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2019 DIGILAW 348 (GAU)

Deepa Talukdar v. State of Assam

2019-03-15

A.S.BOPANNA, NANI TAGIA

body2019
JUDGMENT : A.S. BOPANNA, J. 1. The petitioners are before this Court seeking that the Sale Certificates issued by the Respondent No.2 to 4 Bank (hereinafter referred to as "Bank" for convenience) to Respondents No.5 to 18 (herein after referred to as "tenants" for convenience) be quashed. The petitioners are also seeking issue of Mandamus to direct the Bank to refrain from acting in furtherance to the agreement dated 8.2.2011 and 17.2.2011. 2. The undisputed facts are that the petitioners herein had obtained a loan from the respondent Bank for their business purposes being conducted in the name and style of M/s Ganesh Electric Store. As the loan remained unpaid, the account, accordingly was treated as Non- Performing Account (NPA for short) on 19.11.2007. The Bank having invoked the provisions of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the "SARFAESI Act") had initiated proceedings thereto. Since the amount had not been paid despite issue of notice under Section 13(2) of the SARFAESI Act, the Bank published a possession-cum-sale notice under Section 13(4) of the SARFAESI Act in the newspaper. The petitioners herein filed an application bearing No.10/2008 before the DRT under Section 17 of the SARFAESI Act. At that stage, since certain defects was noticed in the notice issued under Section 13(4) of the SARFAESI Act, the Bank through their petition no.287/2008 had sought leave to withdraw the said notice. Subsequently, a fresh notice was issued and proceedings under Section 14 of the Act to take possession of the secured asset was also initiated. At that stage, since the tenants were in possession of a portion of the secured asset, they had chosen to challenge the action of the Bank in seeking to dispossess them, by filing a writ petition in W.P.(C) No.5322/2010. They had sought for restoration of the possession. During the pendency of the petition, this Court through the order dated 9.12.2010 allowed the Bank to settle the dispute with the tenants. Since the said order was passed without opportunity to the petitioners herein, the husband of the petitioner No.1 herein filed a miscellaneous application in Misc. Case no.16/2011 assailing the said order. The said misc. During the pendency of the petition, this Court through the order dated 9.12.2010 allowed the Bank to settle the dispute with the tenants. Since the said order was passed without opportunity to the petitioners herein, the husband of the petitioner No.1 herein filed a miscellaneous application in Misc. Case no.16/2011 assailing the said order. The said misc. case was taken up for consideration on 11.02.2011 wherein, while taking note of the amount claimed by the Bank at Rs.53 lakhs, which was agreed to be paid by the tenants, this Court was of the opinion that the tenants should not suffer and, accordingly, directed that the Bank hold a fresh meeting with the tenants and the landlords, namely the petitioners herein. It was further clarified that if the landlord does not come to terms with the Bank, the Bank would be at liberty to negotiate and deal separately with the tenants. It is in that background, the Bank has negotiated and the tenants have been issued with the sale certificates pursuant to the agreement dated 8.2.2011 and 17.2.2011. The Bank, thus, having realized its dues has put the tenants in possession of the ground and first floors of the building wherein they were in occupation, while the remaining portion of the building has been handed back to the petitioners herein. It is in that background, at this juncture, in the instant petition the petitioners are seeking to redeem the secured asset and thereby wrest the possession from the tenants. 3. The Respondent Bank having realized its dues has not effectively opposed the instant petition. The tenants who have secured interest in the property have filed their affidavit- in-opposition wherein at the outset it is contended that the instant writ petition is not maintainable in view of the provisions as contained under Section 17 of the SARFAESI Act. The tenants have also referred to the earlier proceedings before this court based on which the entire transaction has been completed. Further, reference is also made to the proceedings which was initiated by the petitioners before the DRT in Application no.10/2008 and the Review Application No.9/2014 which have been dismissed and, as such, it is contended that the petitioners not having chosen to file an appeal against the said order in terms of Section 18 of the SARFAESI Act cannot agitate the matter in the instant petition. They have, accordingly, sought for dismissal of the petition. 4. Learned senior counsel for the petitioners has essentially contended with regard to the procedural safeguards provided under the SARFAESI Act as also the Security Interest (Enforcement) Rules, 2002 (for short the "Rules"). It is contended that the orders passed by this Court in the earlier writ petitions is contrary to the procedure as contemplated therein. Reference is made to Rule 8(5), (6) and Rule 9 of the Rules of 2002. It is the further contention that Section 60 of the Transfer of Property Act provides for redemption of mortgage and such right is available to the petitioners herein. It is contended that in the instant case, the sale has not been registered in favour of the tenants and it is open for redemption. It is contended that the sale has been made without following the procedure as contemplated, without valuation of the property and notifying the sale. 5. Learned counsel for the Respondents, on the other hand, has contended that the reliance placed by the learned senior counsel for the petitioners on Rule 8(5), (6) and Rule 9 of the Rules, 2002 at this juncture is misplaced. He refers to the earlier judicial proceeding based on which transactions has been completed. It is contended that this Court had safeguarded the interest of the petitioners to participate in the process of negotiation, but the petitioners having failed to make use of the opportunity had only reserved their right to raise the issue in the pending proceeding, but having failed before the DRT have presently filed the instant petition, which is not sustainable. The learned counsel would further contend that registration of the Sale Deed as required in a traditional sale transaction is not contemplated when a sale is made under Rule 2002 which provides for issue of Sale Certificate. It is his further contention that like the sale in a revenue proceeding where the sale certificate itself would be the document of title, in the procedure contemplated in the SARFAESI proceeding, which is akin to sale by the tax officer, the certificate is sufficient without requirement of registration and, as such, the right of redemption is extinguished when the sale certificate is issued. 6. 6. The decisions as referred to by the learned senior counsel for the petitioners as also the learned counsel for the respondents would be referred to at the appropriate juncture depending on the requirement to do so. 7. In support of the contention, the learned senior counsel for the petitioner has relied on the decision in the case of Mathew Varghese -Vs.- M. Amrigha Kumar and others, (2014) 5 (SCC) 610 , wherein the Honble Supreme Court with reference to Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002 has taken note of an earlier decision of the Honble Supreme Court relating to Section 60 of the T.P. Act, wherein it is held that the mortgagors right to redeem will survive until there has been completion of the sale by the mortgagee by registered deed. It is held therein that equity of redemption is not extinguished by mere contract for sale and the most important and vital principle stated was that the mortgagors right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. It is further held that under Section 13(8) of the SARFAESI Act, it is stipulated that the mortgagor i.e. borrower who is otherwise called as a debtor retains his full right to redeem the property by tendering all the dues to the secured creditor at any time before the date fixed for sale transaction. The secured asset should not be sold or transferred by the secured creditor when such tender is made by the borrower at the last moment before the sale or transfer. 8. Learned senior counsel for the petitioners has also referred to the decision in the case of J. Rajiv Subramaniyan and another vs. Pandiyas and others, (2014) 5 SCC 651 , wherein with reference to the case of Mathew Varghese (supra), the Honbe Supreme Court has expressed a similar view. The decision in Dwarika Prasad Vs. State of Uttar Pradesh and others, (2018) 5 SCC 491 is relied to contend that the right to redemption would be extinguished only when the sale deed is registered, wherein again the case of Mathew Varghese (supra) is referred to. The decision in the case of Ranjit Thakur Vs. Union of India and others, (1987) 4 SCC 611 is relied to contend that the procedural safeguard provided under a statute is to be strictly complied. 9. The decision in the case of Ranjit Thakur Vs. Union of India and others, (1987) 4 SCC 611 is relied to contend that the procedural safeguard provided under a statute is to be strictly complied. 9. Having taken note of the reliance placed on the provisions contained in the SARFAESI Act, Rules 2002 and the decisions as referred to above, on the position of law as enunciated there can be no quarrel whatsoever. However, the Rules as well as the decisions enunciated cannot be applied in abstract. Insofar as the safeguard as provided under Section 13(8) of the Act and the Rules 8(5), (6) and Rule 9 of the Rules 2002 would no doubt have to be followed scrupulously as contemplated therein if the procedure is resorted to by the Bank as the power available to it under the said provision is to bring the secured asset to sale without intervention of the Court. However, in the instant facts, the parties were before this court as also the DRT in the earlier proceeding and the subsequent process has taken place with judicial intervention. As noticed, the possession notice was published in the newspaper on 27.08.2010. At that stage, the tenants were before this Court in W.P.(C) No.5322 of 2010 and among the other respondents, the husband of the petitioner no.1, who is the father of petitioners No.2 to 4 was arrayed as Respondent No.5 therein. This Court while passing the interim order on 24.09.2010 had taken note of the claim put forth by the Bank and further on taking note of the fact that the tenants were in possession and were carrying on their businesses, through the interim direction had ordered status quo to be maintained, while directing the Bank not to go for sale or otherwise utilize the premises where the tenants were running their business. 10. The said writ petition was, thereafter, disposed of by the order dated 9.12.2010 whereunder it was taken note that the tenants who were writ petitioners therein had approached the Bank to settle the matter with them and the Bank had agreed to their proposal. In that view, based on the submission, this court had left the liberty to the bank to settle-up the dispute with the tenants so far the loan amount of the landlord i.e. the petitioners herein are concerned. In that view, based on the submission, this court had left the liberty to the bank to settle-up the dispute with the tenants so far the loan amount of the landlord i.e. the petitioners herein are concerned. Though this was the position, the Miscellaneous Application No.16/2011 was filed by the husband of the petitioner No.1 herein, who was Respondent No.5 in W.P.(C) No.5322/2010 making out a grievance that such liberty to settle the matter between the tenants and the Bank was given without providing opportunity to him. In that circumstance, this Court through the order dated 11.02.2011 had taken note of the very nature of the negotiation whereby the tenants who were in occupation of the ground and first floors of the building had agreed to pay the sum of Rs.53 lakhs which was due to the Bank from the petitioners herein through their predecessor and, having taken note that the negotiation is a reasonable one, had provided an opportunity to the petitioners predecessor to participate in the negotiation and had disposed of the miscellaneous case. It was indicated therein that writ appeal filed against the order in the writ petition would be withdrawn. In that circumstance, the proceeding had attained finality before this Court. Pursuant thereto, the transaction was completed based on the deed of agreement dated 8.2.2011 and the rectification deed of agreement was also signed on 17.2.2011. 11. Pursuant to the order passed in M.C. No.16/2011, a meeting for negotiation, as directed, was held and the minutes dated 16.2.2011 was recorded. A document to that effect is available at Annexure-3 along with the affidavit-in-opposition. The predecessor of the petitioners was present, but he has recorded that the minutes is signed by him subject to and agreed to without prejudice to his interest involved in the pending proceeding before the Courts/DRT. As noticed, the Application No.10/2008 was already pending before the DRT, wherein the petitioners herein were parties. The proceeding was dismissed on 22.07.2014. Though a Review Application No.9/2014 was filed, the same also came to be dismissed on 4.8.2015. The petitioners herein though having failed in the said proceeding, had not chosen to file an appeal before the Debts Recovery Appellate Tribunal ("DRAT" for short) as provided under Section 18 of the SARFAESI Act. Instead, the instant petition is filed on 26.11.2015. Though a Review Application No.9/2014 was filed, the same also came to be dismissed on 4.8.2015. The petitioners herein though having failed in the said proceeding, had not chosen to file an appeal before the Debts Recovery Appellate Tribunal ("DRAT" for short) as provided under Section 18 of the SARFAESI Act. Instead, the instant petition is filed on 26.11.2015. It is to be noticed that even in the instant proceeding, the orders passed by the DRT is not assailed, but what is called in question is only the Sale Certificates, which in fact, was the outcome of the proceeding before this Court. In that circumstance, even though the decision relied on by the learned counsel for the respondents in the case of United Bank of India Vs. Satyawati Tondon and others, (2010) 8 SCC 110 and in the case of Authorized Officer, State bank of Travancore and another Vs. Mathew K.C. (2018) 3 SCC 85 are taken note, apart from the position that this Court would not be inclined to interfere when an alternate remedy is provided, the very factual aspect noticed will disclose that the petitioners are estopped from making any claim before this court in the circumstance as noticed. Even if the provision for right to redeem is taken note, the predecessor of the petitioners who had participated in the proceeding on 16.2.2011, had at that stage not made an offer to pay the amount and redeem the property. As against claim for Rs.53 lakhs, it was being contended by him that it would have to be at Rs.44 lakhs, but no effort was made to even deposit the said amount nor was the objection raised with regard to the valuation of the property or that it is being settled for a lesser value. Even thereafter, neither before the DRT nor before this Court, material is brought on record to indicate that an offer had been made to pay the amount and redeem the property. Even thereafter, neither before the DRT nor before this Court, material is brought on record to indicate that an offer had been made to pay the amount and redeem the property. Further, the document at Annexure-4 along with the affidavit-in-opposition would indicate that at a point prior to the filing the instant petition, on 20.05.2015 petitioner No.1 herein has addressed a letter to the Bank seeking to take possession of the second floor of the secured asset and in the said letter, it has been stated that such possession is sought as the entire outstanding dues in the name of M/s Ganesh Electric Stores has been discharged. 12. As already noticed, the claim of the Bank at Rs.53 lakhs was discharged by the tenants in view of the understanding that they would be put back to possession without bringing the property to sale and, on such negotiation, the sale certificate was issued to the tenants. In the circumstance, when no protest is indicated even in the said communication dated 20.05.2015, relating to the sale made in favour of the tenants, but taking advantage of the same has sought for possession of the second floor, the entire matter has come to an end thereby. In such circumstance, when the instant petition is filed alleging non-adherence to the safeguard as contained in the Act and the Rules, this Court cannot come to the aid of the petitioners. Even at this stage, if the petitioners had any grievance, they could have only availed their remedy in accordance with law by filing an appeal as provided under the SARFAESI Act. 13. In view of our above conclusion, we do not find it necessary to advert to the other contentions raised and decisions referred by the learned counsel for the tenants and overburden this order. 14. In that view, the petition being devoid of merit is dismissed with no order as to costs.