TMI Blog2020 (3) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... put forth is taken note and if the same is allowed to be agitated through a complaint filed at this point in time and if the investigation is allowed to continue it would amount to permitting the jurisdictional police to redo the process which would be in the nature of reviewing the order passed by the learned Single Judge and the Division Bench in the writ proceedings by the High Court and the orders passed by the competent Court under the SARFAESI Act which is neither desirable nor permissible and the banking system cannot be allowed to be held to ransom by such intimidation. Therefore, the present case is a fit case wherein the extraordinary power is necessary to be invoked and exercised. Appeal allowed - decided in favor of appellant. - Criminal Appeal No. 377 of 2020 ( Arising out of SLP ( Criminal ) No. 5701 of 2019 ) - - - Dated:- 3-3-2020 - JUSTICE R. BANUMATHI, JUSTICE S. ABDUL NAZEER And JUSTICE A.S. BOPANNA For the Petitioner : Mr. Brijesh Kumar Tamber, AOR For the Respondent : Mr. Chandrashekhar A. Chakalabbi, Adv. Mr. Awanish Kumar, Adv. Mr. S.K. Pandey, Adv. Mr. Anshul Rai, Adv. For M/S. Dharmaprabhas Law Associates, AORMr. Shubhranshu Padhi, Adv. Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auction as 15.11.2013. The reserve price of the secured asset was fixed at ₹ 2,28,51,000/. Though publication was made, no bids were received in the auction proposed on Page 3 of 27 15.11.2013 and since the same was a public holiday declared in the State of Karnataka the auction was postponed to 04.12.2013. Even on the said date no bids were received. 4. Accordingly, the Canara Bank had revised the valuation, indicating the reserve price as ₹ 1.10 Crore since the earlier reserve price at a higher rate had not attracted purchasers and issued the fresh auction notice dated 30.12.2013. The Complainant claiming to be aggrieved by such action, assailed the auction notice in a Writ Petition filed before the High Court of Karnataka, Dharwad Bench in Writ Petition No. 100382/2014. The learned Single Judge having considered the matter, apart from taking note of the contentions put forth by the Complainant had also taken into consideration the alternate remedy available to the Complainant under the SARFAESI Act and accordingly dismissed the writ petition with cost of ₹ 10,000/, on 22.01.2014. The Complainant assailed the said order by filing a Writ Appeal before the Div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat circumstance the entire action taken, upto the stage of the sale of the property is as regulated under the provisions of the SARFAESI Act which provides not only for the procedure but also for redressal of the grievance of the parties concerned. In that circumstance even if the grievance as sought to be made out by the Complainant are taken note, the same cannot form the basis for maintaining the criminal complaint and in such event the learned Magistrate without application of mind has directed investigation under Section 156(3) of Cr.P.C. which has led to the registration of the FIR. It is contended that in respect of the action taken by the Canara Bank, the complainant in fact has availed the remedy of filing the Writ Petition, Writ Appeal and thereafter the proceedings before the DRT as also DRAT and having failed therein has set criminal law into motion which is not bonafide and not sustainable in law. It is contended that the learned Judge of the High Court of Karnataka has not appreciated the matter in its correct perspective. Instead, the learned Judge has arrived at the conclusion that the investigation would not prejudice the appellants, which is not justified. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al (1992) Supp (1) SCC 335 placed for consideration by the learned senior counsel for the Complainant which lays down the parameters that are to be kept in view while exercising the extraordinary power/inherent power to quash the criminal proceeding. On stating the parameters, this Court has cautioned that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in rare cases. In that background, keeping in view the nature of transaction and the manner in which the earlier proceedings were resorted to on the same subject matter, the present situation is required to be considered. 10. As noted, the undisputed fact is that the Complainant had approached the Canara Bank for financial assistance, wherein the appellants herein were the Officers in the Circle Office. The Complainant had availed the loan facility to the tune of ₹ 2.68 Crores on 16.03.2009. Though the Complainant contends that the entire amount of ₹ 2.68 Crores was not released, but only a sum of ₹ 90 lakh was released and the remaining amount was adjusted as repayment, the question would be as to whether that aspect and the other aspects as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted by respondent-Bank for recovery of its legitimate dues, this Court would not interfere with said auction in the normal course. In the instant case, reserve price earlier fixed at ₹ 228.51 lakhs has not fetched customers and as such, respondentBank has fixed the reserve price at ₹ 110 lakhs which would be the price with which the public auction starts and auction bidders are not permitted to give bids below the floor value or reserve price. If the petitioner is able to secure a customer or a bidder who can offer his bid for the value as proposed by the petitioner itself, it would be needless to state that secured creditor would definitely accept the said bid since earlier attempts by it to auction the property has been in vain. In the instant case, as already noticed hereinabove, petitioner is a borrower and it had defaulted in payment of monies due to the Bank. In other words, public money due by petitioner to the Bank has not been repaid. Petitioner loan account having been classified as a nonperforming asset , respondent-Bank has initiated proceedings under the SARFAESI Act to recover the dues. In the earlier auctions conducted, reserve pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the auction itself through the prayer made in the Writ Petition. The Complainant had assailed the said order in an intracourt appeal bearing W.A. No.100349/2014. The Division Bench by its order dated 19.08.2014 had taken note of the consideration made by the learned Single Judge with reference to the case of Satyawati Tondon Ors. (Supra) and had accordingly dismissed the Writ Appeal. 13. Having taken note of the nature of consideration made by the High Court in the said writ proceedings and keeping in view the proceedings on hand, in order to come to a conclusion as to whether in a matter of the present nature the appellants should be exposed to the ignominy of going through the process of criminal proceedings, it is also appropriate to take note of the provisions as contained in the SARFAESI Act. The fact that the issue relates to the exercise of remedy relating to a secured asset as defined under the Act cannot be in dispute. The fact that the account of the Complainant was classified as NPA is also the admitted position. In that regard when a right accrues to the secured creditor to enforce the security interest, the procedure as contemplated under Sections 13 and 14 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 90 Lakhs out of the sanctioned amount of ₹ 2.68 Crores and by later not releasing the remaining amount had caused economic stumbling block and sold the property mortgaged to one of the accused. 15. The issue however is, as to whether such proceedings by the police in the present facts and circumstances could be permitted. At the outset the sanction of loan, creation of mortgage and the manner in which the sanctioned loan was to be released are all contractual matters between the parties. The Complainant is an industrialist who had obtained the loan in the name of his company and the loan account was maintained by the Canara Bank in that regard. The loan admittedly was sanctioned on 16.03.2009. When at that stage the amount was released and if any amount was withheld, the Complainant was required to take appropriate action at that point in time and avail his remedy. On the other hand, the Complainant had proceeded with the transaction, maintained the loan account until the account was classified as NPA on 15.01.2013. Initially the issue raised was only with regard to the under valuation of the property when it was brought to sale. On that aspect, as taken note the wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee. 37. The consequences of the authority vested in the DRT under subsection (3) of Section 17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue of Section 13(4) of the Act. The legislature by including subsection (3) in Section 17 has gone to the extent of vesting the DRT with authority to even set aside a transaction including sale and to restore possession to the borrower in appropriate cases. Resultantly, the submissions advanced by Mr Gopalan and Mr Altaf Ahmed that the DRT has no jurisdiction to deal with a postSection 13(4) situation, cannot be accepted. (emphasis supplied) 17. We reiterate, the action taken by the Banks under the SARFAESI Act is neither unquestionable nor treated as sacrosanct under all circumstances but if there is discrepancy in the manner the Bank has proceeded it will always be open to assail it in the forum provided. Though in the instant case the application filed by the Complainant before the DRT has been dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
