Allowed

J C Flowers Asset Reconstruction Pvt. Ltd. v. Neptune Travels India Private Limited

Karnataka HC6 Feb 2024WP/3430/2024

Case brief

AI extract

What is this about?

An asset reconstruction company assigned Yes Bank's loan sought Section 14 SARFAESI assistance; the Magistrate rejected its application for want of a direct transaction. The High Court held this ignored statutory provisions and remanded for fresh orders.

What did the court decide?

Impugned order dated 23.10.2023 set aside; matter remitted to the Magistrate to pass orders on the petitioner's application within three weeks.

J C Flowers Asset Reconstruction Pvt. Ltd. Vs Neptune… — Banking and Recovery | Karnataka HC (2024)

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NC: 2024:KHC:5018 WP No. 3430 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF FEBRUARY, 2024

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA

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WRIT PETITION NO. 3430 OF 2024 (GM-RES)

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BETWEEN:

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Digitally signed by PADMAVATHI B K Location: HIGH COURT OF KARNATAKA

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J C FLOWERS ASSET RECONSTRUCTION PVT. LTD. (ASSIGNEE OF YES BANK) AN ASSET RECONSTRUCTION COMPANY REG. UNDER SECTION 3 OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002, ACTING IN ITS CAPACITY AS JCF YES TRUST 2022-23/1, HAVING ITS REGISTERED OFFICE AT: UNIT NO.203-206, 2^ND FLOOR, WING A, INSPIRE BKC, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 REPRESENTED BY ITS SENIOR ASSOCIATE MR MANIMARAN S …PETITIONER

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(BY SRI. SHETTY VIGNESH SHIVARAM.,ADVOCATE)

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AND:

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NEPTUNE TRAVELS INDIA PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT NO.49, SUBBARAMA CHETTY ROAD, N R COLONY, BASAVANAGUDI, BENGALURU-560004 REP. BY MR HARINDER KUMAR AGARWAL

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2 - NC: 2024:KHC:5018 WP No. 3430 of 2024

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MR HARINDER KUMAR AGARWAL S/O MR MADAN SWAROOP AGARWAL AGED ABOUT 59 YEARS R/AT NO.157, 8^TH MAIN, GIRINAGAR, 3^RD PHASE BENGALURU-560085

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MRS UMA AGARWAL S/O MR HARINDER KUMAR AGARWAL AGED ABOUT 58 YEARS R/AT NO.157, 8^TH MAIN, GIRINAGAR, 3^RD PHASE BENGALURU-560085

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MRS. MONICA AGARWAL D/O MR HARINDER KUMAR AGARWAL MAJOR R/AT: F-806, RXTON BLOCK, DIVYASHREE, ELAN HOMES, KAIKONDRAHALLI BENGALURU-560035

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…RESPONDENTS

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO a) TO SET ASIDE THE ORDER DATED 23/10/2023 BY THE LEARNED CJM RURAL COURT, BANGALORE IN CRL.MISC. NO.608/2022 (ANNEXURE-A). b) TO DIRECT THE JURISDICTIONAL POLICE TO ASSIST THE PETITIONER TO TAKE PHYSICAL POSSESSION OF THE SCHEDULE PROPERTY (ANNEXURE-C, D AND E).

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner an assignee from Yes Bank under

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Section 3 of the Securitization and Reconstruction of Financial

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NC: 2024:KHC:5018 WP No. 3430 of 2024

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Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act') is knocking at the doors of this Court seeking quashment of an order dated 23.10.2023 by which the learned Magistrate rejects the application/petition of the petitioner under Section 14 of the SARFAESI Act, holding that there was no transaction between the petitioner and the borrower.

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2. Heard the learned counsel Sri. Shetty Vignesh

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Shivaram, appearing for the petitioner .

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Respondent Nos.2, 3 and 4 appear to have availed finance from Yes Bank Limited. The finance becomes sticky and proceedings are sought to be initiated by Yes Bank. The petitioner emerges later when the assignor, the Yes Bank assigned the finance in favour of the petitioner 'The Asset Reconstruction Company' under Section 3 of the SARFAESI Act, 2002.

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After the said assignment, the petitioner knocks at

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the doors of the learned Magistrate under Section 14 of the SARFAESI Act 2002 and files an application before the learned Magistrate seeking transposition of his name in place of Yes

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4 - NC: 2024:KHC:5018 WP No. 3430 of 2024

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Bank on the score that he is an assignee from the hands of Yes Bank. This comes to be rejected by the impugned order on the score that there is no transaction between the petitioner and the respondent-borrower.

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The learned Magistrate appears to have fallen in error, as the statutory provisions are not even noticed by the learned Magistrate. Though order under Section 14 of the SARFAESI Act is already passed in favour of the Yes Bank; Yes Bank has now assigned the loan to the petitioner the Asset Reconstruction Company.

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In the light of the said assignment, the petitioner has now stepped into the shoes of the lender i.e., the Yes Bank. Therefore, the learned Magistrate ought to have passed appropriate orders, in accordance with law by perusal at the statutory provisions.

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For the aforesaid reasons, it now becomes necessary for the learned Magistrate to pass appropriate orders, in accordance with law. Hence, the following:

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ORDER

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i) The writ petition is allowed;

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NC: 2024:KHC:5018 WP No. 3430 of 2024

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ii) The order dated 23.10.2023 passed by the learned CJM Rural Court, Bangalore in Crl.Misc.No.608/2022 is set aside.

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iii) The matter is remitted back to the hands of the learned Magistrate to pass necessary orders, qua the application filed by the petitioner, in accordance with law, bearing in mind the observations made during the course of the order, within three weeks from the date of the receipt of the copy of the order.

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Sd/JUDGE

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KG List No.: 1 Sl No.: 32

J C Flowers Asset Reconstruction Pvt. Ltd. v. Neptune Travels India Private Limited

Case brief

What is this about?

What did the court decide?

J C Flowers Asset Reconstruction Pvt. Ltd. v. Neptune Travels India Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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