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2024 DIGILAW 314 (CHH)

Equitas Small Finance Bank Ltd. v. Collector And District Magistrate Raipur

2024-04-09

RAKESH MOHAN PANDEY

body2024
ORDER : 1. By way of this petition, the petitioner has sought the following relief(s):- “10.1 That, this Hon’ble Court may kindly be pleased to pass any appropriate writ, order setting aside/quashing the order dated 23.02.2024 passed by the Respondent No. 2 whereby the Respondent No. 2 has stayed the proceedings of taking physical possession of the properties mortgaged by the respondent no. 3 to 5. 10.2 Any other relief or relief(s) which this Hon’ble Court may deem fit and proper in view of the facts and circumstances of the case, may also kindly be granted.” 2. Learned counsel for the petitioner would submit that in a proceeding initiated by the petitioner Bank, an order was passed by the District Magistrate on 10.07.2023 under Section 14 of the SARFAESI Act, 2002. He would further submit that the order was forwarded to the Additional Tahsildar, Raipur for compliance, but the Additional Tahsildar exceeding its jurisdiction, refused to execute the order passed by the District Magistrate on the ground that S.A. has already been filed before the Debt Recovery Tribunal (DRT). He would also submit that the approach of the Additional Tahsildar was erroneous and contrary to the well-settled principles of law. 3. In support of his submissions, he placed reliance on the judgment passed by the Hon’ble Supreme Court in the matter of Kotak Mahindra Bank Ltd. vs. Girnar Corrugators Pvt. Ltd., (2023) 3 SCC 210 . 4. On the other hand, Ms. Siddiqui would oppose the submissions made by Mr. Singhal. She would submit that though the order was passed by the District Magistrate under Section 14 of the SARFAESI Act, 2002, respondents No. 3 to 5 approached the DRT and the matter is still pending before it. She would further submit that as the matter is still pending before the DRT, the Additional Tahsildar, Raipur is justified in staying the further proceeding for taking possession. She would also submit that the petitioner may approach the concerned Tahsildar raising its grievances and the present petition deserves to be dismissed. 5. Mr. Swajeet Singh Ubeja would oppose the submissions made by Mr. Ankit Singhal. 6. I have heard counsel appearing for the parties and perused the documents present on the record. 7. She would also submit that the petitioner may approach the concerned Tahsildar raising its grievances and the present petition deserves to be dismissed. 5. Mr. Swajeet Singh Ubeja would oppose the submissions made by Mr. Ankit Singhal. 6. I have heard counsel appearing for the parties and perused the documents present on the record. 7. The petitioner moved an application before the District Magistrate, Raipur according to the provisions of Section 14 of the SARFAESI Act, 2002 and the same was allowed vide order dated 10.07.2023. The District Magistrate, Raipur directed the Additional Tahsildar, Raipur to hand over the physical possession of the property to the petitioner. 8. Admittedly, the borrowers approached the D.R.T. and S.A. No. 49 of 2024 is pending before the D.R.T., but there is no interim order in favour of the borrowers. The Additional Tahsildar ought to have followed the order passed by the District Magistrate on an application moved by the petitioner under Section 14 of the SARFAESI Act, 2002. 9. The Hon’ble Supreme Court while dealing with a similar issue in the matter of Kotak Mahindra Bank Ltd. (supra) in para 33, 34 & 35 observed and held as under: - “33. Even otherwise the Naib Tehsildar was not at all justified in not taking possession of the secured assets/properties as per order dated 24.09.2014 passed by the District Magistrate under Section 14 of the SARFAESI Act. The order passed by the Naib Tehsildar refusing to take possession of the secured assets/properties despite the order passed under Section 14 of the SARFAESI Act on the ground that recovery certificates issued by respondent No.1 for recovery of the orders passed by the Facilitation Council are pending, is wholly without jurisdiction. While exercising power under Section 14 of the SARFAESI Act, even the District Magistrate has no jurisdiction and/or District Magistrate and/or even the Chief Metropolitan Magistrate has no jurisdiction to adjudicate the dispute between secured creditor and debtor. 34. Under Section 14 of the SARFAESI Act, the District Magistrate or the Chief Metropolitan Magistrate as the case may be is required to assist the secured creditor in getting the possession of the secured assets. Under Section 14 of the SARFAESI Act, neither District Magistrate nor Metropolitan Magistrate would have any jurisdiction to adjudicate and/or decide the dispute even between the secured creditor and the debtor. Under Section 14 of the SARFAESI Act, neither District Magistrate nor Metropolitan Magistrate would have any jurisdiction to adjudicate and/or decide the dispute even between the secured creditor and the debtor. If any person is aggrieved by the steps under Section 13(4)/order passed under Section 14, then the aggrieved person has to approach the Debts Recovery Tribunal by way of appeal/application under Section 17 of the SARFAESI Act. 35. Therefore, the order passed by the Naib Tehsildar refusing to take the possession pursuant to the order passed by the District Magistrate under Section 14 of the SARFAESI Act was wholly without jurisdiction and therefore also the same was liable to be set aside.” 10. As there is no interim order in favour of the borrowers by the D.R.T., the contention raised by the learned counsel appearing for respondent No. 5 cannot be accepted and further there is a need for the petitioner to apprise the Additional Tahsildar to initiate proceeding pursuant to the order passed by District Magistrate under Section 14 of the SARFAESI Act, 2002. 11. Taking into consideration the law laid down by the Hon’ble Supreme Court and the scheme given under Section 14 of the SARFAESI Act, 2002, in the opinion of this Court, the Additional Tahsildar committed an error of law in not following the order passed by the District Magistrate under Section 14 of the SARFAESI Act, 2002. Consequently, the order passed by the Additional Tahsildar dated 23.02.2024 staying the further proceedings to hand over the possession of the property to the petitioner is hereby quashed/set aside. Accordingly, the present petition is allowed. 12. The Additional Tahsildar, Raipur is directed to proceed strictly in accordance with law pursuant to the order passed by the District Magistrate, Raipur.