Disposed

Ismeet Singh Sethi v. Union of India Thru. Secy. Ministry of Finance New Delhi and 3 Others

Allahabad HC23 Jul 2024A482/5247/2024

Case brief

AI extract

What is this about?

Counsel prayed to quash SARFAESI proceedings held outside jurisdiction and stay impugned order. Bench noted material facts and law yet required for decision and issued procedural directions for filing counter-affidavits and listing.

What did the court decide?

Stayed operation of order dated 07.05.2024 and proceedings; notice issued to opposite parties to file counter-affidavits within four weeks.

Ismeet Singh Sethi vs Union of India Thru… — Civil Procedure and Limitation | Allahabad HC (2024)

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Court No. - 27

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Case :- APPLICATION U/S 482 No. - 5247 of 2024

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Applicant :- Ismeet Singh Sethi Opposite Party :- Union Of India Thru. Secy. Ministry Of Finance New Delhi And 3 Others Counsel for Applicant :- Sarvesh Kumar Pandey,Animesh Mishra,Pradeep Maurya

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Counsel for Opposite Party :- A.S.G.I.,G.A.

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Hon'ble Shamim Ahmed,J.

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Heard Sri Sarvesh Kumar Pandey, learned counsel for the applicant and Sri Arpit Kumar, learned A.G.A. for the State.

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The instant application under Section 482 Cr.P.C. has been filed with a prayer to quash the proceedings of complaint case no.35685 of 2024, under Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as well as impugned order dated 07.05.2024.

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Learned counsel for the applicant submits that as per Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Chief Metropolitan Magistrate or the District Magistrate is to assist secure creditor in taking possession of secure assets. The opposite party nos.3 & 4 inspite of approaching the competent authorities have filed an application under Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 before the chief Judicial Magistrate, Lucknow, who has no jurisdiction at all.

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He further submits that as per Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the order dated 07.05.2024, annexed as annexure no.1 to the affidavit filed alongwith the application under Section 482 Cr.P.C. is bad in the eyes of law and has been passed without jurisdiction.

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Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is being reproduced hereunder:-

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"14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.

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(1)Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him

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(a)take possession of such asset and documents relating thereto; and

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(b)forward such asset and documents to the secured creditor.

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[Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that-

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(i)the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application;

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(ii)the borrower has created security interest over various properties and that the Bank or Financial Institution is holding a valid and subsisting security interest over such properties and the claim of the Bank or Financial Institution is within the limitation period;

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(iii)the borrower has created security interest over various properties giving the details of properties referred to in sub-clause (ii) above.

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(iv)the borrower has committed default in repayment of the financial assistance granted aggregating the specified amount;

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(v)consequent upon such default in repayment of the fInancial assistance the account of the borrower has been classified as a nonperforming asset;

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(vi)affirming that the period of sixty days notice as required by the provisions of sub-section (2) of section 13, demanding payment of the defaulted financial assistance has been served on the borrower;

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(vii)the objection or representation in reply to the notice received from the borrower has been considered by the secured creditor and reasons for nonacceptance of such objection or representation had been communicated to the borrower;

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(viii)the borrower has not made any repayment of the financial assistance in spite of the above notice and the Authorised Officer is, therefore, entitled to take possession of the secl1red assets under the provisions of sub-section (4) of section 13 read with section 14 of the principal Act;

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(ix)that the provisions of this Act and the rules made thereunder had been complied with:

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Provided further that on receipt of the affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets [within a period of thirty days from the date of application] [Inserted by Act No. 1 of 2013]:-Provided also that the requirement of filing affidavit stated in the first proviso shall not apply to proceeding pending before any District Magistrate or the Chief Metropolitan Magistrate, as the case may be, on the date of commencement of this Act.] [Substituted by Act No. 44 of 2016.][Provided further that if no order is passed by the Chief Metropolitan Magistrate or District Magistrate within the said period of thirty days for reasons beyond his control, he may, after recording reasons in writing for the same, pass the order within such further period but not exceeding in aggregate sixty days.] [Inserted by Act No. 44 of 2016.]

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(1A)[ The District Magistrate or the Chief Metropolitan Magistrate may authorise any officer subordinate to him,-

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(i)to take possession of such assets and documents relating thereto; and

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(ii)to forward such assets and documents to the secured creditor.]

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(2)For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary.

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(3)No act of the Chief Metropolitan Magistrate or the District Magistrate [any officer authorised by the Chief Metropolitan Magistrate or District Magistrate] [Inserted by Act No. 1 of 2013] done in pursuance of this section shall be called in question in any Court or before any authority."

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He further submits that in view of the above legal position, the entire proceedings as well as the impugned order dated 07.05.2024 passed by the learned Chief Judicial Magistrate, Lucknow is illegal and has been passed without jurisdiction. Thus, he prays for interim relief.

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The matte requires consideration on facts and law both.

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Learned A.G.A. for the State has accepted notice on behalf of the State Opposite Party nos.1 and 2.

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Let notice be issued to the opposite party nos.3 & 4 by R.P.A.D.

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Steps be taken within ten days from today.

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Learned A.G.A. for the State as well as opposite party nos.3 & 4 may file counter affidavit within four weeks.

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Rejoinder affidavit may be filed within two weeks thereafter.

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Put up this case on 23.07.2024.

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Till the next date of listing, the effect and operation of order dated 07.05.2024 as well as further proceeding of complaint case no.35685 of 2024, under Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 shall remain stayed in respect of the applicant.

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Order Date :- 31.5.2024 Saurabh

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Digitally signed by :- SAURABH VERMA High Court of Judicature at Allahabad, Lucknow Bench

Ismeet Singh Sethi v. Union of India Thru. Secy. Ministry of Finance New Delhi and 3 Others

Case brief

What is this about?

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Ismeet Singh Sethi v. Union of India Thru. Secy. Ministry of Finance New Delhi and 3 Others

Case brief

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