Disposed

Iifl Home Finance Limited v. District Collector and District Magistrate

Rajasthan HC7 Aug 2024CW/1239/2024

Case brief

AI extract

What is this about?

Writ petition challenging rejection of a Section 14 SARFAESI Act application by the District Magistrate on technical grounds. Following an earlier decision by this court that DM/CMM powers under Section 14 are ministerial, the High Court quashed the impugned order and remitted the application to the District Magistrate for fresh consideration on merits.

What the court decided

AI extract

Iifl Home Finance Limited Vs District Collector and… — Banking and Recovery | Rajasthan HC (2024)

¶1

[2024:RJ-JP:33658]

¶2

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

¶3

S.B. Civil Writ Petition No. 1239/2024

¶4

Iifl Home Finance Limited, Having Its Registered Office At Iifl House, Sun Infotech Park, Road No. 16B, Plot No. B-23, Thane Industrial Area, Wagle Estate, Thane-400604, Branch Office At 4Th Floor, Vinayak Heights, Gautam Marg, Vaishali Nagar, Jaipur, Rajasthan 302021.

¶5

----Petitioner

¶6

Versus

¶7

District Collector And District Magistrate, Jaipur, Rajasthan.

¶8

Mr. Jatin Dalmiya S/o Mr. Shiv Kumar Dalmiya, M/s J.k. Enterprises, 88, Manvihar Colony, Near Choki Dhani, Tonk Road, Jaipur 302029 Rajasthan. Also At Plot No. 1, Yogi Marg, Majdoor Nagar, Ajmer Road, Jaipur 302006 Rajasthan. Also At Flat No. 410, Star Valley, Plot No. 2 To 7, 4C, Jamunapuri Opp Beacon School, Murlipura, Jaipur 302023 Rajasthan.

¶9

Mrs. Bhavana Agarwal W/o Mr. Jatin Dalmiya, Flat No. 410, Star Valley, Plot No. 2 To 7, 4C, Jamunapuri Opp Beacon School, Murlipura, Jaipur 302023 Rajasthan. Also At Plot No. 1, Yogi Marg, Majdoor Nagar, Ajmer Road, Jaipur 302006 Rajasthan. Also At M/s J.k. Enterprises (Through Its Proprietor/authorised Signatory/managing Director) Flat No. 410, Star Valley, Plot No. 2 To 7, 4C, Jamunapuri Opp Beacon School, Murlipura, Jaipur 302023 Rajasthan. Also At M/s J.k. Enterprises (Through Its Proprietor/authorised Signatory/managing Director) Near Choki Dhani, Tonk Road, Jaipur 302029 Rajasthan.

¶10

----Respondents

¶11

For Petitioner(s) : Mr. Akshat Kulshrestha Mr. Pradeep Rajpurohit

¶12

HON'BLE MR. JUSTICE ANIL KUMAR UPMAN

Order

07/08/2024

[2024:RJ-JP:33658]

[CW-1239/2024]

(2 of 5)

By filing of this writ petition, the petitioner has challenged the order dated 25.07.2023 passed by learned District Magistrate and District Collector, Jaipur by which the misc. application No. 261/2023 filed by the petitioner under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act of 2002) has been rejected.

¶19

Learned counsel for the petitioner submits that application under Section 14 of the SARFAESI Act of 2002 has been rejected on the ground that petitioner has failed to submit the registered title deed of mortgage property. Counsel submits that while rejecting the application filed by the petitioner, a liberty was granted to the petitioner to file fresh application.

¶20

Counsel for the petitioner submits that learned District Magistrate has failed to peruse the provisions contained under Section 14 of the Act of 2002. Counsel submits that at the time of entertaining the application filed under Section 14 of the Act of 2002, learned District Magistrate was supposed to decide the application on its merits not on the technicalities and niceties of law. Counsel submits that at the time of deciding the application, learned District Magistrate was required to see whether or not the secure assets falls within its territorial jurisdiction and whether notice under Section 13(2) of the Act of 2002 was furnished or not. Counsel submits that at this stage, the learned District Magistrate is not expected to act beyond the aforesaid mandate of the Act of 2002. In support of his contention, counsel has placed reliance upon the following judgments:-

[2024:RJ-JP:33658]

[CW-1239/2024]

(3 of 5)

(I) Cholamandalam Investment and Finance Ltd. Vs. The Additional District Magistrate & Ors. (W.P. No.23367/2017) decided on 22.03.2018 by the High Court of Madhya Pradesh Bench at Indore .

¶25

(II) Trade Well, A Proprietorship Firm Vs. Indian Bank, A Body Corporate Consulted reported in AIR 2007 (NOC) 1634 (BOM.) decided on 02.04.2007 by the Bombay High Court.

¶26

Counsel submits that in view of the submissions made hereinabove, the impugned order dated 25.07.2023 passed by learned District Magistrate be quashed and set aside and the matter be remitted to the District Magistrate to decide the application on its merits. 5. Heard and considered the submissions made at Bar and perused the material available on record. 6. The issue involved in this petition is no more res integra as the same has been decided by this Court while deciding the case of Jammu and Kashmir Bank Limited Vs. Ms. Trunks and Roots and Ors. (S.B. Civil Writ Petition No.19747/2023) on 14.03.2024 and it has been held by this Court while entertaining the application filed under Section 14 of the Act of 2002 that the District Magistrate is required to see whether or not the secure assets falls within its territorial jurisdiction and whether the notice under Section 13(2) of the Act of 2002 has been furnished or not. The application filed by the applicant should not be rejected on the technicalities and niceties of law. It has been held in para Nos.7, 9, 10, 11, 12 and 13 of the aforesaid order dated 14.03.2024, which reads as under:-

¶27

“7. On a fair reading of Section 14 of the SARFAESI Act of 2002, it appears that for taking possession of

(4 of 5)

[2024:RJ-JP:33658]

[CW-1239/2024]

the secured assets in terms of Section 14(1) of the SARFAESI Act of 2002, the secured creditor is obliged to approach the District Magistrate/Chief Metropolitan Magistrate (for short ‘DM/CMM’) by way of a written application requesting for taking possession of the secured assets and documents relating thereto and for being forwarded to it (secured creditor) for further action.

¶32

Thus, the powers exercisable by CMM/DM under Section 14 of the SARFAESI Act of 2002 are ministerial step and Section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured assets. In that view of the matter once all the requirements under Section 14 of the SARFAESI Act of 2002 are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an advocate appointed as Advocate Commissioner. At that stage, the CMM/DM is not required to adjudicate the dispute between the borrower and the secured creditor and/or between any other third party and the secured creditor with respect to the secured assets and the aggrieved party to be relegated to raise objections in the proceedings under Section 17 of the SARFAESI Act of 2002, before Debts Recovery Tribunal.

¶33

A perusal of the aforesaid provision clearly indicates that nature of powers under Section 14 of the SARFAESI Act of 2002 is vested with the District Magistrate is ministerial and executory and not adjudicating as the Hon’ble Apex Court in the case of Standard Chartered Bank & Ors. Vs. V. Noble Kumar and Ors. reported in MANU/SC/0874/2013 has held that the satisfaction of the Magistrate contemplated under the second proviso to Section 14(1) of the SARFAESI Act of 2002 necessarily requires the Magistrate to examine the factual correctness of the assertions made in such an affidavit but not the legal niceties of the transaction. It has been observed that the DM has exercised the role of adjudicating authority by citing the reason. Hon’ble Apex Court has time and again reiterated that the role of DM is ministerial in nature so far as section 14 of the SARFAESI Act of 2002, is concerned and not that of adjudication. In number of cases, it is seen that the orders are being passed as per convenience of the officer concerned without following the mandate of the Apex Court.

¶34

In the considered opinion of this Court, the DM has travelled beyond the scope of Section 14 of the

(5 of 5)

[2024:RJ-JP:33658]

[CW-1239/2024]

SARFAESI Act of 2002 and thereafter transgressed its jurisdiction by decding the application filed by the petitioner.

¶39

Keeping in view the aforesaid settled proposition of law, the order impugned is not sustainable in the eye of law and the same is liable to be quashed and set aside.

¶40

Accordingly, the order impugned dated 09.01.2023 stands quashed and set aside. The matter is remitted back to the learned District Magistrate, Jaipur to re-register the application filed by the petitioner under Section 14 of the SARFAESI Act of 2002 on its original number and proceed with the matter strictly in accordance with law.”

¶41

In view of the above, impugned order dated 25.07.2023 passed by learned District Magistrate and District Collector, Jaipur in the misc. application No. 261/2023 and set aside. The matter is remitted to the learned District Magistrate concerned to re-register the application filed by the petitioner under Section 14 of the Act of 2002 on its original number and proceed with the matter strictly in accordance with law.

¶42

The instant writ petition stands disposed of. Stay application and all application(s) (pending, if any) also stand disposed of.

¶43

(ANIL KUMAR UPMAN),J

¶44

LALIT MOHAN /85

Iifl Home Finance Limited v. District Collector and District Magistrate

Case brief

What is this about?

What the court decided

Iifl Home Finance Limited v. District Collector and District Magistrate

Case brief

What is this about?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Rajendra Prasad Meena S/O Shri Bansi Lal Meena Vs State of Rajasthan

Rajaram S/O Shri Tulsi Vs Omprakash S/O Jhitya

Sh. Ashok Kumar Mehrwal S/O Sh. Hari Narayan Mahrwal Vs Reliance Asset Reconstruction Company Ltd.

Madanlal Vs Appellate Retn Tribunal Ors.

Tundaram @ Hanuman S/O Boduram Vs Add. Collector (Forth)

G.N. Buildev Pvt. Ltd. Vs Micro and Small Enterprise Facilitation Council