Allowed

K.Thiyagarajan v. The Chief Judicial Magistrate

Madras HC7 Dec 2020WP/17167/2020

Case brief

AI extract

What is this about?

The High Court of Madras disposed of a writ petition challenging the non-notice requirement prior to an application under Section 14(1) of the SARFAESI Act. Upholding the precedent that prior notice is not required, the court deferred possession action pending the disposal of a related interim relief petition by the Debts Recovery Tribunal.

What did the court decide?

Directed the Debts Recovery Tribunal to dispose of SA.No.392 of 2019 within three weeks; directed the 1st respondent to defer further action under the impugned order pending such disposal.

K.Thiyagarajan Vs The Chief Judicial Magistrate — Banking and Recovery | Madras HC (2020)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED 07.12.2020

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CORAM

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THE HONOURABLE MR. JUSTICE M.SATHYANARAYANAN

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AND

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THE HONOURABLE MRS. JUSTICE R.HEMALATHA

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WP.No.17167/2020 & WMP.Nos.21216, 21219 & 21222/2020

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K.Thiyagarajan ..Petitioner

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Versus
1. The Chief Judicial Magistrate
Bhagiyam Layout, Arts College Road
Combined Court Complex,
Gopalapuram, Coimbatore 641018.

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The Authorised Officer
State Bank of India,
Coimbatore City Branch
Door No.718-719,
Oppanakkara Street
Coimbatore 641 001. ..Respondents

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Prayer:Writ petition filed under Article 226 of the Constitution of India praying for issuance of a writ of certiorarified mandamus calling for the records relating order dated 12.02.2020 in Crl.MP.No.1232 of 2019 passed by the 1^st respondent and quash the same and direct the 1^st respondent to grant opportunity of personal hering and reply to the petitioner and to pass final orders upon Sec 14 or any other like proceedings initiated by the 2^nd respondent Bank.

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ORDER

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[Order of the Court was made by M.SATHYANARAYANAN, J.]

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(1) By consent, the writ petition is taken up for final disposal and is disposed of by this order.

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(2)Mr.M.L.Ganesh, learned Standing counsel accepts notice on https://hcservices.ecourts.gov.in/hcservices/ behalf of the 2^nd respondent/Bank.

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(3)The petitioner availed financial assistance from the 2^nd respondent/Bank for carrying on business in home appliances and due to vagaries of the business, he suffered loss. The 2^nd respondent/Bank declared the Accounts of the petitioner has Non Performing Assets and thereafter, by invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 [in short ''SARFAESI Act''], has issued notice dated 29.01.2019 under Section 13[2] of the SARFAESI Act, calling upon the petitioner / borrower to settle the outstanding amount of Rs.52,88,309/- due as on 28.01.2019 within the stipulated period, failing which, further action would follow. It appears that the petitioner did not comply with the terms of the said notice and therefore, the 2^nd respondent/Bank had issued the Possession Notice dated 06.07.2019.

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(4)The petitioner herein, aggrieved by the Possession Notice dated 06.07.2019, filed SA.No.392 of 2019 along with the prayer for interim relief and the same is pending before the Debts Recovery Tribunal, Coimbatore. In the meanwhile, the 2^nd respondent/Bank has invoked the jurisdiction of the 1^st respondent by filing an application under Section 14[1] of the SAFAESI Act for taking actual physical possession of the secured assets and it came to be ordered and an Advocate Commissioner was also appointed for taking actual physical possession and he has also issued Notice dated 20.03.2020 to the petitioner. The petitioner, aggrieved by the order of the 1^st respondent dated 12.02.2020 in Crl.MP.No.1232/2019 passed u/s.14[1] of the SARFAESI Act, came forward to file the present writ petitin.

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(5)The learned counsel for the petitioner has drawn the attention of this Court to the typed set of documents and would submit that admittedly, the 1^st respondent, before passing the impugned order, has failed to put the petitioner on notice and despite the fact that SA.No.392 of 2019 is pending along with the prayer for interim relief, on the file of the DRT, Coimbatore, it could not be taken up for want of Presiding Officer and very recently, the Presiding Officer has been posted and till such time the Tribunal dispose of the petition for interim relief, this Court may direct the 1^st respondent to defer further action in terms of the impugned order. He would also submit on instructions that the actual physical possession of the secured assets is yet to be taken by the learned Advocate Commissioner.

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(6) Per contra, Mr.M.L.Ganesh, learned Standing counsel appearing for the 2^nd respondent/Bank has drawn the attention of this Court to the Judgment of the Hon'ble Supreme Court of India reported on 2019 SCC Online SC 1242 [Authorised Officer, Indian Bank V. D.Visalakshi and Another] as well as the decision rendered by a Division Bench of this Court reported in 2020 [2] WLR 493 : 2020 [6] CTC 582 [Tamil Nadu Mercantile Bank and Others Vs. The District Magistrate / District Collector, Tiruvallur and Others] and would that

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https://hcservices.ecourts.gov.in/hcservices/ for invoking and passing orders u/s.14[1] of SARFAESI Act,

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the 1^st respondent need not put the borrower/petitioner herein on notice and since action has been taken strictly by resorting to due process of law, the petitioner cannot make any complaint/grievance and prays for dismissal of this writ petition with cost.

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(7)This Court has considered the rival submissions and also perused the materials placed before it.

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(8)In the light of the above well settled legal position as enunciated by the Apex Court of India which has been followed by the Division Bench of this Court in the above cited decision, the petitioner is not entitled to any prior notice before filing the application u/s.14[1] of the SARFAESI Act. However, this Court taking into consideration of the fact that SARFAESI Application in SA.No.392 of 2019 along with the petition for interim relief [paragraph No.XIV] is pending for quite long time, directs the Debts Recovery Tribunal, Coimbatore, to consider and dispose of the said prayer for interim relief in accordance with law as expeditiously as possible and not later than three weeks from the date of receipt of a copy of this order and till such time, the 1^st respondent shall defer further decision in pursuant to the impugned order dated 12.02.2020. It is also made clear that the petitioner, till the disposal of SA.No.392 of 2019, shall not create any third party rights in respect of the secured assets.

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