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2023 DIGILAW 2630 (PNJ)

Ashok Kumar Dhawan v. State of Punjab

2023-08-31

LISA GILL, RITU TAGORE

body2023
JUDGMENT Mrs. Lisa Gill, J. (Oral) Prayer in this writ petition is for setting aside order dated 21.07.2023, Annexure P-6, under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act'), passed by respondent no.3, whereby possession was ordered to be taken on 08.08.2023. 2. It is pleaded that petitioner was running a proprietorship concern in the name of M/s Anand Filling Station. Financial facilities were availed of by the said concern through its proprietor i.e., the petitioner, from the respondent-State Bank of India (SBI), from time to time, for a total sum of Rs. 20,00,000/-. It is to be noted that no details or dates when this facility was availed have been given in the writ petition. It is further stated that installments were paid from 2011 to 2019, but thereafter, there was default on the part of the petitioner. Three properties as are detailed in para 3 of the writ petition are stated to be mortgaged with the respondent-Bank. Franchise agreement of M/s Anand Filling Station, was terminated on 23.03.2023 by one Nayara Energy Limited. There are again no details in the writ petition as to when account of the said concern was declared 'Non Performing Asset' (NPA) or when notice under 13(2) of the SARFAESI Act was issued. 3. Learned counsel for the petitioner vehemently argued that no notice was issued to the petitioner before issuance of order dated 21.07.2023, Annexure P-6, whereby possession was sought to be taken by 08.08.2023. The same was served only on 26.07.2023. Therefore, in the wake of fifteen days notice not being received, the same is illegal, arbitrary and liable to be set aside. It is further argued that three properties of the petitioner have been mortgaged, therefore, there is no reason as to why the respondent-Bank should target only the residential property without first taking over the commercial properties. It is also argued that order under Section 14 of the SARFAESI Act has been incorrectly passed by the District Magistrate, in violation of the specific provisions of the SARFAESI Act. Satisfaction of the District Magistrate qua the nine points has not been recorded, thus said order is not sustainable. It is also argued that order under Section 14 of the SARFAESI Act has been incorrectly passed by the District Magistrate, in violation of the specific provisions of the SARFAESI Act. Satisfaction of the District Magistrate qua the nine points has not been recorded, thus said order is not sustainable. It is further argued that petitioner does not have an alternate efficacious remedy other than to approach this Court at this stage, as fundamental rights of the petitioner have been violated and order by the District Magistrate is in violation not only of the provisions of Section 14 of the SARFAESI Act, but also the judgement of Hon'ble the Supreme Court in Standard Chartered v. V. Noble Kumar and others, 2013(9) SCC 620 . Therefore, present writ petition should be entertained and allowed. 4. It was brought to our notice by learned counsel for respondent no.2, who was on advance notice, that account of the petitioner's concern/firm was declared NPA on 31.08.2019. Notice under Section 13(2) of the SARFAESI Act was issued on 23.10.2019. Possession notice attached as Annexure P-4, was issued on 05.01.2020. Order under Section 14 of the SARFAESI Act was passed on 10.05.2021. It is incorrectly mentioned in the writ petition that order under Section 14 of the SARFAESI Act was passed by the District Magistrate on 21.07.2023, Annexure P-6. In fact the document dated 21.07.2023, Annexure P-6, attached with the writ petition is a notice issued by the Teshildar-cum-District Magistrate Amritsar-2 pursuant to order dated 10.05.2021 passed by the District Magistrate, under Section 14 of the SARFAESI Act, as is clearly detailed in the said notice. 5. Learned counsel for respondent no.2 while opposing this writ petition further submits that petitioner has not deposited any of the amount due since the year 2019. Moreover, notice prior to passing of order under Section 14 of the SARFAESI Act is not a pre-requisite. Reference has been made to judgement of Hon'ble the Supreme Court in Standard Chartered Bank's case (Supra) by learned counsel for respondent no.2 as well as to submit that action taken by the District Magistrate is in accordance with the proceedings of the SARFAESI Act. 6. Reference has been made to judgements of Hon'ble the Supreme Court in Kaniyalal Lalchand Sachdev and others v. State of Maharashtra and others 2011(2) SCC 782 , M/s R.D. Jain and Co. 6. Reference has been made to judgements of Hon'ble the Supreme Court in Kaniyalal Lalchand Sachdev and others v. State of Maharashtra and others 2011(2) SCC 782 , M/s R.D. Jain and Co. v. Capital First Ltd., and Ors., 2022(3) RCR (Civil) 781 and judgement of this High Court in Allahabad Bank v. District Magistrate, Ludhiana and others, CM No. 3178-CWP of 2022 in CWP No. 4916 of 2020, decided on 06.09.2021 to submit that the District Magistrate only performs a purely ministerial act without any adjudicatory function and is only to record his satisfaction in regard to the factual correctness of nine point affidavit filed by the secured creditor. Moreover, any person aggrieved of an order under Section 14 of the SARFAESI Act passed by the District Magistrate has an efficacious remedy as provided in Section 17 of the said Act. Thus this writ petition, it was prayed should be dismissed. 7. Heard learned counsel for the parties. 8. It is undeniable that petitioner has an efficacious alternate remedy for redressal of his grievance as has been raised in this writ petition. While referring to its earlier judgements in Union Bank of India v. Satyawati Tandon and others, 2010(8) SCC 110 , Varimadugu Obi Reddy v. B. Sreenivasulu and others, 2023(1) RCR (Civil) 34 and 771, Hon'ble the Supreme Court in M/s South Indian Bank Limited and others v. Naveen Mathew Philip and another, 2023(1) RCR (Civil) 771 held as under: - "13 We may, however, reiterate the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters, where an effective and efficacious alternative forum has been constituted through a statute. XX XX XX XX 14. A writ of certiorari is to be issued over a decision when the Court finds that the process does not conform to the law or statute. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. XX XX XX XX 15. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. XX XX XX XX 15. The object and reasons behind the Act 54 of 2002 are very clear as observed by this Court in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311 . While it facilitates a faster and smoother mode of recovery sans any interference from the Court, it does provide a fair mechanism in the form of the Tribunal being manned by a legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including repossession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression "any person", who could approach the Tribunal. xx xx xx xx 18. While doing so, we are conscious of the fact that the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal." 9. It has been categorically held by the Hon'ble Supreme Court in the case of Kaniyalal Lalchand Sachdev and others (Supra) and M/s R.D. Jain's case (supra) also that an efficacious remedy under Section 17 of the SARFAESI Act is available to a person aggrieved of an order passed under Section 14 of the said Act. 10. Learned counsel for the petitioner is unable to point out any extraordinary or exceptional circumstance which calls for interference by us in exercise of jurisdiction under Article 226 of the Constitution of India. We thus deliberately refrain from expressing any opinion on the merits of the matter argued before us. Such deliberation is clearly within the realm of consideration by the learned tribunal under the SARFAESI Act. 11. Keeping in view the facts and circumstances as above, this writ petition is dismissed with liberty to the petitioner to avail the statutory remedy/remedies as available to him in accordance with law. Pending application/s, if any, stand disposed of accordingly.