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2019 DIGILAW 1084 (RAJ)

Chundri Ghar Textiles v. State of Rajasthan

2019-04-10

PUSHPENDRA SINGH BHATI

body2019
ORDER : PUSHPENDRA SINGH BHATI, J. 1. This writ petition under Article 226 of the Constitution of India has been preferred claiming the following reliefs:- “1. That respondents may kindly be directed to quash and set aside the order dated 20.02.2019 (annexure No. 7) passed by respondent No. 1, and restrained respondent No. 2 to dispossess the petitioner from his property. 2. That any other appropriate or direction by which this Hon’ble Court considers just and proper in the facts and circumstances of the present case, may kindly be passed in favour of the petitioner. 3. Costs of the writ petition may kindly be awarded to the petitioner.” 2. The matter pertains to non-payment of the interest towards the loan borrowed by respondent No. 3 - borrower, and the present petitioner stood as a guarantor against such loan. 3. The sheet anchor of the petitioner’s case is that respondent No. 3 took overdraft facility from respondent No. 2 - Bank in the year 2015 amounting to Rs.3.00 crores against the property of the present petitioner as guarantee against such overdraft facility/loan. Thereafter, respondent No. 2 issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, ‘the SARFAESI Act’), informing the present petitioner about the defaults committed by respondent No. 3 in payment of interest towards the overdraft facility/loan so provided, and thus, the said loan has been classified as Non-performing Assets (NPA). Accordingly, the proceedings under the SARFAESI Act were initiated against the present petitioner/guarantor. 4. As per the pleaded case of the petitioner, immediately after coming to know about issuance of the aforementioned notice, the petitioner submitted a representation dated 20.02.2019 before the respondent No. 2 - Bank informing that the property of the petitioner, where against the overdraft facility/loan has been provided to respondent No. 3, is lying with one Mr. Idrish Belim since 2015, but the respondent No. 2 - Bank did not consider such representation of the petitioner, and that too, without assigning appropriate reasons, and is now bent upon to deprive the petitioner of his property, while proceeding against the present petitioner/guarantor under the provisions of the SARFAESI Act. 5. Thereafter, the petitioner also approached the respondent No. 3 - borrower and apprised him as well about the aforementioned proceedings, but the petitioner’s grievance remained as it is. 6. 5. Thereafter, the petitioner also approached the respondent No. 3 - borrower and apprised him as well about the aforementioned proceedings, but the petitioner’s grievance remained as it is. 6. Apart from the above, in pursuance of the proceedings under the SARFAESI Act, respondent No. 2-Bank issued an auction notice dated 19.03.2019 in respect of the petitioner’s property. 7. As the pleaded facts would further reveal, since even after approaching various concerned authorities, the petitioner’s grievance could not be redressed, therefore, the petitioner has approached this Court by preferring the present writ petition under Article 226 of the Constitution of India seeking redress. 8. The main contention of learned counsel for the petitioner is that since the guarantee of the petitioner against the overdraft facility/loan provided to respondent No. 3 has been obtained by fraud, therefore, he is not responsible for any default committed by respondent No. 3 against such overdraft facility/loan. Learned counsel for the petitioner further submitted that despite the said fact having been brought to the knowledge of the concerned authorities, the respondent No. 2-Bank is going to dispossess the petitioner from his property under the garb of the proceedings under the SARFAESI Act and the consequential proceedings, including the aforementioned auction notice. 9. Reliance has been placed by learned counsel for the petitioner on the precedent law laid down by the Hon’ble Apex Court in Harshad Govardhan Sondagar Vs. International Assets Reconstruction Company Limited & Ors., (2014) 6 SCC 1 , relevant para 28 of which reads as under: “28. A reading of Sub-rules (1) and (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 would show that the possession notice will have to be affixed on the outer door or at the conspicuous place of the property and also published, as soon as possible but in any case not later than seven days from the date of taking possession, in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer. At this stage, the lessee of an immovable property will have notice of the secured creditor making efforts to take possession of the secured assets of the borrower. At this stage, the lessee of an immovable property will have notice of the secured creditor making efforts to take possession of the secured assets of the borrower. When, therefore, a lessee becomes aware of the possession being taken by the secured creditor, in respect of the secured asset in respect of which he is the lessee, from the possession notice which is delivered, affixed or published in Sub-rule (1) and Sub-rule (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002, he may either surrender possession or resist the attempt of the secured creditor to take the possession of the secured asset by producing before the authorised officer proof that he was inducted as a lessee prior to the creation of the mortgage or that he was a lessee under the mortgagor in accordance with the provisions of Section 65A of the Transfer of Property Act and that the lease does not stand determined in accordance with Section 111 of the Transfer of Property Act. If the lessee surrenders possession, the lease even if valid gets determined in accordance with clause (f) of Section 111 of the Transfer of Property Act, but if he resists the attempt of the secured creditor to take possession, the authorised officer cannot evict the lessee by force but has to file an application before the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the SARFAESI Act and state in the affidavit accompanying the application, the name and address of the person claiming to be the lessee. When such an application is filed, the Chief Metropolitan Magistrate or the District Magistrate will have to give a notice and give an opportunity of hearing to the person claiming to be the lessee as well as to the secured creditor, consistent with the principles of natural justice, and then take a decision. If the Chief Metropolitan Magistrate or District Magistrate is satisfied that there is a valid lease created before the mortgage or there is a valid lease created after the mortgage in accordance with the requirements of Section 65A of the Transfer of Property Act and that the lease has not been determined in accordance with the provisions of Section 111 of the Transfer of Property Act, he cannot pass an order for delivering possession of the secured asset to the secured creditor. But in case he comes to the conclusion that there is in fact no valid lease made either before creation of the mortgage or after creation of the mortgage satisfying the requirements of Section 65A of the Transfer of Property Act or that even though there was a valid lease, the lease stands determined in accordance with Section 111 of the Transfer of Property Act, he can pass an order for delivering possession of the secured asset to the secured creditor.” 10. On the other hand, learned counsel for the respondent submitted that an alternative remedy is available with the petitioner under Section 17 of the SARFAESI Act for ventilating his grievances. Learned counsel for the respondent further submitted that an appeal preferred by the petitioner is still pending with the Debt Recovery Tribunal. 11. In support of his submission, learned counsel for the respondents relied upon the precedent law laid down by the Hon’ble Supreme Court in Kanaiyalal Lalchand Sachdev & Ors. Vs. State of Maharashtra & Ors., reported in (2011) 2 SCC 782 , relevant para 22 of which reads as under:- “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. 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.” 12. Learned counsel for the respondent has also placed reliance on the precedent law laid down by the Hon’ble Supreme Court in Jagdish Singh Vs. Heeralal & Ors., (2014) 1 SCC 479 , relevant paras 19 and 20 of which read as under:- “19. The expression ‘any person’ used in Section 17 is of wide import and takes within its fold not only the borrower but also the guarantor or any other person who may be affected by action taken under Section 13(4) of the Securitisation Act. Reference may be made to the Judgment of this Court in Satyavati Tondon’s case (supra). 20. Therefore, the expression ‘any person’ referred to in Section 17 would take in the plaintiffs in the suit as well. Reference may be made to the Judgment of this Court in Satyavati Tondon’s case (supra). 20. Therefore, the expression ‘any person’ referred to in Section 17 would take in the plaintiffs in the suit as well. Therefore, irrespective of the question whether the civil suit is maintainable or not, under the Securitisation Act itself, a remedy is provided to such persons so that they can invoke the provisions of Section 17 of the Securitisation Act, in case the bank (secured creditor) adopt any measure including the sale of the secured assets, on which the plaintiffs claim interest.” 13. After hearing learned counsel for the parties as well as perusing the record of the case alongwith the precedent law cited at the Bar, this Court finds that the precedent law laid down by the Hon’ble Supreme Court in Jagdish Singh Vs. Heeralal & Ors. (supra) and Kanaiyalal Lalchand Sachdev & Ors. Vs. State of Maharashtra & Ors. (supra), as cited by learned counsel for the respondent, make it amply clear that the petitioner is having an alternative and efficacious remedy under Section 17 of the SARFAESI Act for redressal of his grievance. Moreover, an appeal being preferred by the petitioner is already pending before the Debt Recovery Tribunal. 14. For the foregoing reasons, particularly the fact that the petitioner is having an alternative and efficacious remedy under Section 17 of the SARFAESI Act for redressal of his grievance, the present petition is dismissed with liberty to the petitioner to avail such remedy. Thereafter, in case the petitioner still feels aggrieved, he can approach this Court again, if so advised.