Dismissed

Shri Saurabh Alagh v. Piramal Capital and Housing Finance Ltd.

DRT23 Jan 2023SA/47/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a section 17(1) SARFAESI Act application against a receiver notice as premature and not maintainable because the creditor had not yet taken physical or symbolic possession, thereby lacking the requisite cause of action under the Act.

What did the court decide?

The security interest enforcement application was dismissed as premature and not maintainable for lack of cause of action.

Shri Saurabh Alagh versus Piramal Capital and Housing… — Service and Employment | DRT (2023)

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Debts Recovery Tribunal-Il, Delhi

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sAl47l2023

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SHRI SAURABH ALAGH VS. PIRAMAL CAPITAL & HSG. FIN.LTD.

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23.0L.2023

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Item no. 11

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Present: Shri Sumit Sarna, counsel for applicant.

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This matter is taken up by this Tribunal through Video Conferencing. 1. The present SA has been filed u/s 17(1) of SARFAESI Act against the possession notice issued by the Ld. Receiver for taking the physical possession of the propefi bearing no. A-59 (Old no. WZ 59) area measuring 67 sq.yds, Khasra no. 4008/2704/597, Ahata No. 25, Village Basai Darapur, Colony known as Sudershan Park Extension, New Delhi-110015 on 24.01.2023. The Ld. Counsel for the applicant submitted that till date respondent FI has not taken the symbolic possession of the property in question. It is further submitted that date for taking physical possession by the Receiver fixed for 24.0L.2023 and accordingly it is requested that the respondent Fl/Receiver be restrained from taking the physical possession of the property in question on 24.0 1.2023.

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2, It appears that the instant SA has been filed after having received the notice communication of date about possession to be taken by respondent FIlLd. Receiver.

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First of all, let us see the law related to necessity of cause of action in the application/ plaint for maintainability of any application /suit and the role of tribunal/court.

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In recent decision reported ICL 2021 (9) SC 35 RA]ENDRA BAJORIA AND OTHERS v, HEMANT KUMAR JALAN AND OTHERS,the Hon'ble Supreme court has been pleased to hold that

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"The power conferred on the court to terminate a civil action is a drastic one, and the conditions enumerated under Order VII Rule 11 of CPC are required to be strictly adhered to. Under Order VII Rule 11 of CPC, the duty is cast upon the court to determine whether the plaint discloses a cause of action, by scrutinizing the averments in the plaint, read in conjunction with the documents relied upon, or whether the suit is barre{ by any law." The Hon'ble Apex Court has held that the underlying object of Order VII Rule 11 of CPC is that when a

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A
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plaint does not disclose a cause of action, the court would not permit the plaintiff to unnecessarily protract the proceedings. It has been held that in such a case, it will be necessary to put an end to the sham litigation so that fudher judicial time is not wasted".

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Provisions and case laws related to cause ofaction forfiling SA u/s 17 (1) SARFAESI Act.

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I want to quote the provision u/s 17 (1) SARFAESI Act, which says,

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" Aoolication aoainst measures to recover S 7 :Any person (including borrower), aggrieved by any of the measures refened to in sub-section(4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may make an application along with such fee, as may be prescribedJ to the Debts Recovery Tribunal having^jurisdidion in the matter within fofty-five days from the date on which such measures had been taken.

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Thus there is no doubt that an aggrieved person is entitled to file an application u/s 17 ( 1) SARFAESI Act only when any of the measures

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referred to in sub-section(4) of section 13 taken by the secured creditor wrthinls davqJromlhe on which such measu ln other words, the aggrieved person is not entitled to file SARFAESI application before the measures referred to in sub-section(4) of section 13 is taken by the secured creditorand alsoafter 45 days sincethe said measureshas been taken.

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In a leading case law (Transcore Case), the Hon'ble Supreme Court have been pleased to clariiy the reliefs which can be granted to aggrieved person, who has filed the SARFAESI application in DRTs if the measures referred to in sub-section(4) of section 13 taken by the secured creditor is not found in accordance with SARFAESI Act by interpreting 17 (3) SARFAESI Act.

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In Transcore case it has been observed that the word^"possession" is a relative concept. It is not an absolute concept. The dichotomy beMeen symbolic and physical^possession does not find place in the Act. The scheme of Section 13(4), read with Section 17(3), shows that if the borrower is

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dispossessed, not in accordance with the provisions of the Act, then DRT is entitled to put the clock back by restorang the status quo ante

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Thus, it is clear that without dispossession of

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aggrieved, no remedy is available for him in DRTs.

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In Transcore case, Honble Supreme Court have been pleased to answer this issue after referring to Rule 8,

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"The Supreme Court observes that Rule B provides that till issuance of sale certificate under Rule 9, the Authorised Officer shall take such steps as he deems fit to preserve the secured assets.

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Hon'ble Supreme court further observed that under Section 13(8), if the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the creditor before the date fixed for sale or transfer, the asset shall not be sold or transferred.

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From the above observations made in this^judgment in the light of the provisions of SARFAESI Act and Security Interest (Enforcement) Rules it is clear the

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borrower can seek restoration of possession, which is when possible only

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borrower/ aggrieved person is disposed.

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Further, the remedy in cases filed u/s 17 (1), is incorporated uls 17 (3), which is as follows:

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'17 (3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to the borrower or other aggrieved person, it may, by order,- (a) declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditor as invalid; and (b) restore the possession of secured assets or management of secured assets to the borrower or such other aggrieved person, who has made an application under sub-section (1), as the case may be; and (c) pass such other direction as it may consider appropriate and necessary in relation to

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any of the recourse taken by the secured creditor under sub-section (4) of section 13."

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Thus, it is again clear that without dispossession the remedy of restoration of possession u/s 17 (3) is not possible.

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The Hon'ble Supreme Court of India in Standard Chartered Bank Vs. V. Noble Kumar &Ors., (2013) 9 SCC 620, has observed about the mode of possession and in concluding para 27 that-

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Section 13(4)(a) declares that the secured creditor may take possession of the secured assets. It does not specifu whether such a possession is to be obtained directly by the secured creditor or by resorting to the procedure under Section 14. We are of the opinion that by whatever manner the secured crditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 77 is available, A

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4. Analysis of the facts of this case in the light of above mentioned laws

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On the perusal of the impugned notice, it reveals that Court Receiver has stated on page 2 of the notice that in compliance of the orders passed u/s 14 SARFAESI Act by the Ld. CMM(West), Tis Hazari Courts, Delhi, I am serving you this advance notice that I will take possession of the above said mortgaged propefi on the 24.01.2023 At 2^p.m. l\4eaning thereby, physical possession in terms of 13 (4) was not taken at the time of filing SA in pursuance of the impugned notice.

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It also appears from the CONTENTS OF SA that earlier no symbolic possession was taken in terms of section 13 (4) SARFAESI Act read with Rule 8 Security Interest (Enforcement) Rules.

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Thus, it is clear that S applicant has filed this SA before taking possession in terms of 13 (4) SARFAESI Act as per impugned notice. In other words, it can be concluded that this SA has been

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filed as premature as on the date of its filing

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no cause of action was arisen in terms oF impugned notice. _ ----- ----- :

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_ ----- ----- : (r.\

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In view of above discussion, the present SA is dismissed being premature and not maintainable at this stage as it does not disclose cause of action to maintain this SA u/s 17 (1) SARFAESI Act.

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File be consigned to records.

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ey^l

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(Deepak Nath Tiilari) Presiding Offi cer,DRT-III, Delhi Additional Charge DRT-II, Delhi

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Shri Saurabh Alagh v. Piramal Capital and Housing Finance Ltd.

Case brief

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Shri Saurabh Alagh v. Piramal Capital and Housing Finance Ltd.

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