Balaji Food Processing Industry, Bangalore v. Bank of Maharashtra
2015-09-26
A.S.BOPANNA
body2015
DigiLaw.ai
JUDGMENT : 1. The petitioner is before this Court assailing the order dated 27.01.2015 passed in Crl. Misc. No.8876 / 2014. The said order is passed in exercise of the power under Section 14 of the Securitization Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act for short) 2. The petitioner while assailing the said order has raised several contentions on merits to oppose the same. The first respondent has filed a detailed objection statement opposing the contentions put forth in the petition. 3. Though contentions on merits have been raised by both the parties, the fact that an appeal to the Debts Recovery Tribunal (‘DRT’ for short) is provided under Section 17 of the SARFAESI Act is evident from the provision contained therein. However, in view of the DRT disposing of the appeals in several cases on taking note of the observation made by the Hon’ble Supreme Court made in the case of Harshad Govardhan Sondagar vs Internataional Assets reconstruction company Limited and Others (2014) 6 SCC 1 , it is necessary to clarify the position so as to enable the petitioner to file an appeal and to direct the DRT to entertain such appeal on merits. 4. in that regard, a perusal of the judgment in the case of Harshad Govadhan Sondagar (supra) would indicate that the consideration made therein by Hon’ble supreme Court was while taking note of the contentions which had been put forth on behalf of tenants of the premises regarding which the proceedings under Section 13 and 14 of the SARFAESI Act was taken. Even in the said judgment, there is indication with regard to the right available to any person who approaches the DRT in an appeal under Section 17 of the SARFAESI act. Even otherwise, the Hon’ble Supreme Court in the decision rendered in the case of Kanaiyalal Lalchand sachdev & Others vs State of Maharashtra and Others (2011) 2 SCC 782 ) in para 22 has held as hereunder: “22. We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the 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 the Act.
We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the 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 the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT”. 5. Further, the Hon’ble supreme Court while dealing with the case in Standard Chartered Bank vs V.Noble Kumar and Others (2013) 9 SCC 620 has also taken into consideration the scope of the appeal provided under section 17 of the SARFAFESI Act and has held that when the proceedings under section 13 and 14 of the SARFAESI Act is taken by the financial institutions, the person claiming to be aggrieved would have to file an appeal as provided under the Act. 6. In that view, when a borrower or guarantor in respect of the loan or any other person other than the tenant claiming right in respect of the property is seeking to assail the action under sections 13 and 14 of the SARFAESI Act, in view of the law laid down by Hon’ble supreme Court, the appeal as provided under Section 17 of the SARFAESI Act is to be considered as an alternate and efficacious remedy provided under the SARFAESI Act. Hence, the DRT would have to entertain the appeal in such maters to consider the contentions on merits and take a decision one way or the other in accordance with law. 7. in that light, in the instant case, since the petitioner is a borrower against whom the proceedings under sections 13 and 14 of the Act has been initiated, the appeal would be maintainable. 8. The petition is accordingly disposed of, with liberty to the petitioner to file the appeal before the DRT. Since the petitioner had the benefit of the interim order, the same benefit shall continue for a period of three weeks, subject to the petitioner filing an appeal within the said period and the period spent before this court be considered while computing the limitation.