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SONALI SUNIL BHANUSHALI Versus AUTHORIZED OFFICER HDFC BANK AND 4

Commercial disputes - eligibility to order under Section 14 of SERFAESI ACT whereby the respondent-Bank was given the police assistance for the purpose of taking possession of the mortgaged property, came to be passed by the District Magistrate at the instance of Bank, by by-passing his rights and without affording him the necessary opportunity - Held that:- In relation to commercial disputes and matters, the remedy before the alternative forum specially created under the special statute has to .....

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unal which may be resorted to by the petitioner, if advised. - SPECIAL CIVIL APPLICATION NO. 1843 of 2016, CIVIL APPLICATION NO. 2578 of 2016 - Dated:- 11-4-2016 - MR. N.V.ANJARIA, J. FOR THE PETITIONER : MR AM PAREKH, ADVOCATE FOR THE RESPONDENT : MR SUDHIR NANAVATI, SR. ADVOCATE WITH MR BHAVESH CHOKSI FOR MRS VD NANAVATI, ADVOCATE COMMON CAV JUDGMENT The captioned petition was filed on 29th January, 2016. On 05th February, 2016 this Court issued Notice and granted ex-parte ad-interim relief. T .....

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g the petition for final consideration of the controversy and the following order was passed on 07th April, 2016. Heard learned advocate Mr. A. M. Parekh for the petitioner and learned senior counsel Mr. Sudhir Nanavati assisted by learned advocate Mr. Bhavesh Choksi in extenso. 2. Both the learned advocates consented and requested the Court to take up the main petition for final consideration. Therefore, keeping Civil Application pending, main petition was taken up and learned advocates for the .....

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en the police assistance for the purpose of taking possession of the mortgaged property being Flat No.203, 2nd Floor, Tower 2, Devnandan Infinity, Survey No.266/2+3+4, Final Plot No.281, T.P. No.21 at Motera, Taluka Sabarmati, Ahmedabad. 3.1 The authorized officer of the respondent- HDFC Bank had applied before the District Magistrate, seeking to take possession of the property in the process of the actions taken under the SERFAESI Act. The petitioner questioned the legality of the order of the .....

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d by the Bank and culminating into impugned order may be outlined. (i) On 29th November, 2011 an agreement to sell was executed between the original owner-developer and Mrs.Manjeet Kaur and Mr.Sandeep Harjit Singh followed by execution of sale deed dated 28th June, 2012. (ii) On 20th November, 2011 said Mrs.Manjeet Kaur and Mr.Sandeep Harjit Singh entered into a loan agreement with the Bank for subject premises. On 07th July, 2012 they were put in possession by the original developer. (iii) On 1 .....

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udasama and Geetaba Vanrajsinh Chudasama executed an agreement to sell in favour of the petitioner-Sonali Sunil Bhanushali on 26th July, 2014 in capacity as power of attorney holder of abovenamed original owners. On 03rd July, 2014 the petitioner-intending purchaser gave a public notice in daily newspaper inviting objections. (vi) On 27th August, 2014 the Bank issued notice under Section 13(2) of the SERFAESI Act. (vii) On 30th August, 2014 the petitioner instituted a Suit for specific performan .....

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ssary steps as per the SERFAESI Act. 4. Learned advocate Mr.A.M. Parekh for the petitioner tried to raise various contentions. He submitted that procedure for taking possession was not followed. In any view when the petitioner was not heard by the Magistrate, such opportunity ought to have been given to her. It was also insisted that the Bank did not comply with the requirement of making certain factual averments in its application under Section 14 of the Act. Learned advocate for the petitioner .....

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ns, it was submitted by him inter alia that the conditions precedent for exercise of powers and the modalities for exercise of powers were required to be satisfied, and that such essentials were not observed. All these submissions are not needed to be gone into and have not been gone into by this Court, leaving it open for the petitioner to raise all those contentions before the alternative forum if petitioner opts to avail such remedy, to be considered by the said forum strictly in accordance w .....

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e Bank, however since the petitioner is not ready to pay the total dues of the Bank, Bank cannot accept the proposal to its financial detriment. He pointed out that the dues claimed by the Bank as on 30th April, 2016 is figures at ₹ 48,31,209/- comprised of (i) outstanding loan amount being ₹ 33,69,517/-; (ii) overdue EMIs of ₹ 08,80,558/-; (iii) additional interest amount being ₹ 01,52,593/- and (iv) incidental charges being ₹ 04,28,541/-. It was submitted that in .....

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it cold be submitted that notice of the proceedings under Section 14 before the District Magistrate having been affixed on the property, the petitioner who is in possession, cannot disclaim the knowledge thereof and therefore also the knowledge of proceedings before the District Magistrate. It was submitted that despite that the petitioner did not appear, thereafter petitioner cannot subsequently complain about notice not given and/or opportunity not afforded. 5.1 The original owners executed po .....

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on reading of the facts, thus the submission of learned senior counsel that the petitioner was within the know of the unpaid dues of the Bank could not be brushed aside lightly, there was yet another aspect staring on the face of merits, the petitioner has instituted Special Civil Suit No.592 of 2014 for specific performance against the original owners Manjeet Kaur and Sandeep Harjit Singh as well as against abovenamed Jyotsnaba Gograjsinh and Geetaba Vanrajsinh Chudasama in respect of the prope .....

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the District Magistrate under Section 14 of the SERFAESI Act. The said fact was not noticed by the Court at the time of issuance of Notice and having been brought to notice in course of the hearing, there is no reason that this aspect weigh entirely against the petitioner. 6. Apart from the above, there is no gainsaying that the petitioner has got an alternative statutory remedy of filing an Appeal under Section 17 of the SERFAESI Act before the Debts Recovery Tribunal. The impugned order under .....

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13(4) stage. In the present case, the stage at which the petitioner is beset with, is such stage. The petitioner is aggrieved person for the purpose of Section 17 of the Act. In Kanaiyalal Lalchand Sachdev Vs State of Maharashtra [(2011) 2 SCC 782], the Supreme Court has stated that the measures under Section 14 constitutes the action taken after the stage of Section 13(4) and a remedy of appeal under Section 17 would be available. In that case, refusal by the High Court to entertain the writ p .....

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ieved and who has the cause to assert his rights in respect of action on part of the Bank or Financial Institution under the Act, is entitled to prefer Appeal and invoke jurisdiction of Debts Recovery Tribunal. 6.3 In Union of India Vs Satyawati Tondon [AIR 2010 SC 3413], the Apex Court observed to held as under. There is another reason why the impugned order should be set aside. If respondent No.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Sec .....

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he matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a 19 petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types .....

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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 Constitution, a person must exhaust the remedies available under the relevant statute. (Para 17) 6.4 In relation to commercial disputes and matters, the remedy before the alternative forum specially created under the special statute has to be necessarily resorted to before a party can be permitted to invoke the extra-ordinary jurisdiction and writ p .....

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of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for rec .....

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