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2020 DIGILAW 571 (JHR)

Sushma Das v. State of Jharkhand

2020-06-05

RAJESH SHANKAR

body2020
ORDER : The present writ petition has been taken up today through Video conferencing. The present writ petition has been preferred for quashing of E-auction Notice vide R.N.R.O/815/2017 dated 14.10.2017 issued by the respondent no. 5 – the Assistant General Manager (Admin), Housing and Urban Development Corporation Limited, Ranchi for sale of immovable properties under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI Act, 2002) and Rule 8(6), 9 of Security Interest (Enforcement) Rules, 2002, whereby the general public have been invited to participate in “Online E-Auction” relating to all the piece and the parcel of land admeasuring 8 decimals along with a house built over the same covered under Plot No. 46/1357 and 45/1358 under Khata No. 647/50, Thana No. 164, Ward No. 3 situated at Mouza - Kharsawan, Thana-Kharsawan, District Saraikella-Kharsawan (hereinafter referred to as “the said property”). Further prayer has been made for quashing letter no. HUDCO/RRO/RF/C/259/1411 dated 05.02.2018 issued by the Housing and Urban Development Corporation Limited (hereinafter referred to as “HUDCO”), whereby the physical possession of the said immovable properties mortgaged to secure the repayment of the loan under the Housing Loan Account No. RRO/RF/C/259 has been demanded with reference to the demand notice dated 28.06.2013 which was earlier issued under Section 13(2) read with Section 13(13) of SARFAESI Act, 2002 and possession notice dated 27.06.2016 under Section 13(4) of the SARFAESI Act, 2002 and Rule 8(1) of Security Interest (Enforcement) Rules, 2002 in which symbolic possession of the said properties had been taken without considering the fact that the petitioners have already made objection before the respondent authorities that the property in question is an ancestral property and not a self-acquired one. 2. The factual background of the case as stated in the writ petition is that the house and adjoining land (measuring total area of 23 decimals) situated at Mouza-Kharsawan under Thana No. 164, Khata No. 647 bearing Plot Nos. 1357 and 1358 being Makan and Sahan nature is recorded in the name of Late Bhola Nath Rout. The recorded raiyat died on 12.10.1996 and his wife also died on 24.01.2018. Bhola Nath Rout had four sons and three daughters who inherited the property after his death and they were in joint possession of the property. 1357 and 1358 being Makan and Sahan nature is recorded in the name of Late Bhola Nath Rout. The recorded raiyat died on 12.10.1996 and his wife also died on 24.01.2018. Bhola Nath Rout had four sons and three daughters who inherited the property after his death and they were in joint possession of the property. The petitioners received a possession notice issued by HUDCO on 27.06.2016 stating therein that Murari Mohan Rout (the respondent no. 6 herein) [one of the sons of Bhola Nath Rout] had failed to repay the amount of loan with interest and, therefore, the notice was being given to the respondent no. 6/borrower and in general public that HUDCO had taken possession of the property in question in exercise of powers conferred to it under Section 13(4) of the SARFAESI Act, 2002 read with Rule 8(1) of the said rules on 27.06.2016. After receiving the possession notice dated 27.06.2016, the petitioners came to know that the elder son of the recorded raiyat i.e., the respondent no. 6 had taken home loan from HUDCO on the basis of the registered gift deed no. 272 dated 21.01.1991. Thereafter, the petitioners filed a partition suit being Title (P) Suit No. 20 of 2017, wherein the respondent no. 6 and HUDCO were made defendants. The petitioners gave legal notice dated 25.04.2017 to HUDCO and raised objection against the impugned notice stating therein that the said property is an ancestral one and a kachcha house has existed thereon is since before 1932 and, therefore, the loan agreement made with the respondent no. 6 is illegal and no valid mortgage was created, as such the same cannot be enforced. However, an E-auction notice dated 14.10.2017 for sale of immovable properties under the SARFAESI Act, 2002 and Security Interest (Enforcement) Rules, 2002 issued by the HUDCO has been pasted on the wall of the house of the petitioners, whereby the general public have been invited to participate in “Online e-auction” though website http:/www.bankeauctions.com/hudco. Further, HUDCO has issued letter dated 05.02.2018 to the respondent no. Further, HUDCO has issued letter dated 05.02.2018 to the respondent no. 6, whereby a request has been made to vacate the secured assets and give physical possession of the immovable properties mortgaged to secure the repayment of the loan under the Housing Loan Account No. RRO/RF/C/259 to HUDCO within 15 days from the date of notice, in pursuance of earlier demand notice dated 28.06.2013 served under Section 13(2) read with Section 13(13) of the SARFAESI Act, 2002 and possession notice dated 27.06.2016 under Section 13(4) of the SARFAESI Act, 2002 and Rule 8(1) of the Security Interest (Enforcement) Rules, 2002. It has been stated in the said letter that that the respondent no. 6 had failed to pay the entire outstanding amount even after 3 months from the date of taking symbolic possession and consequently, the mortgaged property was put to e-auction by HUDCO which was concluded on 14.11.2017 and thus physical possession of mortgaged properties is needed in order to hand over the same to the successful auction purchaser. It was requested therefore to vacate and give physical possession of all the piece and the parcel of land admeasuring 8 decimals along with a house built over the same. HUDCO has issued another letter dated 23.02.2018 to the respondent no. 6, whereby he has again been asked to handover the possession of the immovable property against Loan Account No. RRO/RF/C/259 stating therein that on 23.02.2018, when the officers of HUDCO went to take over the physical possession of the property, it was found that the same was not in vacant position and no male member was present at the property, therefore taking over the physical possession could not materialize due to which HUDCO was left with no other option but to take over legal recourse available to it including taking the help of Deputy Commissioner, Saraikela- Kharsawan under the SARFAESI Act, 2002. Hence, the present writ petition. 3. The learned counsel for the petitioners submits that the respondent-HUDCO was well aware of the fact that a very old kachcha house is situated over the said land and no construction has been made over the same, they have issued e-auction notice for sale of immovable property in question. The respondent no. 6 in connivance with the authority of HUDCO managed to take home loan of Rs. The respondent no. 6 in connivance with the authority of HUDCO managed to take home loan of Rs. 3,00,000/- on the basis of forged gift deed dated 21.01.1991 and without verifying the land in question, HUDCO extended the said facility. It is further submitted that Late Bhola Nath Rout had no legal right to transfer the joint property by way of gift deed to a particular family member/coparcener. It is submitted that the petitioners are poor persons and if the HUDCO gets successful in throwing them out of the house, they would suffer irreparable loss and injury. 4. The learned counsel for the State and the learned counsel for the HUDCO at the outset submit that the present writ petition is not maintainable either on facts or on law as the petitioners have invoked the extraordinary writ jurisdiction of this Court without taking recourse of efficacious/alternative remedy provided under the law including Section 17 and 18 of the SARFAESI Act, 2002. 5. Heard the learned counsel for the parties and perused the materials available on record. The petitioners have sought intervention of this Court against the action taken by the respondent-HUDCO, whereby in default of the payment of loan amount by the respondent no. 6, notice for symbolic possession of the mortgaged property has been issued under Section 13(4) of the SARFAESI Act, 2002 and thereafter consequential letters demanding the physical possession of the mortgaged property have been issued. 6. In the case of “United Bank of India Vs. Satyawati Tondon & Ors.” reported in (2010) 8 SCC 110 , the Hon’ble Supreme Court has held as under: 42. There is another reason why the impugned order should be set aside. If Respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression “any person” used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.” 7. It would thus be evident from the aforesaid judgment that the expression “any person” used in Section 17(1) of the SARFAESI Act, 2002 is of wide connotation and the same includes not only the borrower, but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14 of the SARFAESI Act, 2002. Thus, the Debts Recovery Tribunal (DRT) or the Debts Recovery Appellate Tribunal (DRAT) are duly empowered to entertain the application/appeal filed under Section 17 and 18 of the SARFAESI Act, 2002 respectively including passing of the interim orders and to decide the dispute within a fixed period. It has thus been settled that the remedy under Section 17 of the SARFAESI Act, 2002 is available to any aggrieved person. 8. Further, in the case of “Standard Charted Bank Vs. V. Noble Kumar & Ors.” reported in (2013) 9 SCC 620 , the Hon’ble Supreme Court has held as under: 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. 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.” 9. So far as invoking the writ jurisdiction in the matter of realization of loan by the financial institution/secured creditors are concerned, the Hon’ble Supreme Court in the case of “Authorized Officer, State Bank of Travancore & Anr. Vs. Mathew K.C.” reported in (2018) 3 SCC 85 has held as under: 15. It is the solemn duty of the court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the taxpayer's expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in SatyawatiTondon (surpa.), has also not been kept in mind before passing the impugned interim order: (SCC pp. 123-24, para 46) “46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. The caution required, as expressed in SatyawatiTondon (surpa.), has also not been kept in mind before passing the impugned interim order: (SCC pp. 123-24, para 46) “46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order.” 16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter-affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. 10. The petitioners by claiming themselves as the joint owners of the said property have challenged the impugned action taken by the respondent-HUDCO under Section 13(4) of the SARFAESI Act, 2002 read with Rule 8(1) of Security Interest (Enforcement) Rules, 2002 and other consequential action and, therefore, they may well be treated to be “any person” within the meaning of Section 17(1) of the SARFAESI Act, 2002. Thus, the petitioners have an efficacious/statutory remedy provided under the SARFAESI Act, 2002. Hence, the writ petition is not maintainable at this stage. 11. The writ petition is accordingly dismissed as not maintainable. Thus, the petitioners have an efficacious/statutory remedy provided under the SARFAESI Act, 2002. Hence, the writ petition is not maintainable at this stage. 11. The writ petition is accordingly dismissed as not maintainable. The petitioners are, however, at liberty to take appropriate recourse against the impugned action taken by the respondent-HUDCO as provided under law.