TMI Blog2016 (5) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... arly brings out, in paragraph 3, that she has identified the scheduled property and executed the warrant and further went on to assert that the petitioner, his servants, his wife and several others stated that the house bearing D.No. 1-5-230 situated in Survey No. 51/EE of Alwal Village, Malkajgiri Mandal, Ranga Reddy District belongs to the petitioner herein. We have to go by her statement of fact that the said house bearing D.No. 1-5-230 is, in fact, lying in Survey No. 51/EE, but not in Survey No. 51/AA. This apart, the learned Advocate- Commissioner has also recorded, in paragraph 3 of her affidavit, that the petitioner never filed any work order (memo) before her requiring her to execute the warrant by any method specified in the work memo. In the absence of any such material to the contra, the conduct of the Advocate-Commissioner in taking possession of the building bearing D.No. 1-5-230 cannot be objected to or found fault with. Even otherwise, there is no credible material that was placed on record of this Court to show that the house bearing D.No. 1-5- 230 is actually lying in Survey No. 51/AA, but is not lying in Survey No. 51/EE of Alwal Village. The fact that the hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trict and also to order for stay of all further proceedings initiated by Respondents 1 and 2 under the provisions of the aforementioned Act. The 4th respondent is stated to be a public limited company carrying on business in software tracking including development of required embedded software and mobile shopping software and that it has availed certain financial assistance from the Industrial Development Bank of India, whose Deputy General Manager is impleaded as the 2nd respondent herein. The financial benefits availed comprised of two components; 1) a term loan limited to ₹ 4 crores; and 2) a cash credit loan limited to ₹ 3.70 crores in the year 2009. The writ petitioner, in paragraph 6 of the affidavit filed in support of this Writ Petition, would describe himself as a nominal participant in the business of the said company and since the bank has insisted, the petitioner has created an equitable mortgage and secured the loan advanced to the 4th respondent company. It is his specific case that he is an innocent 3rd party and that he has been induced by the 4th respondent into creating the security for the loan availed by it. It is not in dispute that a mortgage ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 2(ha) to carry the same meaning assigned to it in clause (g) of Section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. In that enactment, the said expression has been defined as under: debt means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application. From the above definition, there is hardly any doubt that there exists a debt between the bank and the principal borrower, the 4th respondent company. The expression default has been defined in Section 2(j) as meaning non-payment of any principal debt or interest thereon or any other amount payable by a borrower to any secured creditor consequent upon whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urity interest created in favour of any secured creditor may be enforced, without the intervention of court or tribunal, by such creditor in accordance with the provisions of this Act. Thus, the SARFAESI Act is a special piece of legislation made by the Parliament for achieving a special objective of securing the enforcement of the security interest of the secured creditor. That is the reason why a special provision is created in sub-section (1) of Section 13 of the SARFAESI Act by making it clear that the security interest created in favour of any secured creditor can be got enforced without the intervention of the Court. The intention of the Parliament is so very clear that it wanted to address the malady of the defaults committed by the borrowers in repayment of the debt due by them, resulting in getting into the very vitals of the secured creditors and more particularly financial institutions including those in the banking sector. Under sub-section (2), the secured creditor, by delivering a notice, in writing, to any borrower whose liability remained unpaid, can call upon him to discharge in full such liabilities within 60 days. Even after receipt of such a notice delivered und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2015 and appointed the 3rd respondent Advocate as Commissioner and entrusted the said Commissioner with the task of executing the warrant for taking possession of the scheduled property. The schedule of property, which is drawn by the learned Chief Metropolitan Magistrate and entrusted for the purpose of taking possession of the property, is described as under: Schedule of Property All that piece and parcel of land admeasuring acres 1.03 guntas in Sy.No. 51/EE situated at Alwal Village, Malkajgiri Mandal, Ranga Reddy District and bounded by: North : Neighbors Land South : Road East : Neighbors Land West : Neighbors Land This schedule is exactly tallying with that contained in Annexure-I to the mortgage created by the petitioner on 18.02.2009 in favour of the bank excepting to the following extent: together with all structures thereon and all the things attached to the earth or permanently fastened to anything attached to the earth The Chief Metropolitan Magistrate, in our considered opinion, has not committed any error in exercise of power and jurisdiction in rendering the necessary assistance under sub-section (1) of Section 14 to the secured c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us has been instituted. Heard Sri K. Gopal Krishna Murthy, learned counsel for the petitioner and Sri Mujeeb, learned counsel representing the 3rd respondent Advocate-Commissioner. None appears for the respondent bank. Sri Gopal Krishna Murthy, learned counsel for the petitioner would principally contend that the provisions of the SARFAESI Act could not have been invoked by the respondent bank, at the first instance, inasmuch as the secured asset is an agricultural land and hence, it is exempted from being proceeded against. Therefore, there was a fundamental error of jurisdiction committed in invoking Section 14 of the Act and consequently, the exercise of jurisdiction by the learned Chief Metropolitan Magistrate also lacks the necessary authority and sanction of law. In support of this contention, the learned counsel has drawn our pointed attention to Section 31 of the SARFAESI Act, which clearly spelt out that the provisions of the Act shall not apply to, amongst others, any security interest created in agricultural land. Therefore, the first and the foremost question, which we are now called upon to decide, is whether the security interest created in the instant case is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pattadar Passbooks Act, 1971, it emerges that the expression land which is defined in sub-section (4) of Section 2 of that enactment, brings out that land means land which is used or is capable of being used for the purpose of agriculture, including horticulture, but does not include land used exclusively for non-agricultural purposes . Thus, if the land is also capable of being used for agricultural purposes, but not necessarily being used for agricultural purposes as such, it also answers the description of the expression land found mentioned in the said Act. Therefore, the record is prepared under Section 3 of the said enactment of every land, which is merely capable of being used for agricultural or horticulture purposes, but not necessarily being used as it is for the said purpose. Therefore, we have no difficulty to reject the contention of the learned counsel for the petitioner that since revenue record maintained under the aforementioned 1971 Act has been produced by him, it has to be invariably inferred that the security interest created by the petitioner in favour of the bank is relating to agricultural land and hence, the provisions contained under Section 31 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise, there is no credible material that was placed on record of this Court to show that the house bearing D.No. 1-5- 230 is actually lying in Survey No. 51/AA, but is not lying in Survey No. 51/EE of Alwal Village. The fact that the house property has been assessed to property tax by the local municipality/corporation, does not necessarily reflect that the said house property is lying in Survey No. 51/AA, but not in Survey No. 51/EE. As was already noticed supra, the revenue record filed by the petitioner itself has brought out that he has land of an extent of Ac.1.03 guntas lying in Survey No. 51/EE and land of an extent of Ac.0.15 guntas lying in Survey No. 51/AA. In which parcel of these two extents of land did the petitioner construct the house bearing D.No. 1-5-230 is a matter left for guessing by us. In the absence of any credible material, we will not be justified in returning a finding of fact that house bearing D.No. 1-5-230 was, in fact, lying in Survey No. 51/AA, but not in Survey No. 51/EE. Even otherwise, that being a controversy of fact, which can only be determined upon collection of evidence, both oral and documentary, in exercise of jurisdiction under Article 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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