Dismissed

Ms Prince Masala v. State Bank of India

DRT17 Apr 2023SA/207/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application under Section 17 of the SARFAESI Act seeking to quash a District Magistrate's order for physical possession. The Tribunal held the Section 14 order final and challengeable only by High Court or Supreme Court, finding no procedural infirmity in the notice service.

What did the court decide?

Application under Section 17 of SARFAESI Act dismissed with cost.

Ms Prince Masala versus State Bank of India — Banking and Recovery | DRT (2023)

DRT,PATNA

SA 207 of 2022 [J]

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer: Shri KaushalendraYadav

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SA- 207 of 2022

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MIs Prince Masala, through its Proprietor Sri Triveni Prasad, son of late H.P. Choudhary, resident of Prince Masala Company, C-8, Industrial Area, Bela, P.S. - Bela, District - Muzaffarpur.

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. Applicants

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Versus

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Authorized Officer, State Bank of India, SARB, Patna.

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Assistant General Manager, Stressed Assets Recovery Branch, State Bank of India, 2nd floor, Patna Main Branch Building, Patna.

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The Branch Manager, State Bank of India, Bela Branch, Muzaffarpur, District - Muzaffarpur.

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The State of Bihar through the Collector at Muzaffarpur.

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--respondents

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Present:

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For the Applicant : Sh. Ajay Prasad, Advocate For the respondents Bank : Sh. Santosh Kumar Singh, Advocate

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Dated: 17.04.2023

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JUDGMENT

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Present application u/s 17 of SARFAESI Act has been filed with a prayer to set aside the order/notice dated 28.01.2020 issued by the Collector, Muzaffarpur.

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The brief fact of the case is that the applicant availed financial assistance, credit facilities from the respondent bank. Due to default on the part of the borrowers in servicing the loan account, the same was classified as NPA on 27.02.2019. The secured creditor initiated the proceeding under the SARFAESI Act and issued a demand notice u/s 13(2) dated 29.03.2019 calling upon the applicant to make the payment of Rs.42,51,967.00. Further respondent bank took symbolic possession of the secured asset by issuing possession notice dated 25.10.2019 u/s 13(4) of the SARFAESI Act. Thereafter, the respondent bank approached the District Magistrate on 30.12.2019 by filing a petition for physical possession of the secured assets. Accordingly, the District Magistrate passed an order on 26.10.2021 under

DRT,PATNA

SA 207 of 2022 [J]

section 14 of the Act for assistance to the respondent bank for taking physical possession. Aggrieved from the order of Ld. District Magistrate, this SA has been filed by the applicant. During Pendency of SA limitation petition has been filed for condoning the delay in filing SA.

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On the point of limitation, it is stated by the applicant before filing of present SA, the applicant had approached the Hon'ble High Court of Patna in CWJC No.3823 of 2022 against the order of District Magistrate. The said writ was finally decided by the Hon'ble High Court on 13.04.2022 with the direction that "the present writ application is dismissed as withdrawn with the aforesaid liberty. In case, any question of limitation arises, the same shall not stand in the way of the petitioner." It is further stated that due to illness of the applicant, the applicant could not be contacted; therefore, this SA has been filed delayed.

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On the point of merit, it is stated that as per Section 14 proviso mentioned therein that the District Collector can passed order within a period of 30 days from the date of receiving an application, but the same was passed on 26.10.2021 i.e. after lapse of more than a year. Hence, the order passed by the District Collector is not maintainable in the eyes of law as well as does not come under preview of Section 14 of the Act. During pendency of SA, the respondent bank issued auction sale notice dated 06.09.2022 which has been challenged by way of IA 370/2022. It is submitted that the respondent bank without obtaining valuation prior to issue auction sale, the property has been put for auction sale.

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On the contrary, Id. Counsel of the respondent bank submits that the present SA is barred by limitation and not maintainable, hence, the same may be dismissed. It is further submitted that on default in repayment, the account of the borrower/guarantor has been declared as NPA on 27.02.2019. Thereafter, the respondent bank initiated SARFAESI proceeding accordingly, issued demand notice u/s 13(2) dated 29.03.2019 and sent to the borrower through speed post as well as a copy thereof has been made by hand delivery to the Smt. Reena Choudhary who happens to be the wife of the applicant. Against the demand notice, the applicant had sent representation dated 25.05.2019 through his advocate which was duly considered and disposed off. Since, the applicant failed to liquidate the outstanding loan amount, therefore, the respondent bank proceeded further under section 13(4) of the said Act and took possession of the property on

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DRT,PATNA

SA 207 of 2022 [J]

25.10.2019 by issuing possession notice dated 25.10.2019. The possession notice was sent to the appellants/borrower through speed post on 29.10.2019. The possession notice was published in two newspapers namely Dainik Jagran and Times of India on 29.10.2019. The possession notice was affixed on the secured assets. Further, the respondent bank filed a petition under section 14 of the Act before District Magistrate, Muzaffarpur on 30.12.2019 for taking actual physical possession of the secured assets. The applicant also appeared before the District Magistrate. The District Magistrate ordered on 26.10.201 for handing over the secured assets in the account to the bank. However, till date actual physical possession has not been handed over to the bank.

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I have heard Ld. Counsel for the parties and gone through the record.

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On the point of limitation, the applicant has annexed a copy of order dated 13.04.2021 passed by Hon'ble High Court of Patna in CWJC No.3823 of 2022 vide which Hon'ble High Court directed that "the present writ application is dismissed as withdrawn with the aforesaid liberty. In case, any question of limitation arises, the same shall not stand in the way of the petitioner."

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It has been alleged that as per Section 14 proviso the District Collector can pass the order within a period of 30 days from the date of receiving an application, but the same was passed after lapse of more than a year. It is further alleged that without obtaining valuation prior to issue auction sale, the property has been put for auction sale.

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On perusal of records, the S. applicant prayed to quash the order of District Magistrate issued under section 14 of SARFAESI Act.

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In view of the section 14(3) of SARFAESI Act no action taken by the District Magistrate can be challenged for irregularity as such circumstances, this SA is not maintainable.

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Hon'ble Supreme Court in the matter of Harshad Goverdhan Sondagar Vrs Internal Assets Reconstruction Co. on 03.04.2014 observed that above provision attaches finality to the decision and cannot be challenged before any court or authority. It can be challenged before the High Court or Supreme Court.

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Further, it appears that the demand notice was received by Smt. Reena Chaudhary, wife of proprietor of M/s Prince Masala. Thereafter the bank

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DRT,PATNA

SA 207 of 2022 [J]

issued a possession notice dated 25.10.2019 and sent to the applicant through a registered post. Copy of the postal receipt is annexed with the Counter Affidavit of the bank. Further, the possession notice was published in two newspaper namely Dainik Jagran and Times of India on 29.10.2019. The possession notice was affixed on the secured assets. Since the service of notice by registered post may be presumed at the usual time of delivery of registered post. In such circumstances there is no procedural infirmity on the part of respondent in SARFAESI action.

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So far as sale notice dated 09.06.2022 is concerned, neither the applicants nor respondent bank disclosed whether sale has taken place in pursuance of said sale notice or not? As such the sale notice in question has become infructuous.

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In view of the above discussion, the application is liable to be dismissed with cost.

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ORDER

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The application S.A. 207 of 2022 filed under Section 17 of the SARFAESI Act is dismissed with cost with all pending lAs. 7 f ryDV7

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[KaushalendraYk]a~\

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Presiding Officer

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Debts Recovery Tribunal, Patna

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~ Judgment signed, sealed, dated and pronounced in th court on this 17THDay of April, 2023. yoV/ 1- )~\

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[KaushalendraYadav]

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Presiding Officer

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Debts Recovery Tribunal, Patna

Ms Prince Masala v. State Bank of India

Case brief

What is this about?

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Ms Prince Masala v. State Bank of India

Case brief

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