TMI Blog2018 (1) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... for the same, pass the order within such also period but not exceeding in aggregate 60 days - As per Section 14 of the Act, duty is cast on the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, to assist the secured creditor in taking possession of the secured asset. Under the scheme of Act, District Collector cum District Magistrate or the Chief Metropolitan Magistrate, as the case may be, is empowered to pass orders, after considering the parameters, set out in the said section. Statutory authority cannot be restrained from discharging his duties and functions by issuance of a writ of prohibition. In the case on hand, statute empowers the District Magistrate cum District Collector, to pass orders on the application filed under Section 14 of the SARFAESI Act, 2002. He cannot be said to have acted without jurisdiction. Action of the District Magistrate cum District Collector cannot be said to be in excess of jurisdiction. Adhering to the principles of natural justice, the District Magistrate Cum District Collector, has issued notice to the petitioner and others. There is no violation to fundamental right. Request of the petitioner to issue a writ o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another security provider / grand mother of Mr.S.Ajith Kumar. Primary and collateral securities offered for availing the abovesaid loans, are as hereunder. Securities As mentioned below: a. PRIMARY SECURITIES Nature of security Description Margin proposed Value of Security PCL Exclusive First charge by way of hypothecation in favour of Vijaya Bank of entire chargeable current assets. Stock of inventories such as food grains, coconuts etc. against irrevocable export letters of credit opened by prime Banks or confirmed export orders from overseas buyers, backed by ECIB- WTPC cover of ECGCI Limited Stock 3.5% Stocks are valued ₹ 127.50 lakhs FY 14 FDBP/FUDBP Documentary export bills drawn on D/P D/A basis backed by document of title to goods, shipment documents, bill of lading etc., accompanied by original invoices and other documents evidencing export of agri commodities (rice coconuts) manufactured by the firm backed by ECIB-WTPS cover 0% (5% of the each bill amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 14 of the SARFAESI Act, 2002 before the District Collector cum District Magistrate, Coimbatore. Bank has also issued notice dated 07.03.2017, to bring the property for auction. Statutory 15 days sale notice for bringing the immovable property for auction, has also been issued to Mr.S.Ajith Kumar, Mrs.K.P.Punithavathi and Mrs.K.N.Meenakshikutty, the writ petitioner herein, with copies marked to M/s.Dynagro Trading Inc., Coimbatore and Mr.Sandeep Nagarajan, Parnter. 8. Contending inter alia that no orders under Section 14 of the SARFAESI Act, 2002, has been passed by the District Collector cum District Magistrate, Coimbatore, Vijaya Bank, Coimbatore has filed W.P.No.11617 of 2017, for a mandamus directing the District Collector-cum-District Magistrate, Coimbatore, to pass orders on the application dated 29.06.2016. District Collector-cum-District Magistrate, Coimbatore, was the sole respondent in the said writ petition. After hearing the learned counsel for Vijaya Bank and the learned Additional Government Pleader on behalf of the District Collector-cum-District Magistrate, Coimbatore, a Hon'ble Division Bench of this Court, vide order dated 04.05.2017 in W.P.No.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the case on hand, the writ petitioner entitled only to enjoy the property till life her time and thereafter, the beneficiaries, after the demise of the writ petitioner. According to him, in the absence of any transfer of property, the same would not fall under the definition of security asset for the loan availed and that therefore, bank cannot proceed under the provisions of the SARFAESI Act, 2002 and consequently, the District Collector-cum-District Magistrate, Coimbatore, has no jurisdiction to pass orders under Section 14 of the said Act. 14. Inviting the attention of this Court to the memorandum of deposit of titles dated 14.11.2013, learned counsel for the petitioner further submitted that the bank was aware of the limitations of the documents produced viz., Will and Sale deed, by which K.N.Meenakshikuttty/writ petitioner, can only enjoy the property till her life time, but the bank had pursued action under the provisions of the SARFAESI Act, 2002, instead of filing a suit for recovery. 15. Mr.Edwin Prabakar, learned counsel for the petitioner further submitted that in so far as the action of the bank, in issuing possession and sale notices, is concerned, the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w and / or at any time hereinafter owning to Vijaya Bank by M/s.Dynagro Trading Inc. having its registered office at Door No.121, Zion Complex, Avinashi Road, Hope College, Peelamedu Post, Coimbatore 641 004 whether singly or jointly with other person/s as principal borrower/s, gurantor/s or in any other capacity whatsoever to the extent of ₹ 3,50,00,000/- (Rupees Three crore and fifty lakhs only) by way of PCL / FDBP / FUDBP and interest, commissions and Banking and other incidental charges and costs incurred in connection with the realization. SCHEDULE A 11 LIST OF DOCUMENTS DEPOSITED Sl. No. Document No. Date Name of office of Registrar where registered Description of Documents Name of the Executants Executed by whom and in whose favour or issued by which office Name of beneficiary in whose favour the document is executed Original /certified copy 1 147/Bk3/1986 30.04.1986 Joint-1, Coimbatore WILL K.P. Ramakrish na Pillai K.N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DESCRIPTION OF PROPERTY Document No. Date Survey No./Khata No./House No./Site No. Extent / Areas of land Location / Sub District / Dist. Village / Municipality Boundary 147/Bk3/1986 30.04.1986 Door Nos.112 and 113 in Site Nos.14, 15, 16 17 situated in Appusamy Naidu layout in T.S.Nos.10/1669, 1670/2, New Ward No.3, Old Ward No. 10, Red Fields, Puliakulam, Coimbatore, Assessment No. 95449 95450 5737.5 sq.ft with buildings thereon Coimbatore Registration District, Coimbatore Taluk within the limits of Coimbatore City Municipal Corporation Boundaries:- North of - Land of A. Appusamy Naidu. South of Centre, East of - Vacant Space of James Pillai West of - House and Land of Nagabooshanam Ammal Measurements: - East -west on the northern side ... 45 feet East-west on the Southern side - 40 feet North-south on the both sides - 13.5 feet With right of way and all other appurtenances, etc., Door No. 6/76, New Door No.6/112 and 6/113, Appusamy Naidu layout. In witness whereof, the Execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2(zf), 'security interest' means, right, title and interest of any whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in Section 31 upon property created in favour of any secured creditor and includes -- ( i) any mortgage, charge, hypothecation, assignment or any right, title, or interest or any kind, on tangible asset, retained by the secured creditor as an owner of the property, given on hire or 15 financial lease or conditional sale or under any other contract which secures the obligation to pay any unpaid portion of the purchase price of the asset or any obligation incurred or credit provided to enable the borrower to acquire the tangible asset; or ( ii) such right, title or interest in any intangible asset or assignment or licence of such intangible asset which secures the obligation to pay any unpaid portion of the purchase price of the intangible asset or the obligation incurred or any credit provided to enable the borrower to acquire the intangible asset or licence of intangible asset. 25. In the light of the definitions, extracted supra, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or limited jurisdiction within their bounds. It is well-settled that the writ of prohibition lies not only for excess of jurisdiction or for absence of jurisdiction but the writ also lies in a case of departure from the rules of natural justice (See Halsbury's Laws of England, 3rd Edn., Vol. II, p. 114). It was held for instance by the Court of Appeal in The King v. North ([1927] 1 K.B. 411) that as the order of the judge of the consistory court of July 24, 1925 was made without giving the vicar an opportunity of being: heard in his defence, the order was made in violation of the principles of natural justice and was therefore an order made without jurisdiction and the writ of prohibition ought to issue. But the writ does not lie to correct the course, practice or procedure of an inferior tribunal, or a wrong decision on the merits of the proceedings. It is also well-established that a writ of prohibition cannot be issued to a court or an inferior tribunal for an error of law unless the error makes it go outside its jurisdiction (See Regina v. Comptroller-General of Patents and Designs,(1953-2 WLR 760 at p.675) and Parisienne Basket Shoes Proprietary Ltd. v. Whyte (59 CLR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in character. So, the question remains as to when it can be issued. Writ of Prohibition can be issued when there is a defect of the jurisdiction apparent on the face of the proceedings and it can be issued if the authority exceeded the jurisdiction or assumed jurisdiction when there is no jurisdiction. ( vii) In Standard Chartered Bank v. Directorate of Enforcement reported in 2006 (4) SCC 278, the Hon'ble Supreme Court, at Paragraph 25, held as follows: 25. The prayer for the issue of a writ of prohibition restraining the authorities under the Act from proceeding with the adjudication and the prosecution is essentially based on the constitutional challenge to the relevant provisions of the Act on the ground that they violate Articles 14 and 21 of the Constitution of India. Once we have held, as the High Court did, that the provisions are constitutional, the basis on which the writ of prohibition is sought for by the appellants disappears. It is settled by the decisions of this Court that a writ of prohibition will issue to prevent a Tribunal or Authority from proceeding further when the Authority proceeds to act without or in excess of jurisdiction; proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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