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2015 DIGILAW 650 (GUJ)

Chetan Coach Pvt. Ltd. v. Axis Bank Limited

2015-06-29

R.M.CHHAYA

body2015
ORDER : R.M. Chhaya, J. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following relief(s): "(A) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or directions quashing and setting aside the impugned order dated 01.01.2015 passed by the respondent District Collector (at Annexure-L hereto); (B) During the pendency and final disposal of the present petition, YOUR LORDSHIPS may be pleased to stay operation, implementation and execution of the impugned order dated 01.01.2015 passed by respondent - District Collector (at Annexure-L hereto); (C) ***" 2. The following noteworthy facts emerge from the record of the petition : 2.1. The petitioner had taken advance from the respondent Bank in form of cash credit. The account of the petitioner Company was classified as nonperforming asset on 26.02.2012 as per the norms of the Reserve Bank of India. It appears from the record that the respondent-Bank called upon the petitioner Company to pay the outstanding, however, as there was failure on part of the petitioner, the respondent bank resorted to the proceedings as provided under the Securitization and Reconstruction of Financial asset & Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act" for short) and accordingly, issued a notice as provided under Section 13(2) of the Act dated 12.05.2012. 2.2 The petitioner gave a reply to the same. However, the respondent-Bank took symbolic possession of the secured asset and also took actual possession. The petitioner challenged the same by way of filing a Securitisation Application as provided under Section 17 of the Act, which came to be registered as Securitisation Application No.88 of 2012 before learned Debts Recovery Tribunal, Ahmedabad (hereinafter referred to as "the Tribunal" for short). Learned Tribunal was pleased to allow the said application and quashed the proceedings initiated by the respondent-Bank with cost of Rs.10,000/- and also directed the bank to handover the physical possession of the property. 2.3 The respondent Bank had also filed an application under Section 14 of the Act before District Magistrate, Bharuch, which came to be rejected vide order dated 09.03.2013 on the ground that as the actions under the Act have been quashed by the learned Tribunal and as no further steps are taken by the respondent Bank, the application was rejected. 2.3 The respondent Bank had also filed an application under Section 14 of the Act before District Magistrate, Bharuch, which came to be rejected vide order dated 09.03.2013 on the ground that as the actions under the Act have been quashed by the learned Tribunal and as no further steps are taken by the respondent Bank, the application was rejected. 2.4 Thereafter, the respondent - Bank issued a fresh notice withdrawing earlier notice as provided under Section 13(2) of the Act on 17.02.02014. The said notice was replied and the objections were raised by the petitioner on 11.04.2014. At that stage, the respondent Bank filed an application under Section 14 of the Act before learned District Magistrate, Bharuch as the secured asset is situated within the jurisdiction of learned District Magistrate, Bharuch, whereby it is mentioned by the respondent Bank that the amount of Rs.2,17,34,983.16/- with interest is due and payable from 17.02.2014. The said application as well as the affidavit is the forming part of the record of this petition. 2.5 It further appears from the record of the petition that the petitioner filed their reply to the said application. Thereafter, the District Magistrate, Bharuch, vide impugned order dated 01.01.2015 was pleased to allow the said application under Section 14 of the Act, and being aggrieved by the said order, present petition is filed by the petitioner. 2.6 It may be noted that the record shows that the petitioner has filed an application under Section 19 of the Act against the respondent Bank and have claimed damages of Rs.192.84 lacs and the same is pending before the learned Tribunal. 3. This Court [Coram: Hon'ble Mr.Justice R.H.Shukla] has passed the following order on 16.02.2015 : "Heard learned advocate, Shri S.P. Majmudar for the petitioner. In view of the contentions raised that fresh notice under Section 13(4) of the Securitisation & Reconstruction of Financial asset & Enforcement of Security Interest Act, 2002 has not been issued, Notice to the respondents returnable on 2nd March, 2015. Ad interim relief in terms of Para No.21(B) till then. Direct service is permitted." 4. In response to the notice issued by this Court, the respondent Bank has filed an Affidavit-in-Reply and has denied the contentions raised by the petitioner. Ad interim relief in terms of Para No.21(B) till then. Direct service is permitted." 4. In response to the notice issued by this Court, the respondent Bank has filed an Affidavit-in-Reply and has denied the contentions raised by the petitioner. It is stated by the respondent Bank that the petitioner company failed to make the payment as promised by them through letters dated 14.05.2012, 27.06.2012, 04.07.2012, 27.07.2012 and 29.08.2012. Supporting the impugned order passed by District Magistrate, Bharuch, it is stated that the authorised officer viz. Shri Jitendra Vala was holding a post of Assistant Vice President at the time of filing an application under Section 14 of the Act before the District Magistrate. It is also contended that the objections raised by the petitioner on 11.04.2014 was properly replied and dealt with by the respondent Bank by its reply dated 25.04.2012. It is further contended that even thereafter, the petitioner as well as the respondent Bank have exchanged letters dated 07.01.2015 and 09.01.2015 and the respondent Bank has also held personal meeting with the representative of the petitioner Company. The respondent Bank has also annexed correspondence dated 09.01.2015 to bring on record the fact that at the request of the petitioner Company made on 07.01.2015, the respondent Bank had preferred not to take physical possession of the factory till 21.01.2015 and requested the petitioner Company to deposit substantial upfront payment while submitting concrete proposal of payment of the dues. The petitioner Company has filed its rejoinder and has denied the contentions raised by the petitioner in its reply. 5. It is noteworthy that the respondent Bank has also filed further additional affidavit and has brought on record the relevant documents, on basis of which, the petitioner Company was granted advance including copy of equitable mortgage. 6. Heard Mr. S.P. Majmudar, learned counsel for the petitioner, Mr. Mihir Joshi, learned Senior Counsel for Mr. Anip Gandhi, learned counsel for respondent No.1Axis Bank and Mr.Tirthraj Pandya, learned Assistant Government Pleader for respondent No.2 Collector and District Magistrate, Bharuch. 7. Learned counsel for the petitioner has taken this Court through the factual matrix arising in this matter. He has raised the following contentions and has also submitted written submissions dated 22.06.2015 : (I) That the authorised person of the respondent Bank Shri Jitendra Vala is only a Manager. 7. Learned counsel for the petitioner has taken this Court through the factual matrix arising in this matter. He has raised the following contentions and has also submitted written submissions dated 22.06.2015 : (I) That the authorised person of the respondent Bank Shri Jitendra Vala is only a Manager. On basis of copy of Power of Attorney given in favour of Shri Vala by the respondent Bank, it was pointed out that Shri Vala is presently only a Manager. (II) Relying upon the provisions of Section 14(1) (a) of the Act read with Rule 2( a) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as "the Rules" for short), it was contended that Shri Vala only being a Manager, cannot be an authorised officer. It was specifically contended by learned counsel for the petitioner that as Mr. Vala, Power of Attorney of the respondent Bank was only a Manager and not Chief Manager, he was not competent to file an application under Section 14 of the Act. (iii) It was contended that the application under Section 14 of the Act filed by the respondent Bank on 23.05.2014 does not comply with proviso(i) of Section 14 of the Act. That the aggregate amount mentioned in the said application is not the aggregate amount. (iv) Similarly, relying upon sub clause(7), first proviso to Section 14 of the Act, it was contended that the respondent Bank has not disclosed that the objections filed by the petitioner were received and how they were considered. It was submitted that it is fatal and as such requirement is not disclosed and learned Magistrate while passing the impugned order, has overlooked such fatal defect. (v) It was contended that reply to Section 13(2) of the Act is only safeguard and therefore, the respondent Bank is duty bound to consider the same. (vi) It was contended that requirements of Section 14 of the Act are violated. That the action taken under Section 14 of the Act without issuance notice under Section 13(4) are illegal and are taken deliberately in order to see that the steps under Section 13(4) of the Act are not tested before learned Debts Recovery Tribunal and notice under Section 13(4) of the Act is not given. That the action taken under Section 14 of the Act without issuance notice under Section 13(4) are illegal and are taken deliberately in order to see that the steps under Section 13(4) of the Act are not tested before learned Debts Recovery Tribunal and notice under Section 13(4) of the Act is not given. It was also contended that Section 14 of the Act can be resorted only when possession is resisted and the procedure as prescribed under Rule4 is violated. (vii) It was contended that if the impugned order passed by the District Magistrate under Section 14 of the Act is upheld, Section 13(4) notice would be redundant and Section 17 of the Act remedy would never be available. (viii) As an alternative submission, it was contended by learned counsel for the petitioner that the petitioner be permitted to challenge the impugned order before the learned Tribunal within one week and all points can be considered and the stay granted earlier, may be extended by this Court to enable the petitioner to approach the learned Tribunal. 8. It may be noted that after the oral submissions were over, learned counsel for the petitioner submitted written submissions which are taken on record. The contention raised in the written submissions are more or less repetition of the contentions orally raised by learned counsel for the petitioner and other additional submissions made in the written submissions are also dealt with herein below. Learned counsel for the petitioner has relied upon the following judgments in support of the aforesaid contentions raised: (I) Manjudevi R. Somani v. Union of India, 2013 (2) GLH 390 . (II) Kanaiyalal Lalchand Sachdev & Ors. v. State of Maharashtra & Ors., (2011) 2 SCC 782 . (III)Harshad Govardhan Sondagar v. International asset Reconstruction Company Limited & Ors., (2014) 6 SCC 1 . (IV) IDBI Bank v. Hytaisun Magnetics Ltd. & Ors., 2011 (2) GLR 1438 . (V) Mathew Verghese v. M. Amritha Kumar & Ors., (2014) 5 SCC 610 . 9. Per contra, Mr. Mihir Joshi, learned Senior Counsel on behalf of Mr. Anip Gandhi, learned counsel for respondent No.1Bank has contended that the contention raised by the petitioner that the procedure as prescribed under Section 14 of the Act is violated, is misconceived and contrary to the record. 9. Per contra, Mr. Mihir Joshi, learned Senior Counsel on behalf of Mr. Anip Gandhi, learned counsel for respondent No.1Bank has contended that the contention raised by the petitioner that the procedure as prescribed under Section 14 of the Act is violated, is misconceived and contrary to the record. It was contended that in the application as well as in the Affidavit-in-Reply, more particularly in the affidavit filed as per the provisions of Section 14 of the Act, the respondent Bank has clearly mentioned the amount due and payable by the petitioner. It was also contended that as such the said contention was not raised by the petitioner before the District Magistrate and therefore, he cannot be permitted to raise the same for the first time before this Court. It was also contended that the contention raised that Mr. Vala cannot be an authorised person of the respondent Bank is contrary to the record as when the application was filed under Section 14 of the Act, Mr. Vala was Asst. Vice President. It was contended that subsection (4) of Section 13 of the Act is a measure, which the Bank or a secured creditor can take recourse on failure of borrower to discharge his liability in full within prescribed time limit. 10. It was further contended that as provided under Section 13(4) of the Act, measures, being taking over possession, as such Section 14 of the Act facilitates the secured credit to take such measure when there is resistance for the same and therefore, Section 14 of the Act, application can be filed after giving notice under Section 13(2) of the Act. It was pointed out that conduct of the petitioner as per the record clearly establishes the fact that except the promises, no concrete proposal has ever been given by the petitioner. It was contended that the application under Section 14 of the Act is in accordance with the provisions of the Act and the Rules and there is no breach of any of the provisions. It was contended by Mr. Joshi that except the dilatory tactics, the petitioner has no intention to comply with the notice under Section 13(2) of the Act. Relying upon the affidavit, it was contended that all the requirements of the Act and the Rules are fulfilled by the respondent Bank. It was contended by Mr. Joshi that except the dilatory tactics, the petitioner has no intention to comply with the notice under Section 13(2) of the Act. Relying upon the affidavit, it was contended that all the requirements of the Act and the Rules are fulfilled by the respondent Bank. Even the objections raised by the petitioner are duly considered as provided under the first proviso of Section 14 of the Act. Learned Senior counsel for the respondent Bank has relied upon the following judgments: (I) Manjudevi R. Somani v. Union of India, 2013 (2) GLH 390 . (II) Chartered Bank v. V. Noble Kumar & Ors., (2013) 9 SCC 620 . 11. Mr. Tirthraj Pandya, learned Assistant Government Pleader has supported the order dated 01.01.2015 passed by the District Magistrate and has submitted that the said order is in accordance with the provisions of the Act and as per the binding decisions of the Division Bench of this Court. No other and further submissions are made by learned counsel for the parties. 12. Considering the submissions made by learned counsel for the parties as well as on perusal of the impugned order, it clearly transpires that the petitioner took advance from the respondent Bank and that such amount is due and payable. On examining the contentions raised by learned counsel for the petitioner, more particularly as regards the defective application, it deserves to be noted that though the power of attorney given by the respondent Bank in favour of Shri Jitendra Vala states Manager, it may be noted that said power of attorney was executed on 23.02.2010 and in the affidavit filed by the respondent Bank dated 16.03.2015, it is clearly stated on oath that Shri Jitendra Vala was holding a post of Assistant Vice President at the time of filing of an application under Section 14 of the Act before the District Magistrate i.e. on 23.05.2014. The said averment made on oath is just denied. However, there is no material on record even prima facie to establish that Shri Vala was not competent to be an authorised officer. In light of the aforesaid factual background, it cannot be said that Shri Jitendra Vala was not an authorised officer as defined under Rule 2( a) of the said Rules. However, there is no material on record even prima facie to establish that Shri Vala was not competent to be an authorised officer. In light of the aforesaid factual background, it cannot be said that Shri Jitendra Vala was not an authorised officer as defined under Rule 2( a) of the said Rules. The definition of word "authorised officer" given in the said Rules is not just restricted to a cadre or post of Chief Manager, but it also includes equivalent officer as well as any other person or authority exercising powers of Superintendence, direction and control of the business or affairs of the secured creditors. In light of the aforesaid, the said contention raised by learned counsel for the petitioner deserves to be negatived. 13. The contention raised by learned counsel for the petitioner that the objections filed in response to the notice dated 17.02.2014 given by the respondent Bank is not replied, is found to be factually incorrect. In paragraph No.13 of the application filed by the respondent Bank before the District Magistrate, it is clearly mentioned that the representation dated 11.04.2014 filed by the petitioner against the notice dated 17.02.2014 was considered and disposed of vide letter dated 25.04.2014 and the respondent in reply to the application filed by the petitioner before the District Magistrate has impliedly admitted the fact that the representation filed by the petitioner was replied. It is also further stated that the same was duly served upon the petitioner by registered post A.D. and the proof of postal acknowledgement is forming part of the record of the application filed by the respondent Bank under Section 14 of the Act before the District Magistrate. In light of the same, the said contention also deserves to be negatived. It may further be noted in paragraph No. 17 of the application filed by the respondent Bank that the respondent Bank has mentioned that "as on date of filing of the application under Section 14 of the Act, sum of Rs.2,17,34,983.16/- is due and payable". The said paragraph is reproduced herein below : "17. It may further be noted in paragraph No. 17 of the application filed by the respondent Bank that the respondent Bank has mentioned that "as on date of filing of the application under Section 14 of the Act, sum of Rs.2,17,34,983.16/- is due and payable". The said paragraph is reproduced herein below : "17. I say that the total outstanding dues in respect of the aforesaid facilities as on the date of filing this Application under section 14 SARFAESI Act are Rs.2,17,34,983.16/- (Rupees Two Crores Seventeen Lakhs Thirty Four Thousand Nine Hundred Eighty Three Paisa Sixteen) (after giving adjustment of the moneys repaid by the Borrower/after adjusting the margin money held by the Applicant after service of demand notice) and further interest from the 17.02.2014." 14. In light of the aforesaid clear averments in the application, it cannot be said that there is any violation of requirement of Section 14 of the Act. In fact, as enumerated herein above, it was disclosed by the respondent Bank before the District Magistrate and therefore, it cannot be said that the District Magistrate has overlooked the same while passing the order. Thus, there is no defect much less any fatal defect as contended by the petitioner. In the facts and circumstances, it cannot be presumed and/or said that requirement of Section 14 of the Act are not strictly complied with. 15. Considering the provisions of Sections 13 and 14 of the Act, issuance of notice under Section 13(2) of the Act is as such first step towards the measures for recovery. The said provisions clearly provide that "where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment". On bare reading of the notice under Section 13(2) of the Act, it clearly provides that the account of the petitioner was classified as nonperforming asset since 26.02.2012 and that the petitioner has made default in repayment of the secured debt. On bare reading of the notice under Section 13(2) of the Act, it clearly provides that the account of the petitioner was classified as nonperforming asset since 26.02.2012 and that the petitioner has made default in repayment of the secured debt. The petitioner by said notice as provided under Section 13(2) of the Act is put to notice to make payment within stipulated period of 60 days, failing which, respondent No.1 Bank would be constrained to revoke the provisions thereof and more particularly, as provided under Section 13(4) of the Act and take possession of the property mortgaged to the respondent Bank including take over of management or the business of the petitioner. 16. At this juncture, it would be appropriate to note that the petitioner has availed credit facility as enumerated in paragraph No.2 of the additional affidavit filed by the respondent Bank dated 25.04.2015. The petitioner has also produced on record all the resolutions passed by the petitioner Company as well as the copy of the memorandum of entry, which is duly signed by the authorised Director of the petitioner Company. 17. On examining the above documents, even after issuance of notice under Section 13(2) of the Act and conduct of the petitioner, it clearly reveals from the letter of the petitioner dated 07.01.2015 (at Annexure-I to the affidavit in reply filed by the respondent Bank). The respondent Bank relying upon such stand taken by the petitioner, did not take physical possession of the factory and till date, except the meetings and promises, the petitioner has not shown any endeavour to make payment of dues of the respondent bank and in fact, has resisted action of the respondent Bank to take possession of the secured asset. 18. As held by the Apex Court in the case of Indian Bank v. Blue Jaggers Estate Ltd., reported in (2010) 8 SCC 129 , the respondent Bank, as a trustee of the public fund, is duty bound to recover the amount by adopting all legal permissible methods. 18. As held by the Apex Court in the case of Indian Bank v. Blue Jaggers Estate Ltd., reported in (2010) 8 SCC 129 , the respondent Bank, as a trustee of the public fund, is duty bound to recover the amount by adopting all legal permissible methods. Section 14 of the Act is an independent provision through which a secured creditor can have an assistance in taking possession of the secured asset of the borrower and as rightly contended by learned counsel for the respondent Bank that taking possession of the secured asset of the borrower is one such measure as provided under Section 13(4) of the Act and therefore, it clearly transpires that in order to take action upon the borrower, the secured creditor under Section 13(2) of the Act can take recourse to take possession of the secured asset of the borrower and in order to undertake that exercise, the secured creditor can resort to the proceedings under Section 14 of the Act. The contention therefore, to the effect that Section 14 cannot be resorted to without issuing notice under Section 13(4) of the Act, deserves to be negatived. The contention of learned counsel for the petitioner that deliberately in order to see that Section 13(4) of the Act is not tested before the learned Tribunal, notice under Section 13(4) of the Act is not given by the Bank, also deserves to be negatived. Rule4 of the said Rules cannot be interpreted to mean that the secured creditor cannot take assistance as provided under Section 14 of the Act before issuance of notice under Section 13(4) of the Act. The contention raised by the petitioner that if the impugned order is permitted to be implemented right to appeal as provided under Section 17 of the Act would become redundant, also deserves to be negatived. Section 17 of the Act provides that 'any person (including borrower) aggrieved by any of the measures referred to in subsection (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 have been taken. Measures as provided under Section 13(4) of the Act are (1) take possession of the secured asset of the borrower etc. and (2) take over the management or business of the borrower etc. Therefore, it cannot be said that provisions of Section 17 of the Act would become redundant on possession being taken by the secured creditor. In fact, in case of the petitioner himself, when earlier the respondent Bank took possession, the same was challenged by the petitioner under Section 17 of the Act before the learned Tribunal. 19. Relying upon the judgment of the Apex Court in the case of Kanaiyalal Lalchand Sachdev (supra), as an alternative submission it was contended by learned counsel for the petitioner that the petitioner be permitted to approach the learned Debts Recovery Tribunal under Section 17 of the Act by way of filing Securitization Appeal and that ad interim relief granted earlier by this Court, be continued for a week to enable the petitioner to do so. It requires to be noted that the petitioner has filed this petition on 11.02.2015 and this Court has protected the petitioner vide order dated 16.02.2015. Having approached this Court by this petition, at the end of hearing the petitioner has made this submission. Considering the ratio laid down in the case of Harshad Govardhan Sondagar (supra), more particularly as per the observations made by the Apex Court in paragraph No.29 thereof and considering the conduct of the petitioner, said contention deserves to be negatived. 20. It was contended on behalf of the petitioner that the account of the petitioner Company has been wrongly classified as nonperforming asset by the respondent Bank in the contravention of the guidelines issued by the Reserve Bank of India. Such contention deserves to be dismissed outright, inasmuch as that there is no factual basis for the same. in Addition to that the conduct of the petitioner clearly establishes the fact that the amount is due and payable and in fact, the petitioner has promised to bring a buyer which admittedly has been breached by the petitioner. The money advanced by the petitioner is out of public funds. The petitioner cannot be permitted to throttle the efforts made by the respondent Bank to recover the amount due and payable in accordance with law. The money advanced by the petitioner is out of public funds. The petitioner cannot be permitted to throttle the efforts made by the respondent Bank to recover the amount due and payable in accordance with law. Hence, the contention regarding the account of the petitioner Company has been wrongly classified as Nonperforming asset deserves to be negatived. Further contention raised by the petitioner to the effect that no further steps are taken after the order dated 14.12.2012. When examined the facts of this case, it clearly shows that the notice at Annexure A to this petition issued by the respondent Bank under Section 13(2) of the Act on 17.02.2014 and as the said contention is also meritless. The further contention to the effect that O.A. No. 114 of 2013 is pending before DRT, Ahmedabad-II and as there is no adjudication of alleged dues, the respondent Bank ought not to have proceeded further with the proceedings under the Act also is meritless in light of the ratio laid down by the Apex Court in the case of Standard Chartered Bank v. V. Noble Kumar & Ors., (2013) 9 SCC 620 . The order passed by the DRT in S.A. No. 88 of 2012 relates to the earlier demand notice dated 12.05.2012 and in Paragraph No. 18 of the affidavit filed before the District Magistrate, there is a clear mentioned about the same. 21. Record clearly indicates that this petition is filed against the order passed under Section 14 of the Act, which has preceded a notice under Section 13(2) of the Act. The notice itself clearly recites that there is resistance on part of the petitioner to handover the possession of the secured asset and therefore, the contention that the proceedings under Section 14 of the Act can be resorted only when peaceful possession is not handed over at the time of issuance of Notice under Section 13(2) of the Act, also deserves to be negatived. 22. As observed herein above, taking over possession is a measure as provided under Section 13(4) of the Act and hence, Section 14 of the Act application can be filed to enable the secured creditor to take such measure as envisaged under Section 13(4) of the Act and therefore, the contention that Rule 8(1) is not complied with also deserves to be negatived. The contention raised to the effect that the application is not in the prescribed format and the said application is filed under Section 14 of the Act is contrary to the provisions of the Act and that the same is properly, stand deserve to be negatived. Record indicates that no such contention is raised before the Tribunal and as such the petitioner cannot be permitted to raise in this petition under Article 226 and 227 of the Constitution of India for the first time. 23. Learned counsel for the petitioner has relied upon the Division Bench's judgment of this Court rendered in the case of Manjudevi R. Somani (supra). In the facts of the present case, requirements as held in the above cited judgment, have been complied with and therefore, said judgment is of no assistance of the petitioner. 24. In view of the above, in the instant case the respondent Bank found it difficult to take possession of the secured asset and hence, has rightly approached the District Magistrate under Section 14 of the Act and therefore, the judgment relied upon by learned counsel for the petitioner rendered in the case of IDBI Bank Limited v. Hytaisun Magnetics Ltd. & Ors. is of no assistance of the petitioner and would not be applicable to the facts of the present case. Similarly, the judgment relied upon by learned counsel for the petitioner passed in Special Civil Application No. 11494 of 2014 is also not applicable to the present case as the same was a consent order and was passed on the facts regarding lack of jurisdiction in the concerned District Magistrate. Such is not a case in the present petition. The application filed by the respondent Bank under Section 14 of the Act which is on record is in consonance with the provisions of the Act the Rules and hence, the judgment rendered by this Court in Special Civil Application No.3780 of 2014 would be of no assistance to the petitioner. 25. Learned counsel for the petitioner has relied upon the case of Mathew Verghese (supra) and has contended that in the case, there is frustration of right of the petitioner. In the instant case, it cannot be said that all the steps taken by the respondent Bank infringe any constitutional or human right of the petitioner and therefore, the same is not applicable. 26. In the instant case, it cannot be said that all the steps taken by the respondent Bank infringe any constitutional or human right of the petitioner and therefore, the same is not applicable. 26. The judgment cited by learned Senior Counsel for the respondent Bank rendered in the case of Standard Chartered Bank (supra), answers majority of the contentions raised by learned counsel for the petitioner. The Apex Court in this judgment has observed thus: "14. Section 13(1) enables the secured creditor to enforce a security interest which such creditor has in a secured asset without intervention of the Court or Tribunal. The expression "security interest" is defined under Section 2(zf) as follows: "2. (zf) 'security interest' means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in Section 31;" 15. Subsection (2) authorises the secured creditor to exercise any of the rights under subsection (4). Subsection (2) reads as follows: "13. (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as nonperforming asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4)." It can be seen from the said subsection that for the secured creditor to take possession of the secured assets, the following conditions must be satisfied: (i) That there must be a security agreement which creates the liability of the borrower to make repayment to the secured creditor of the secured debt; (ii)The secured creditor is required to demand the borrower by notice in writing to discharge the full liability within a period of 60 days from the date of the notice. 16. Subsection (3) stipulates that such notice shall give the details of (i) the amount payable by the borrower, (ii) the interest in the secured asset intended to be enforced by the secured creditor. 16. Subsection (3) stipulates that such notice shall give the details of (i) the amount payable by the borrower, (ii) the interest in the secured asset intended to be enforced by the secured creditor. Subsection (4) provides for various measures which can be resorted to by the secured creditor in order to recover his debt. Such measures are (1) taking possession of the secured asset, or (2) taking over the management of the business of the borrower. The secured creditor is also given the right either to make a further assignment of his interest or lease out the secured assets or sell the same in order to realise his debt. Such right of the secured creditor is hedged with limitations/safeguards designed to protect the interest of the borrower so that the secured creditor may not abuse his rights i.e. except to take possession of the property and alienate the same only to the extent necessary to realise the actual amount due to him. Details of which may not be necessary for the purpose of this case. We are only concerned in this case with the method and manner in which possession of the secured assets could be obtained and the conditions precedent that are required to be satisfied for taking possession of the secured assets. 17. Section 13, as originally enacted, did not contain any provision for consideration of objections (if any) the borrower may have to the demand made under subsection (2). However, this Court in Mardia Chemicals Ltd. v. Union of India, where the constitutionality of the Act fell for the consideration of this Court, noticed that Section 13(2) is a very stringent provision and opined: (SCC pp. 36061, para 77) "77. It is also true that till the stage of making of the demand and notice under Section 13(2) of the Act, no hearing can be claimed for by the borrower. But looking to the stringent nature of measures to be taken without intervention of court with a bar to approach the court or any other forum at that stage, it becomes only reasonable that the secured creditor must bear in mind the say of the borrower before such a process of recovery is initiated so as to demonstrate that the reply of the borrower to the notice under Section 13(2) of the Act has been considered applying mind to it. The reasons, howsoever brief they may be, for not accepting the objections, if raised in the reply, must be communicated to the borrower. True, presumption is in favour of validity of an enactment and a legislation may not be declared unconstitutional lightly more so, in the matters relating to fiscal and economic policies resorted to in the public interest, but while resorting to such legislation it would be necessary to see that the persons aggrieved get a fair deal at the hands of those who have been vested with the powers to enforce drastic steps to make recovery." 18. Consequent upon the said decision in Mardia Chemicals Ltd., Parliament introduced subsection (3A) by Act 30 of 2004, which now provides for consideration of the objections, if any raised by the borrower. By definition under Section 2(f) of the Act a borrower includes the guarantor of the debt. 19. Subsection (3A) further provides that if the secured creditor reaches a conclusion that the objections raised by the borrower are not acceptable or tenable, the creditor shall communicate the reasons for non-acceptance of the objections within a period of 15 days. The proviso to the said subsection declares that the rejection of the objections does not confer any right on the borrower to resort to the proceedings, contemplated either under Section 17 or 17A. We may indicate here both Sections 17 and 17A afford an opportunity to the borrower to approach the Debts Recovery Tribunal or (in the cases of Jammu & Kashmir) the District Court concerned against any measure taken under Section 13(4). 20. In every case where the objections raised by the borrower are rejected by the secured creditor, the secured creditor is entitled to take possession of the secured assets. In our opinion, such action-having regard to the object and scheme of the Act-could be taken directly by the secured creditor. However, visualising the possibility of resistance for such action, Parliament under Section 14 also provided for seeking the assistance of the judicial power of the State for obtaining possession of the secured asset, in those cases where the secured creditor seeks it. 21. However, visualising the possibility of resistance for such action, Parliament under Section 14 also provided for seeking the assistance of the judicial power of the State for obtaining possession of the secured asset, in those cases where the secured creditor seeks it. 21. Under the scheme of Section 14, a secured creditor who desires to seek the assistance of the State's coercive power for obtaining possession of the secured asset is required to make a request in writing to the Chief Metropolitan Magistrate or District Magistrate within whose jurisdiction, the secured asset is located praying that the secured asset and other documents relating thereto may be taken possession thereof. The language of Section 14 originally enacted purportedly obliged the Magistrate receiving a request under Section 14 to take possession of the secured asset and documents, if any, related thereto in terms of the request received by him without any further scrutiny of the matter. 22. However, the Bombay High Court in Trade Well v. Indian Bank opined: "2. CMM/DM acting under Section 14 of the NPA Act is not required to give notice either to the borrower or to the third party. 3. He has to only verify from the bank or financial institution whether notice under Section 13(2) of the NPA Act is given or not and whether the secured assets fall within his jurisdiction. There is no adjudication of any kind at this stage. 4. It is only if the above conditions are not fulfilled that the CMM/DM can refuse to pass an order under Section 14 of the NPA Act by recording that the above conditions are not fulfilled. If these two conditions are fulfilled, he cannot refuse to pass an order under Section 14." (emphasis supplied) The said judgment was followed by the Madras High Court in Indian Overseas Bank v. Sree Aravindh Steels Ltd. Subsequently, Parliament inserted a proviso to Section 14(1) and also subsection (1A) by Act 1 of 2013. 23. We must make it clear that these provisions were not in existence on the date of the order impugned in the instant proceedings. These amendments are made to provide safeguards to the interest of the borrower. 23. We must make it clear that these provisions were not in existence on the date of the order impugned in the instant proceedings. These amendments are made to provide safeguards to the interest of the borrower. These provisions stipulate that a secured creditor who is seeking the intervention of the Magistrate under Section 14 is required to file an affidavit furnishing the information contemplated under various subclauses (i) to (ix) of the proviso and obligates the Magistrate to pass suitable orders regarding taking of the possession of the secured assets only after being satisfied with the contents of the affidavits. 24. An analysis of the nine sub-clauses of the proviso which deal with the information that is required to be furnished in the affidavit filed by the secured creditor indicates in substance that: 24.1. (i) there was a loan transaction under which a borrower is liable to repay the loan amount with interest, 24.2. (ii) there is a security interest created in a secured asset belonging to the borrower, 24.3. (iii) that the borrower committed default in the repayment, 24.4. (iv) that a notice contemplated under Section 13(2) was in fact issued, 24.5. (v) in spite of such a notice, the borrower did not make the repayment, 24.6. (vi) the objections of the borrower had in fact been considered and rejected, 24.7. (vii) the reasons for such rejection had been communicated to the borrower, etc. 25. The satisfaction of the Magistrate contemplated under the second proviso to Section 14(1) necessarily requires the Magistrate to examine the factual correctness of the assertions made in such an affidavit but not the legal niceties of the transaction. It is only after recording of his satisfaction the Magistrate can pass appropriate orders regarding taking of possession of the secured asset. 26. It is in the above mentioned background of the legal frame of Sections 13 and 14, we are required to examine the correctness of the conclusions recorded by the High Court. Having regard to the scheme of Sections 13 and 14 and the object of the enactment, we do not see any warrant to record the conclusion that it is only after making an unsuccessful attempt to take possession of the secured asset, a secured creditor can approach the Magistrate. Having regard to the scheme of Sections 13 and 14 and the object of the enactment, we do not see any warrant to record the conclusion that it is only after making an unsuccessful attempt to take possession of the secured asset, a secured creditor can approach the Magistrate. No doubt that a secured creditor may initially resort to the procedure under Section 13(4) and on facing resistance, he may still approach the Magistrate under Section 14. But, it is not mandatory for the secured creditor to make attempt to obtain possession on his own before approaching the Magistrate under Section 14. The submission that such a construction would deprive the borrower of a remedy under Section 17 is rooted in a misconception of the scope of Section 17. 27. The "appeal" under Section 17 is available to the borrower against any measure taken under Section 13(4). Taking possession of the secured asset is only one of the measures that can be taken by the secured creditor. Depending upon the nature of the secured asset and the terms and conditions of the security agreement, measures other than taking the possession of the secured asset are possible under Section 13(4). Alienating the asset either by lease or sale, etc. and appointing a person to manage the secured asset are some of those possible measures. On the other hand, Section 14 authorises the Magistrate only to take possession of the property and forward the asset along with the connected documents to the borrower (sic the secured creditor). Therefore, the borrower is always entitled to prefer an "appeal" under Section 17 after the possession of the secured asset is handed over to the secured creditor. Section 13(4)(a) declares that the secured creditor may take possession of the secured assets. It does not specify whether such a possession is to be obtained directly by the secured creditor or by resorting to the procedure under Section 14. We are of the opinion that by whatever manner the secured creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 17 is available. 28. We are of the opinion that by whatever manner the secured creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 17 is available. 28. It can be noticed from the language of the proviso to Section 13(3A) and the language of Section 17 that an "appeal" under Section 17 is available to the borrower only after losing possession of the secured asset. The employment of the words "aggrieved by taken by the secured creditor" (emphasis supplied) in Section 17(1) clearly indicates the appeal under Section 17 is available to the borrower only after losing possession of the property. To set at naught any doubt regarding the interpretation of Section 17, the proviso to subsection (3A) of Section 13 makes it explicitly clear that either the reasons indicated for rejection of the objections of the borrower or the likely action of the secured creditor shall not confer any right under Section 17. 36. Thus, there will be three methods for the secured creditor to take possession of the secured assets: 36.1.(i) The first method would be where the secured creditor gives the requisite notice under Rule 8(1) and where he does not meet with any resistance. In that case, the authorised officer will proceed to take steps as stipulated under Rule 8(2) onwards to take possession and thereafter for sale of the secured assets to realise the amounts that are claimed by the secured creditor. 36.2. (ii) The second situation will arise where the secured creditor meets with resistance from the borrower after the notice under Rule 8(1) is given. In that case he will take recourse to the mechanism provided under Section 14 of the Act viz. making application to the Magistrate. The Magistrate will scrutinise the application as provided in Section 14, and then if satisfied, appoint an officer subordinate to him as provided under Section 14(1A) to take possession of the assets and documents. For that purpose the Magistrate may authorise the officer concerned to use such force as may be necessary. After the possession is taken the assets and documents will be forwarded to the secured creditor. 36.3. (iii) The third situation will be one where the secured creditor approaches the Magistrate concerned directly under Section 14 of the Act. For that purpose the Magistrate may authorise the officer concerned to use such force as may be necessary. After the possession is taken the assets and documents will be forwarded to the secured creditor. 36.3. (iii) The third situation will be one where the secured creditor approaches the Magistrate concerned directly under Section 14 of the Act. The Magistrate will thereafter scrutinise the application as provided in Section 14, and then if satisfied, authorise a subordinate officer to take possession of the assets and documents and forward them to the secured creditor as under clause 36.2. (ii) above. 36.4. In any of the three situations above, after the possession is handed over to the secured creditor, the subsequent specified provisions of Rule 8 concerning the preservation, valuation and sale of the secured assets, and other subsequent rules from the Security Interest (Enforcement) Rules, 2002, shall apply." 27. In light of the aforesaid, the contentions raised by learned counsel for the petitioner deserve to be negatived. The record of the petition, more particularly additional affidavit filed by the respondent Bank, which is not controverted by the petitioner, exhibits that since 2010, the respondent Bank has sanctioned advance in favour of the petitioner. It also shows that the petitioner has created charge over the properties and inspite of the efforts made by the respondent Bank to recover the outstanding dues, which are public funds, under one reason or others, the same is resisted by the petitioner on one hand, and on the other hand, the promises are made by the petitioner to bring a buyer which has remained unfulfilled. The conduct of the petitioner clearly establishes the fact that except the promises and dilatory tactics, the petitioner has shown no desire to pay the outstanding amount due. As the facts reveal that the account of the petitioner was declared to be nonperforming account way back on 26.02.2012 and having promised to submit concrete proposal for repayment of dues as stated by the petitioner himself in his letter dated 07.01.2015 cannot be now permitted to say that the account of the petitioner Company was wrongly declared as nonperforming account. In facts of this case, therefore, the impugned order passed by this Court is legal and proper and in accordance with the provisions of the Act. In facts of this case, therefore, the impugned order passed by this Court is legal and proper and in accordance with the provisions of the Act. The money advanced to the petitioner Company by the respondent Bank are public funds and a borrower like the present petitioner is on the contrary duty bound to respect the agreement with the respondent Bank. However, the facts of the petitioner reveal that since 26.02.2012, the petitioner is made aware that huge amount is due and payable, still however, the petitioner has in fact neglected to repay the dues. 28. Considering the facts of the case as well as the conduct of the petitioner and so also on examining the impugned order, this is not a fit case of exercising jurisdiction under Article 226 of the Constitution as the same would have serious impact on right of the respondent Bank to recover the dues, which are as such admitted by the petitioner in its letter dated 07.01.2015. 29. Considering the impugned order dated 01.01.2015 passed by Collector and District Magistrate, Bharuch, this Court is of the opinion that the District Magistrate has committed no error much less any error, which requires interference of this Court in its jurisdiction under Article 226 of the Constitution of India. The facts as observed herein above clearly demonstrate that there is no breach of any of the provisions of Section 14 of the Act or any other Rules. Resultantly, the petition is meritless and the same is hereby dismissed in limine. Notice is discharged. Ad interim relief granted earlier stand vacated. No order as to costs. Further Order: After the order is completed and pronounced, Mr. S.P. Majmudar, learned counsel for the petitioner prays for extension of ad interim relief granted earlier to enable the petitioner to approach the higher forum. Such request is vehemently opposed by learned counsel for the respondents. However, as this Court has granted ad interim relief, such relief shall continue till 13th July, 2015. Petition dismissed in limine.