESI Act. According to us, the relief sought for in the second writ petition is either consequential to or interrelated with the relief claimed in the first writ petition. Moreover, the issue involved in this petition cannot be adjudicated upon at this stage by the writ Court without any adjudication by the Debt Recovery Tribunal in the appeal under Section 17 of the SARFAESI Act as such dispute is also arising out of Section 14, in which such objection was made. Moreover, the issue involved in this petition cannot be adjudicated upon at this stage by the writ Court without any adjudication by the Debt Recovery Tribunal in the appeal under Section 17 of the SARFAESI Act as such dispute is also arising out of Section 14, in which such objection was made. Therefore, we are not in a position to pass any independent order ignoring the fact that first writ petition is not maintainable and the subject-matter is required to be heard by the Debt Recovery Tribunal under Section 17 of the SARFAESI Act. 10. Having considered the factual matrix of the writ petitions in the light of the judgments cited by the parties, we are of the view that the writ Court is not the appropriate forum to adjudicate such type of disputes but the Debt Recovery Tribunal is the proper forum following the ratio propounded by the Supreme Court in Kanaiyalal Lalchand Sachdev (supra) and this Court in Rajendra Ispat Pvt. Ltd. (supra). This is also important to note that issue between the parties on that score has already been decided by a Division Bench of this Court on 18th October, 2011 in Shamken Multifabs Limited (supra). 11. Therefore, in totality, both the writ petitions are liable to dismissed being not maintainable and accordingly, the same are dismissed. 12. However, no order is passed as to costs in any of the writ petitions. 13. In any event, passing of this order will in no way affect the right of any of the contesting parties to proceed before the appropriate Court/ forum/ authority independently in accordance with law. Hon’ble P.K.S. Baghel, J.—I agree. ———————