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2016 (12) TMI 61 - GUJARAT HIGH COURT

2016 (12) TMI 61 - GUJARAT HIGH COURT - TMI - Proceedings under SERFAESI Act - prayer to set aside the notices - Held that:- It is quite clear that the District Magistrate, upon an application being filed by the respondent Bank under Section 14 of the SERFAESI Act, has only issued a notice/summons to the petitioners to remain present on 07th November, 2016 and answer the case. It is this notice which is challenged by the petitioners and it is at this stage that the petitioners have filed this pe .....

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the jurisdiction of the writ court at the stage and in the circumstances obtained. The self-convenient act of on part of the petitioners to file present petition seeking to invoke the writ powers of the Court are indeed not well conceived in law and partakes an abuse of process of law, warranting a strict view. - SPECIAL CIVIL APPLICATION NO. 19295 of 2016 - Dated:- 25-11-2016 - MR. N.V.ANJARIA, J. FOR THE PETITIONER : MR JAL SOLI UNWALLA WITH MS TEJAL A VASHI, ADVOCATE CAV JUDGMENT Heard learn .....

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n and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 2.1 The prayer is made to set aside the notices produced collectively at Annexure-A issued by the District Magistrate. What is further prayed is to quash the proceedings before the District Magistrate pending in the nature of Case No.17 of 2016 being proceedings under Section 14 of the SERFAESI Act. 3. A prelude of relevant facts may be necessary to have the total factual picture. Around the years 2004-05, t .....

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ies for securing the said financial facilities granted by the Bank to the petitioner. Further mortgage was made for the same purpose, of other properties by the second petitioner herein. 3.1 It is the further case that somewhere around 18th July, 2006 another partnership firm named M/s.Rainbow Industries-the sixth respondent herein was incorporated with petitioner Nos.2 and 3 as partners. The said Rainbow Industries also extended the credit facility for which petitioner Nos.2 to 5 mortgaged prop .....

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financial crunches were faced by it. Attempt was made to sell the property bearing Survey No.970/1 Paiki which was jointly owned by petitioner Nos.2 to 5 and mortgaged with the Bank as stated above. Agreement to Sell came to be executed on 24th December, 2012 in favour of one M/s.Yogamrut Developers who later on defaulted in the payment of installment of the sale price. As the dues of the Bank were seen in jeopardy, the sanction limit of the credit facility to the petitioner No.1 firm-M/s.Rainbo .....

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il Suit No.53 of 2014 in the Court of Principal Senior Civil Judge, Mehsana against the present petitioners as well as the respondent Bank. The Civil Court, Mehsana allowed Exhibit 5 application of injunction in favour of the plaintiffbuyer which is in force. The Suit is pending having been transferred to the Civil Court at Visnagar registered as Special Civil Suit No.91 of 2015. 3.5 As the dues of Bank was not paid by petitioner No.1, disputes between petitioner No.1 and the Bank arose and recu .....

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reference to the limit of ₹ 350.00 lakhs obtained by petitioner No.1, were mentioned to be ₹ 03,64,09,947/-. The notice was affixed on the same day on the property in question being revenue Survey No.978/1 and the petitioners were orally informed, by the Regional Manager of the Bank, the petitioners have averred. The petitioners have further stated that they visited the Bank and addressed letters and also addressed letter dated 15th March, 2016 through advocate. It is sought to be s .....

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es on 03rd June, 2016 through the authorised officer. The notices regarding possession was published in two newspapers on 08th June, 2016. 3.7.1 The Bank has filed before the Debt Recovery Tribunal Original Application No.261 of 2016 which was served on the petitioners on 13th June, 2016 and 14th June, 2016, along with order of injunction dated 02nd May, 2016 whereunder the petitioners are restrained from dealing with the property. 3.7.2 On 26th March, 2016, the petitioners themselves approached .....

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Following related developments may also be mentioned-(i) M/s.Yogamrut Developers filed Special Civil Application No.12431 of 2016 challenging the order passed by the Civil Court below Exhibit 57 in Special Civil Suit No.91 of 2015. This Court directed the petitioner to deposit ₹ 05.00 crores with the Bank; (ii) Petitioner preferred Letters Patent Appeal as it was ex-parte order; (iii) Letters Patent Appeal was withdrawn with liberty reserved to the appellantpetitioner to move learned Sing .....

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s initiated by the Bank. The petitioner complained that they were directed to remain present for hearing by issuing summons by the Magistrate. 5. The aforesaid conspectus of facts is highlighted only for the purpose as it vividly demonstrates as to how the petition is thoroughly misconceived and premature. The whole set of the contentions sought to be agitated by the petitioners herein involve going into facts. The petitioners have remedy at an appropriate later stage to file an appeal before th .....

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o has acted pursuance to the application of the Bank presented under Section 14 of the Act. No order is passed by the learned Magistrate. The petitioners are called upon to remain present and answer the case. 5.2 Even otherwise and even at later stage after final order which may be passed by the Magistrate in the proceedings complained against, the petitioners could approach the Debt Recovery Tribunal for agitating their grievances. In Union Bank of India Vs Satyavati Tondon [(2010) 8 SCC 110] t .....

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or recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constituti .....

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