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2016 DIGILAW 1488 (HP)

Saluja Motors Pvt. Ltd. v. District Magistrate

2016-07-26

MANSOOR AHMAD MIR, TARLOK SINGH CHAUHAN

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JUDGMENT : Mansoor Ahmad Mir, Chief Justice. (Oral) CMP No. 6038 of 2016 Respondent No. 5 has filed reply to the main petition and it is stated that the same be treated as objections to the application also. Other respondents sought time to file reply and objections within one week. 2. Learned Senior Counsel appearing on behalf of the petitioner stated at the Bar that the dispute is between respondents No. 3, 4 and 5, but the scapegoat is the petitionercompany. It is averred and argued that the petitioner is a tenant and running its business. Respondents No. 1 and 2 have made the orders whereby the petitioner-company has been thrown out of its business because the entire premises has been sealed. 3. The question is – whether the petitioner has a remedy by the medium of the writ petition? 4. This Court in CWP No. 627 of 2016, titled as M/s Tube Expansion and Equipments Pvt. Ltd. Versus District Magistrate, District Solan and others, decided on 11th April, 2016, has decided the issue. It is apt to reproduce para 12 of the judgment herein: ?12. Coming to the other contention regarding exception being taken to the notice issued by the District Magistrate, even here it is either HIMUDA or respondent No. 3, who alone can be considered to be the parties aggrieved and the petitioner cannot be permitted to espouse the cause of either the HIMUDA or respondent No. 3. Even the ratio of the judgment of the Hon'ble Supreme Court in Harshad Goverdhan Sondagar's case, upon which much reliance has been placed by the petitioner, would again not be attracted to the facts of the present case, as the case relates to third party objections, wherein the lessee had approached the Hon'ble Supreme Court for the redressal of his grievances. The Hon'ble Supreme Court categorically held that since the Debt Recovery Tribunal has power to restore possession of secured assets only to the borrower vide Section 17 (3), any such lessee of borrower whose property is intended to be sold would have no remedy under Section 17 to protect his possession under a valid or subsisting lease, therefore, the remedy of such lessee would only be under Articles 226 and 227 of the Constitution. Whereas, the instant case, as already observed above, neither respondent No. 3, who is the alleged lessee nor HIMUDA who is the lessor have approached the Court. The petitioner is not a person aggrieved and therefore, has no locus standi to question the order of the District Magistrate.? (Emphasis added) 5. It would also be profitable to reproduce relevant portion of paras 22 and paras 23, 26 and 29 of the judgment rendered by the Apex Court in the case titled as Harshad Govardhan Sondagar versus International Assets Reconstruction Company Limited and others, reported in (2014) 6 Supreme Court Cases 1, herein: ?22. We may now consider the nature of the right of the lessee and as to when the lease under the Transfer of Property Act gets determined. Sections 105 and 111 of the Transfer of Property Act, which are relevant in this regard, are quoted hereinbelow: xxx xxx xxx Section 105 thus provides that a lessee of an immovable property has a right to enjoy such property, for a certain time or in perpetuity when a lessor leases an immovable property transferring his right to enjoy such property for a certain time or in perpetuity. Section 111 of the Transfer of Property Act, 1882 provides the different modes by which a lease gets determined. Thus, so long as a lease of an immovable property does not get determined, the lessee has a right to enjoy the property and this right is a right to property and this right cannot be taken away without the authority of law as provided in Article 300-A of the Constitution. As we have noticed, there is no provision in Section 13 of the SARFAESI Act that a lease in respect of a secured asset shall stand determined when the secured creditor decides to take the measures mentioned in Section 13 of the said Act. Without the determination of a valid lease, the possession of the lessee is lawful and such lawful possession of a lessee has to be protected by all courts and tribunals. 23. We may now look at the provisions of Section 14 of the SARFAESI Act to find out whether it confers any power on the Chief Metropolitan Magistrate or the District Magistrate to assist the secured creditor in taking possession of the secured asset which is in lawful possession of the lessee under a valid lease. 24. …........... 25. 23. We may now look at the provisions of Section 14 of the SARFAESI Act to find out whether it confers any power on the Chief Metropolitan Magistrate or the District Magistrate to assist the secured creditor in taking possession of the secured asset which is in lawful possession of the lessee under a valid lease. 24. …........... 25. …........... 26. The opening words of sub-section (1) of Section 14 of the SARFAESI Act make it clear that where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor "under the provisions of the Act", the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof. Thus, only if possession of the secured asset is required to be taken under the provisions of the SARFAESI Act, the secured creditor can move the Chief Metropolitan Magistrate or the District Magistrate for assistance to take possession of the secured asset. We have already held that Section 13 of the SARFAESI Act does not provide that the lease in respect of a secured asset will get determined when the secured creditor decides to take the measures in the said section. Hence, possession of the secured asset from a lessee in lawful possession under a valid lease is not required to be taken under the provisions of the SARFAESI Act and the Chief Metropolitan Magistrate or the District Magistrate, therefore, does not have any power under Section 14 of the SARFAESI Act to take possession of the secured asset from such a lessee and hand over the same to the secured creditor. When, therefore, a secured creditor moves the Chief Metropolitan Magistrate or the District Magistrate for assistance to take possession of the secured asset, he must state in the affidavit accompanying the application that the secured asset is not in possession of a lessee under the valid lease made prior to creation of the mortgage by the borrower or made in accordance with Section 65A of the Transfer of Property Act prior to receipt of a notice under sub-section (2) of Section 13 of the SARFAESI Act by the borrower. We would like to clarify that even in such cases where the secured creditor is unable to take possession of the secured asset after expiry of the period 60 days of the notice to the borrower of the intention of the secured creditor to enforce the secured asset to realize the secured debt, the secured creditor will have the right to receive any money due or which may become due, including rent, from the lessee to the borrower. This will be clear from clause (d) of sub-section (4) of Section 13, which provides that in case the borrower fails to discharge his liability in full within the notice period, the secured creditor may require, at any time by notice in writing, any person who has acquired any of the assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. 27. …............. 28. …............. 29. Sub-section (3) of Section 14 of the SARFAESI Act provides that no act of the Chief Metropolitan Magistrate or the District Magistrate or any officer authorised by the Chief Metropolitan Magistrate or District Magistrate done in pursuance of Section 14 shall be called in question in any court or before any authority. The SARFAESI Act, therefore, attaches finality to the decision of the Chief Metropolitan Magistrate or the District Magistrate and this decision cannot be challenged before any court or any authority. The SARFAESI Act, therefore, attaches finality to the decision of the Chief Metropolitan Magistrate or the District Magistrate and this decision cannot be challenged before any court or any authority. But this Court has repeatedly held that statutory provisions attaching finality to the decision of an authority excluding the power of any other authority or Court to examine such a decision will not be a bar for the High Court or this Court to exercise jurisdiction vested by the Constitution because a statutory provision cannot take away a power vested by the Constitution. To quote, the observations of this Court in Columbia Sportswear Co. v. Director of Income Tax : (SCC p. 234, para 17) "17. Considering the settled position of law that the powers of this Court under Article 136 of the Constitution and the powers of the High Court under Articles 226 and 227 of the Constitution could not be affected by the provisions made in a statute by the Legislature making the decision of the tribunal final or conclusive, we hold that subsection (1) of Section 245S of the Act, insofar as, it makes the advance ruling of the Authority binding on the applicant, in respect of the transaction and on the Commissioner and income-tax authorities subordinate to him, does not bar the jurisdiction of this Court under Article 136 of the Constitution or the jurisdiction of the High Court under Articles 226 and 227 of the Constitution to entertain a challenge to the advance ruling of the Authority." In our view, therefore, the decision of the Chief Metropolitan Magistrate or the District Magistrate can be challenged before the High Court under Articles 226 and 227 of the Constitution by any aggrieved party and if such a challenge is made, the High Court can examine the decision of the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, in accordance with the settled principles of law.? 6. Keeping in view the ratio laid down by the Apex Court and this Court in the judgments (supra), it is held that tenant can maintain the writ petition. Accordingly, it is held that the writ petition is maintainable. 7. 6. Keeping in view the ratio laid down by the Apex Court and this Court in the judgments (supra), it is held that tenant can maintain the writ petition. Accordingly, it is held that the writ petition is maintainable. 7. Learned Senior Counsel appearing on behalf of the writ petitioner submitted that he is under instructions to make a statement that the petitioner may be allowed to retain the possession of the premises for four months enabling it and its employees to earn the livelihood. Further stated that in the meantime, respondents No. 1 to 4 be directed to go ahead with the auction proceedings and other related proceedings, as are required to be drawn and to take the said proceedings to its logical end within the time frame, preferably within four months or earlier to that. 8. Keeping in view the averments contained in the writ petition and the application read with the statement made by the learned Senior Counsel and the discussions made hereinabove, the question is – whether the petitioner has carved out a case for grant of interim relief, at this stage? 9. We are of the considered view that the petitioner has carved out a case for grant of interim relief for the reason that all the three ingredients, which are sine qua non for grant of interim relief, are in favour of the petitioner for the following reasons: 10. Admittedly, the petitioner is running its business in the premises as tenant, which stands locked, has affected its business and has put its reputation on stake. The possession of the petitioner is lawful, of which it cannot be deprived of without following the mandate of law and as held by the Apex Court in the judgment (supra), thus, has carved out a prima facie case. 11. Balance of convenience also leans in favour of the petitioner for the reason that it is running the business making both ends meet, is paying salary to its employees and in case interim relief is not granted, all the persons, who are earning livelihood because of this business, have to suffer. 12. 11. Balance of convenience also leans in favour of the petitioner for the reason that it is running the business making both ends meet, is paying salary to its employees and in case interim relief is not granted, all the persons, who are earning livelihood because of this business, have to suffer. 12. Further, in case interim relief is not granted, the petitioner will suffer irreparable loss for the reason that the premises stands locked because of which the machinery, stocks, spare fixtures and furniture lying inside the premises/workshop for the sale and repairs of the vehicles will be damaged and also the affected persons will not be able to earn their livelihood. 13. Accordingly, order of possession, dated 5th July, 2016, (Annexure P-13) and possession notice, dated 15th July, 2016, (Annexure P-11) are stayed and respondents No. 1 & 2 are directed to unlock and hand over the possession to the petitioner within a week provided the petitioner executes an undertaking to the satisfaction of the Registrar (Judicial) to the effect that it has to hand over the possession after four months. 14. List the writ petition on 4th August, 2016. Copy dasti.