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2015 (9) TMI 451 - BOMBAY HIGH COURT

2015 (9) TMI 451 - BOMBAY HIGH COURT - TMI - Validity of notice u/s 13(2) and u/s 13(4) of the SARFAESI Act - right of the third party - Territorial Jurisdiction of Debt Recovery Tribunal (DRT) - secured creditor to take possession of the secured assets. - Held that:- this Writ Petition ex-facie was not maintainable. The petitioner throughout knew that the remedy of the petitioner to challenge any order in the Securitisation Appeal No.4 of 2012 was not to approach this Court directly. Further, e .....

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cially affected in the event the possession is taken over and of the factory premises. If really the third party was in possession, all these facts could have been brought to the notice of the officials and while executing the notice or enforcing it, that third party could have and if genuinely apprehensive, pointed out to these officials and the Police machinery as well that it has nothing to do with the transactions between the bank and the borrower and are put in possession under a valid and .....

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nclusions equitable and discretionary reliefs were denied by the DRT.

The petitioner's appeal / Securitisation Appeal No.4 of 2012 is pending and all this was known to the petitioner. Yet, after inducting a alleged third party in possession and to facilitate it, such collusive proceedings are brought before this Court. In the present circumstances really the protection given by this Court is completely misused and to institute multiple proceedings.

Writ Petition dismissed w .....

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ion of India, the petitioner has sought various reliefs. The prayer clauses are verbose and a narration of nothing but submissions in the earlier paragraphs of the petition. The essential relief that is claimed is that a notice under section 13(2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "SARFAESI Act") dated 9th May 2011, and a notice / order dated 18th February, 2013 / 11th July, 2014, under section 13(4) o .....

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n appeal under section 17(1) of the SARFAESI Act is an original proceeding. It is akin to a suit. Therefore, the DRT within whose territorial limitation the cause of action arises alone is empowered to determine and try it. In the circumstances, this Court should declare that the DRT before whom an application is filed by the State Bank of India and under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (for short "RDB Act") is not maintainable. It is also not ma .....

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ary in nature. It is not controlled nor circumscribed, leave alone restricted by ordinary law. Therefore, it can always grant declaratory reliefs. The declaratory reliefs that are claimed are based on pure questions of law. If the DRT which has been approached by the present petitioner by filing Securitisation Appeal No. 4 of 2012 is a substitute for a civil court and jurisdiction, power and authority of an ordinary civil court is barred, then, an original proceeding must be tried in accordance .....

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T or the Appellate Tribunal is empowered by or under the SARFAESI Act to determine, cannot be exercised. Our attention is invited to the section which empowers the enforcement of security interest falling Chapter III, namely, section 13. Our attention is invited to sub-section (2) of section 13 and to submit that the borrower who is under a liability to a secured creditor under a security agreement makes any default in repayment of the secured debt or any installment thereof, and his account in .....

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the secured creditor has a discretion to take recourse to the measures. In this case, the satisfaction that is reached allegedly is not in terms of these provisions. Further, the authorised officer acting in terms of these provisions is an employee or officer of the Bank. It is no forum in the eyes of law. He is a coram non-judice. The whole inquiry is a farce and for all these reasons the appeal to the Tribunal must be meaningful and purposeful. The Tribunal must have all powers and is indeed .....

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lication No.17 of 2011 instituted by the bank viz. State Bank of India as also the proceedings under the SARFAESI Act. It is in these circumstances that it is prayed that this Court should grant the reliefs. 5. The written note of submissions highlights the oral arguments in details and by relying on legal provisions. The petition is also containing the same contentions but they are supported by precedents. Paras after paras from Supreme Court judgments are reproduced making the record of the pe .....

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or seeking discretionary and equitable reliefs that the petitioner approached this Court. When this matter was moved, this Court was informed that the Presiding Officer of the Debts Recovery Appellate Tribunal (for short "DRAT") is not available in Mumbai and, therefore, the petitioner-appellant is not in a position to avail of that remedy to challenge the order passed on 23rd April, 2015 by the DRT-I in Securitisation Appeal No.4 of 2012. 7. Further, this Court was told and informed t .....

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inasmuch as taking advantage of this Court's interim order, a third party - Pravin Wipers and Ancillaries Pvt. Ltd. filed a suit in the court of Civil Judge, Senior Division, Vasai against one Unnikrishnan Nambiar, Director of the present petitioner and the bank and on the assertion that the premises belong to and are owned by the said Unnikrishnan Nambiar. However, from 1st November, 2012, the said Nambiar has handed over the property / premises viz. Survey No.65, Hissa No.2 (Part) Jeevan .....

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e, Senior Division, passed a protective order but what the contesting respondents to this Writ Petition have pointed out is that the party-plaintiff in that suit and the present petitioner have colluded with each other. They have filed a suit to nullify the concluded action under the Securitisation Act. The true facts have been set out and of a sanction of term loan of ₹ 13,46,00,000/- which was secured by creating an equitable mortgage and by depositing the title deeds. These were deposit .....

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t. The proceedings reached finality and it was pointed out that the borrower company and the Director with mala fide intention to defraud and obstruct the recovery proceedings inducted third party in possession in the secured assets. The plaintiff in the civil suit was inducted prior to the institution of this Writ Petition. In any event, it was on the eve of the same. Pertinently, that third party (Pravin) had filed a suit civil court at at Vasai prior to the application for ad-interim relief i .....

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pplication in the said Securitisation Application was dismissed / rejected by the DRT-I on 23rd April, 2015. After the section 14 proceedings were completed and by an order of 11th June, 2014, then the Revenue officials acted in compliance therewith and issued the possession notice dated 10th April, 2015. In the circumstances, such an act on the part of the borrower and others defeats the legal rights of the bank and in terms of the Securitisation Act. Therefore, the Writ Petition be dismissed. .....

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handed over temporarily. Thirdly, if any genuine or bona fide borrower apprehended that his rights and remedies would be defeated, he would seek a limited protection from this Court and in order to enable him to avail of the alternate remedy. The reliefs that are sought from this Court were on the footing that a third party will be prejudicially affected in the event the possession is taken over and of the factory premises. If really the third party was in possession, all these facts could have .....

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d and assistance of such third party. Prima facie we find much substance in the contentions of Shri Walve that this petition is a gross abuse of the process of the Court and equally the order passed by this Court has been then utilised to thwart the remedies available to the bank. Further, this Court's process is used to obstruct and interfere with the powers of the statutory authorities under the Securitisation Act (SARFAESI). 9. We also find that in the Memo of this petition itself it has .....

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40,145/-. The argument is that this notice was never served on the petitioner and they had no occasion to reply to the same. It is in these circumstances that fault is found with the further notice under section 13(4) of the SARFAESI Act. In paragraph 6 at page 9 of the petition it is pointed out as to how Securitisation Appeal No.4 of 2012 has been filed in the DRT to challenge these notices and interim protection sought therein. That was also granted on 19th April, 2012 (the order of status qu .....

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ars of the Reserve Bank of India. We do not find that the petitioner is in any way remediless even if it is pursuing or defending proceedings in various forums. We are also mindful of the fact that if Original Application No.17 of 2011 has been filed by the State Bank of India and it has also taken recourse to the RDB Act, then, that Act itself clarifies as to how after the SARFAESI Act came into force that under section 19(1) (proviso) the Financial Institution or the bank may, with the permiss .....

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Equally it can request the DRT to dismiss the Original Application No.17 of 2011 on available legal grounds, including those set out in this Writ Petition. It is apparent that the petitioner is fully aware of this position and in law. The petitioner is also aware of the position that once the Securitisation Appeal has been preferred and is pending, then, a refusal of any interim protection or order or relief therein is appealable before the DRAT and that is how the petitioner has approached the .....

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e it that the property is in possession of the tenants / third party and not in possession of the petitioner-company. The bank pointed out that interlocutory applications have been filed in the Securitisation Appeal No.4 of 2012 and numbers of the same are set out at page 153 of the paper-book, for different reliefs by Unnikrishnan Nambiar alongwith his duly sworn affidavit contending that the Directors of the company are abusing the process of the Tribunal by filing different Securitisation App .....

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.V. Dhananjay and has nothing to do with the Securitisation Appeal filed by others before the DRT, Pune and the orders passed by DRT, Pune are not binding on the applicant-petitioner before us. 11. Thus, multiple proceedings for same relief were instituted at Pune and Mumbai before the DRTs. The Tribunal noted the undisputed facts that both the Securitisation Appeals are pending. They are pertaining to the same asset. The Pune Securitisation Appeal is filed by one Unnikrishnan Nambiar, Director .....

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self opens with this averment that the DRAT is on leave / not sitting from 22nd April, 2015 to 24th April, 2015 and there is no judicial forum available to the petitioner to secure equitable and statutory relief against the imminent dispossession from the property of the petitioner. 13. We are of the view that in this background and with the prima facie observations of the DRT, this petition is indeed a gross abuse of the process of this Court. The legal and constitutional questions need not be .....

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and purpose was to somehow or the other avoid handing over of possession of the secured asset. In order to achieve that, the petitioner firstly moved this Court and placed before the Court some facts pertaining to a third party being in possession. That third party then promptly files an application for interim relief in the pending suit in the court at Vasai against the Director of the petitioner and others. That Director had already filed an independent proceeding against the Securitisation no .....

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