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2017 DIGILAW 489 (CAL)

Bengal Bonded Warehouse Limited v. State Bank of India

2017-05-17

SUBRATA TALUKDAR

body2017
JUDGMENT : Subrata Talukdar, J. In this writ petition the petitioner No.1 is a registered company and, is also represented by impleading its Director as co-petitioner, both challenging the action of the respondents/State Bank of India connected to the premises at 25, N.S. Road, Kolkata -700001 (for short the premises). 2. Mr. Abhrajit Mitra, Ld. Senior Counsel appearing for the petitioners submits that by three separate registered deeds of lease entered into by and between the petitioner No.1 as the lessor and the private respondent No.4, being the lessee, the premises were leased out for the years 2006-2008 to be used as office space. Mr. Mitra submits that thereafter, without the knowledge of the petitioners, the property was mortgaged as a security interest by the private respondent No.4 in favour of the respondents/SBI for a loan advance of around Rs. 144 crores. 3. Disputes and differences having arisen between the petitioners and the respondent Nos. 3 and 4, being the lessor and lessee respectively, the petitioner No.1 instituted eviction proceedings before the Ld. City Civil Court at Calcutta being Title Suit Nos. 451 of 2015, 453 of 2015 and 454 of 2015. The said Title Suits culminated in judgments and decrees of eviction on admission dated 2nd February, 2016. Upon obtaining the judgments and decrees on admission the petitioner No.1 has taken possession of the said premises and, is since retaining the same. 4. Mr. Mitra points out that on 19th January, 2017 the petitioners were shocked to find notices pasted at the entrance of the said premises which, inter alia, demonstrate that the respondents/SBI is in the process of taking steps under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, 2002 (for short the 2002 Act). Mr. Mitra submits that the respondents/SBI has no legal claim against the petitioners qua the said premises since, admittedly, there is no privity of contract creating a security interest by and between the petitioners with the respondents/SBI. 5. According to Ld. Senior Counsel for the petitioners, the security interest, if any, qua the said premises expired with the decree of eviction by which the possession of the said premises was handed over by the lessee respondent nos. 3 and 4 in favour of its lawful owners, the petitioners. 5. According to Ld. Senior Counsel for the petitioners, the security interest, if any, qua the said premises expired with the decree of eviction by which the possession of the said premises was handed over by the lessee respondent nos. 3 and 4 in favour of its lawful owners, the petitioners. Relying on the authority of a judgment of an Hon'ble Division Bench of this Court reported in 2011 (1) CHN (Cal) 10, In Re: Debasree Das v. State of West Bengal & Ors., Mr. Mitra submits that in cases where a citizen is subjected to harassment in connection with premises lawfully owned by him and, is sought to be dispossessed from such lawful possession, the relief under Section 17 of the 2002 Act is not the alternate remedy under the 2002 Act. Mr. Mitra points out that since the petitioners are not bound by any loan/mortgage arrangement qua the said premises with the respondents/SBI, they are entitled to invoke the extraordinary jurisdiction of this Court for protection of their Right to Property under Article 300A of the Constitution of India. In support of his above noted arguments, Mr. Mitra specifically relies upon the authority of Paragraph 13 of 2011 (1) CHN (Cal) 10. 6. Mr. Mitra also relies upon the decision of the Hon'ble High Court at Bombay reported in 2016 SCC Online Bom 5355, In Re: JM Financial Asset Reconstruction Company Pvt. Ltd. v. Board of Trustees of the Port of Mumbai as well as 2016 SCC Online Bom 2574, In Re: Shivabassappa I. Kankanwadi v. Mapusa Urban Co-operative Bank of Goa Ltd. to make the point that in the event it is discovered that the action initiated by the Bank under the 2002 Act qua the petitioners is patently without jurisdiction or, in erroneous assumption of jurisdiction, such action cannot bind the true owner of the property in issue for being obliged to discharge any security interest with which such true owner has no connection. Mr. Mitra points out that the judgments and decrees for eviction on admission dated 22nd February, 2016 having attained finality, the petitioners are entitled to enjoy the fruits of their decrees. 7. Arguing for the respondents/Bank, Mr. Suddhasatva Banerjee, Ld. Counsel, strongly invites this Court to first consider the maintainability of the writ petition. Mr. Banerjee argues that it is an admitted fact that the respondent Nos. 7. Arguing for the respondents/Bank, Mr. Suddhasatva Banerjee, Ld. Counsel, strongly invites this Court to first consider the maintainability of the writ petition. Mr. Banerjee argues that it is an admitted fact that the respondent Nos. 3 and 4 created a security interest with the respondents/SBI qua the said premises for a loan amount of around Rs. 144 crores. Mr. Banerjee submits that the judgments and decrees on admission lead to the abrupt abandonment of the said premises by the respondent Nos. 3 and 4 in favour of the petitioners, being part of a designed intra-parties arrangement. Mr. Banerjee points out that it was understood between the petitioners and the respondent Nos. 3 and 4 that the decrees for eviction, which, according to Ld. Counsel, has been collusively procured, would ultimately enable the petitioners to forsake the mortgage. Mr. Banerjee argues that the private respondent Nos. 3 and 4 were merely acting as the shell/front operatives of the petitioners. 8. Taking this Court to the clear language employed by the Hon'ble Division Bench In Re: 2011 (1) CHN (Cal) 10 (supra), Mr. Banerjee submits that Paragraph 13 thereof speaks of a situation where neither the writ petitioners, in the facts of that case, nor their predecessors in the property, ever mortgaged the property in favour of the Bank or, any financial institution. Mr. Banerjee submits and, in the opinion of this Court correctly so, that the action of the respondent Nos. 3 and 4 in mortgaging the said premises to the Bank clearly created a valid connect to the enforcement of the rights of the Bank under the 2002 Act qua the said premises, notwithstanding the pretext of a transfer of possession blessed by decrees. 9. Next, Mr. Banerjee takes this Court to Section 31 of Chapter VI of the 2002 Act. Mr. Banerjee submits that Section 31, inter alia, provides for a situation where the provisions of the 2002 Act shall not apply. One such situation is contemplated by Section 31(e). Section 31(e) reads as follows:- "Provisions of this Act not to apply in certain cases. The provisions of this Act shall not apply to- .........(e) any conditional sale, hire-purchase or lease or any other contract in which no security interest has been created;" 10. Ld. One such situation is contemplated by Section 31(e). Section 31(e) reads as follows:- "Provisions of this Act not to apply in certain cases. The provisions of this Act shall not apply to- .........(e) any conditional sale, hire-purchase or lease or any other contract in which no security interest has been created;" 10. Ld. Counsel for the respondents/Bank thereafter points out that Section 31(e) stood omitted by the Amendment Act No. 44 of 2016 w.e.f. 16th August, 2016. Therefore, the net effect of such Amendment stood in favour of operationalising the 2002 Act in the event of the happening of any conditional sale, higher purchase or lease or any other contract in which security interest is created. Mr. Banerjee points out that admittedly in the facts of the present case security interest in favour of the respondents/SBI was created qua the said premises. Therefore, such creation of security interest, admittedly by the predecessors in the property of the present petitioners cannot be treated to be an exception disqualifying the application of the 2002 Act under Section 31(e) thereof. 11. Mr. Banerjee therefore submits that the enforcement of the security interest of the Bank qua the said premises is required to follow due process under Section 13 of the 2002 Act. Even assuming for the sake of argument that correspondence has been exchanged in the form of notice and reply between the parties connected to the security interest under Sections 13(2) and 13 (3A) of the 2002 Act, the cause of action ventilated through this writ petition is premature since, there can be no grant of relief in anticipation by a Court till the respondents/bank seeks the enforcement of its security as provided under the special statute. 12. Therefore, Mr. Banerjee argues, that in any view of the matter neither the special statutory procedure under the 2002 Act can kickoff nor, a writ remedy can lie for a contrived legal right. 13. At this stage Mr. Banerjee takes this Court to Section 17 of the 2002 Act which, inter alia, provides that "Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor" may make an application before the Debts Recovery Tribunal (for short DRT) upon payment of the prescribed fees and, within the prescribed time limit. 14. Mr. 14. Mr. Banerjee accordingly points out that even the petitioners fall within the category of "any person aggrieved" mandating a recourse, if any, only under the special statute. In support of his above noted submission Ld. Counsel for the respondents/SBI relies upon the authorities of 2010 (8) SCC 110 , In Re: United Bank of India v. Satyawati Tondon & Ors. and 2011 (2) SCC 782 , In Re: Kanaiyalal Lalchand Sachdev & Ors. v. State of Maharashtra & Ors. as well as the unreported decision of an Hon'ble Single Bench of this Court in WP 9804 (W) of 2014, In Re: Dr. Sumana Das v. Union of India & Ors. Mr. Banerjee argues that the above noted judicial authorities underscore the point that a writ petition is not an alternate remedy since the only remedy, in the facts of the present case, lies within the domain of the special statute. 15. After hearing the parties and considering the materials placed, this Court is persuaded to accept the submissions advanced by Ld. Counsel for the respondents/Bank. This Court must also observe, while holding the petition as not maintainable, that in the facts of the present case neither the compulsions of self-restraint attached to a Writ Court nor, the exigencies of an efficacious alternate relief impact its mind. 16. What exercises the mind of this Court is to avoid the tempting prospect of lending a veneer of constitutional status to a contrived legal right to property claimed by the petitioners which, if at all, ought to be exhaustively placed before the special forum created by the special statute. In this regard it will be useful to place the sound principles connected to the exhaustion of remedies discussed at Paragraph 14 of In Re: Commissioner of Income Tax & Ors. v. Chhabil Dass Agarwal reported in 2014 (1) SCC 603 , which reads as follows:- "In Union of India v. Guwahati Carbon Ltd., (2012) 11 SCC 651, this Court has reiterated the aforesaid principle and observed: "8. Before we discuss the correctness of the impugned order, we intend to remind ourselves the observations made by this Court in Munshi Ram v. Municipal Committee, Chheharta, (1979) 3 SCC 83 . In the said decision, this Court was pleased to observe that: (SCC p. 88, para 23). "23. ... Before we discuss the correctness of the impugned order, we intend to remind ourselves the observations made by this Court in Munshi Ram v. Municipal Committee, Chheharta, (1979) 3 SCC 83 . In the said decision, this Court was pleased to observe that: (SCC p. 88, para 23). "23. ... when a revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all the other forums and modes of seeking [remedy] are excluded." 17. For the above reasons WP 75 of 2017 stands dismissed as not maintainable. 18. Urgent certified photocopies of this judgment, if applied for, be given to the learned advocates for the parties upon compliance of all formalities.