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2022 DIGILAW 282 (JHR)

Unique Coal Company v. State of Jharkhand

2022-03-10

RAJESH SHANKAR

body2022
JUDGMENT : RAJESH SHANKAR, J. 1. The present writ petition has been filed for quashing the order dated 12.06.2018 (Annexure-3 to the writ petition) passed by the District Magistrate, Dhanbad in SARFAESI Case No. 16/2018 allowing the application filed by the respondent-Bank under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act 2002’). Further prayer has been made for issuance of direction upon the respondent No. 4 to consider the petitioner’s application/representation for regularization/settlement of its loan account bearing No. 36900600000480. 2. Mr. P.S.A.S. Pati, learned counsel appearing on behalf of the respondent-Bank, raises preliminary objection with regard to maintainability of the present writ petition and submits that the petitioner has filed the same without availing alternative/statutory/ efficacious remedy of preferring an application under Section 17 of the Act, 2002 before the Debts Recovery Tribunal, Ranchi against the impugned order dated 12.06.2018. 3. Since learned counsel for the respondent-Bank has raised the issue of maintainability of the writ petition, it would be appropriate to refer the judgments of the Hon’ble Supreme Court on the said aspect. 4. The Hon’ble Supreme Court in the case of United Bank of India vs. Satyawati Tondon and Others, (2010) 8 SCC 110 , 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. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.” 5. Further, in the case of Standard Chartered Bank vs. Noble Kumar and Others, (2013) 9 SCC 620 , the Hon’ble Apex Court has held as under: “27. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.” 5. Further, in the case of Standard Chartered Bank vs. Noble Kumar and Others, (2013) 9 SCC 620 , the Hon’ble Apex 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. 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.” 6. Thus, it has been held by the Hon’ble Supreme Court in the aforesaid cases that the action taken by the respondent-Bank not only under Section 13(4), but the subsequent action including an order passed under Section 14 of the Act, 2002 are also amenable to challenge under Section 17 of the Act, 2002. The respondent-Bank appears to have taken action against the petitioner, who is the borrower of the loan in question pursuant to the notice issued under Section 13(2) of the Act, 2002 as well as symbolic possession of the property in question taken under Section 13(4). The respondent-Bank appears to have taken action against the petitioner, who is the borrower of the loan in question pursuant to the notice issued under Section 13(2) of the Act, 2002 as well as symbolic possession of the property in question taken under Section 13(4). The District Magistrate, Dhanbad has also passed an order for taking physical possession of the property in question under Section 14 of the Act, 2002. 7. So far as invoking of writ jurisdiction in the matters of realization of loan by the financial institutions are concerned, the Hon’ble Apex Court in a judgment rendered in the case of Authorized Officer, State Bank of Travancore vs. Mathew K.C. (2018) 3 SCC 85 , while considering the earlier judicial pronouncements made in this regard, has held thus: “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 tax payers 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 Satyawati Tandon (supra), has also not been kept in mind before passing the impugned interim order: “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. 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 vs. Antarim Zila Parishad, Whirlpool Corporation vs. Registrar of Trade Marks and Harbanslal Sahnia vs. Indian Oil Corporation 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.” 8. Since the petitioner is the borrower of the loan taken from the respondent-Bank and has challenged the order dated 12.06.2018 passed by the District Magistrate, Dhanbad under Section 14 of the Act, 2002, this Court is of the view that the petitioner has got alternative/statutory/efficacious remedy of preferring an application under Section 17 of the Act, 2002 before the Debts Recovery Tribunal, Ranchi against the impugned order dated 12.06.2018. Hence, the present writ petition is not maintainable at this stage and the same is accordingly dismissed as not maintainable. 9. Hence, the present writ petition is not maintainable at this stage and the same is accordingly dismissed as not maintainable. 9. The petitioner is however at liberty to take appropriate recourse against the impugned order dated 12.06.2018 passed by the District Magistrate, Dhanbad in SARFAESI Case No. 16/2018 under Section 14 of the Act, 2002 by preferring an application under Section 17 of the Act, 2002 before the Debts Recovery Tribunal, Ranchi raising all the available points. 10. Consequently, I.A. No. 480/2019 also stands dismissed.