Allowed

Axis Bank v. Smt Lavina Murarka and Ors.

DRAT18 Mar 2025MISC APPEAL/73/2024

Case brief

AI extract

What is this about?

This appellate tribunal allowed an appeal against a DRT order restraining a bank from taking coercive action. The court set aside the impugned order and directed the DRT to decide the interim application on merits after hearing parties, citing the Apex Court that physical attempt to take possession is not mandatory before approaching the Magistrate under Section 14 of the SARFAESI Act.

What did the court decide?

The impugned order of the DRT was set aside. The application was remanded with a direction to decide on merits after hearing the parties.

Axis Bank versus Smt Lavina Murarka and Ors. — Banking and Recovery | DRAT (2025)

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Reportable/Non-Reportable

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Misc. Appeal No. 73 of 2024-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Misc. Appeal No. 73 of 2024 (Arising out of I.A. 3110 of 2024 in S.A. 676 of 2024 in DRT-III, Kolkata)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

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CHAIRPERSON

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The Authorized Officer, Axis Bank, working for gain at 1, Shakespeare Sarani, 4^th Floor, A.C. Market Building, Police Station-Shakespeare Sarani, Kolkata - 700 071;

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Axis Bank, a banking company having its registered office at Trishul Opp. Samartheshwar Temple, Ellis Bridge, Ahmedabad – 780 006 and carrying on business, inter alia, from its branch office at 1, Shakespeare Sarani, 4^th Floor, A.C. Market Building, Police Station-Shakespeare Sarani, Kolkata – 700 071.

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… Appellants

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-Versus-

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Smt. Lavina Murarka, wife of Shri Anup Murarka, residing at Flat No. 1F, First Floor, Yellow Block, 4, Chakraberia Lane, Police Station - Ballygunj, L.R. Sarani, Kolkata – 700 020;

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Mr. Sparsh Murarka, son of Shri Anup Murarka, residing at Flat No. 1F, First Floor, Yellow Block, 4, Chakraberia Lane, Police Station - Ballygunj, L.R. Sarani, Kolkata – 700 020;

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Shri Anup Murarka, son of Ramnath Murarka, at present residing at 78, Block-B, Lake Town, Third Floor, Kolkata – 700 089.

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	… Respondents
Counsel for Appellants …	Mr. Pankaj Kumar Mukherjee Mr. Sayak Ranjan Ganguly Ms. Chaitali Acharjee
Counsel for Respondents …	Mr. Ramesh Chandra Prusti Mr. Sanjib Das Ms. Alisha Kar Ms. Moumita Roy
JUDGMENT :	18^thMarch, 2025
THE APPELLATE TRIBUNAL :

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Heard the Learned Counsel for the parties and perused the record.

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2. Instant appeal has been preferred against an order dated 19.8.2024 passed by Learned DRT-III, Kolkata in

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Misc. Appeal No. 73 of 2024-DRAT-Kolkata I.A. 3110 of 2024 in S.A. 676 of 2024 (Smt. Lavina Murarka & Another -vs- Axis Bank & Others).

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3. Respondents in the appeal are SARFAESI Applicants who had availed loan from the Secured Creditor/Appellant. Loan account became irregular and was classified as N.P.A. Notice under Section 13 (2) of the SARFAESI Act, 2002 (hereinafter referred to as the ‘Act’) was issued by the Bank on 18.3.2023. Thereafter, an order dated 19.4.2024 was obtained by the Secured Creditor from the Learned Chief Judicial Magistrate, Alipore which was challenged by the Respondents by filing I.A. 3110 of 2024 on the ground that the said order is obtained without taking symbolic possession, as required under Section 13 (4) of the Act. Consequent thereto, Learned DRT restrained the Bank from taking any coercive action in respect of the secured assets. Feeling aggrieved by this observation and direction, Appellant has preferred the instant appeal.

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4. Feeling aggrieved, the Appellant has preferred the instant appeal. 5. At the very outset, Learned Counsel for Appellants would submit that the Appellants have obtained the order of the Learned Chief Judicial Magistrate in accordance with law. Learned Counsel has placed reliance upon paragraph 26 of the judgment of the Hon’ble Apex Court in the case of Standard Chartered Bank -vs- Nobel Kumar & Others [(2013) 9 SCC 620). On the strength of the judgment Learned Counsel submits that the Secured Creditor was well within its powers

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Misc. Appeal No. 73 of 2024-DRAT-Kolkata to seek an order from the Learned Chief Judicial Magistrate under Section 14 of the Act.

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6. Per contra, Learned Counsel for Respondents submits that Learned DRT has passed the order in accordance with law. It was incumbent upon the Secured Creditor to issue a notice under Section 13 (4) of the Act which should be in consonance with the provisions of Section 13 (2) of the Act. It is further submitted that where a specific provision in the statue provides to act in a particular manner that act should be done by the concerned authority in that manner. No deviation can be made. It is further submitted that since no notice under Section 13 (4) of the Act was issued by the Secured Creditor and directly an order under Section 14 of the Act was obtained which is against law. Learned Counsel further submits that the impugned order, passed by Learned DRT, is also challenged by the Respondents before the Hon’ble High Court by preferring a Writ Petition. 7. As far the contention of the Learned Counsel for Respondent is concerned, no doubt where a specific provision in the statue provides to act in a particular manner that act should be done in that manner. No deviation can be made. However, Section 13 (2) provides for issuance of notice and thereafter sixty days time is granted to the Borrower to discharge its liability failing which the Secured Creditor will be entitled to exercise all or any other rights under Sub-section (4) of Section 13 of the Act. Section 13 (4) (a) of the Act provides that when the Borrower fails to discharge his liability in full, Secured

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Misc. Appeal No. 73 of 2024-DRAT-Kolkata Creditor may take possession of the secured assets of the Borrower, including the right of transfer by way of lease, assignment or sale for realising the secured assets. The only rider is that the possession can only be taken by the Secured Creditor not before expiry of sixty days of the notice issued under Section 13 (2) of the Act. Where the Secured Creditor can obtain an order from the District Magistrate under Section 14 of the Act is dealt with by the Hon’ble Apex Court in Nobel Kumar (supra) wherein it was held in paragraph 26 that :

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“26. It is in the abovementioned background of the legal frame of Sections 13 and 14, we are required to examine the correctness of the conclusions recorded by the High Court. Having regard to the scheme of Sections 13 and 14 and the object of the enactment, we do not see any warrant to record the conclusion that it is only after making an unsuccessful attempt to take possession of the secured asset, a secured creditor can approach the Magistrate. No doubt that a secured creditor may initially resort to the procedure under Section 13(4) and on facing resistance, he may still approach the Magistrate under Section 14. But, it is not mandatory for the secured creditor to make attempt to obtain possession on his own before approaching the Magistrate under Section 14. The submission that such a construction would deprive the borrower of a remedy under Section 17 is rooted in a misconception of the scope of Section 17.”

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8. Hon’ble Apex Court specifically held that it is not mandatory for the Secured Creditor to make attempt to obtain possession on his own before approaching the District Magistrate under Section 14 of the Act. Learned Counsel for Appellant submits that notice under Section 13 (4) was served on 1^st August, 2024. Order, passed by the Learned Chief Judicial Magistrate, is yet to be executed.

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9. As far as issue of filing of Writ Petition by the Respondents is concerned, an oral submission is made by the Learned Counsel. It is neither stated in the opposition

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Misc. Appeal No. 73 of 2024-DRAT-Kolkata nor any copy of the order passed by Hon’ble High Court is filed. Nothing is brought on record to show as to what is the number of Writ Petition and whether it is admitted by the Hon’ble High Court or not? Whether any notice is issued in the Writ Petition or not? Whether any stay order is passed by the Hon’ble High Court or not? In such circumstances, I do not find any substance in the submission made by the Learned Counsel for Respondents.

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10. It is admitted in the Memo of Appeal that the order passed by the Learned Chief Judicial Magistrate on 29.4.2024 and 26.6.2024 have lost its relevance and are not enforceable in law. Further it is also admitted that the Possession Notice issued under Section 13 (4) of the Act and Rules 8 (1) of the Security Interest (Enforcement) Rules gains significance. Further it is admitted that the matter could be heard on merits upon exchange of affidavits.

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11. In view of the averments made in the Memo of Appeal, I am of the view that Learned DRT should decide I.A. 3110 of 2024 on its own merits.

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12. In such circumstances, I am of the view that the impugned order deserves to be set aside with the observation made in the body of the judgment.

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O R D E R

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Appeal is allowed. The impugned order dated 19.8.2024 passed by Learned DRT-III, Kolkata in I.A. 3110 of 2024 in S.A. 676 of 2024 (Smt. Lavina Murarka & Another -vs- Axis Bank & Others) is set aside with a

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Misc. Appeal No. 73 of 2024-DRAT-Kolkata direction to the DRT to decide the I.A. in view of the observation made in the body of the judgment and in accordance with law after affording opportunity of hearing to the parties.

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No order as to costs.

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Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

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File be consigned to Record room.

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Order signed and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 18^th March, 2025 20/ac

Axis Bank v. Smt Lavina Murarka and Ors.

Case brief

What is this about?

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Axis Bank v. Smt Lavina Murarka and Ors.

Case brief

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What did the court decide?

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