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TMI Blog2022 (1) TMI 1464X X X X Extracts X X X X X X X X Extracts X X X X ..... e loan was secured by mortgaging a residential property owned by Opposite Party No.3. Due to lack of financial discipline, the loan account was declared as Non-Performing Asset (NPA) on 4th October, 2017. A demand Notice under Section 13(2) of the SARFAESI Act, 2002 was issued on 6th November, 2017 seeking to recall outstanding amount of Rs.2,85,04,685/- (Rupees two crore eighty-five lakh four thousand six hundred eighty-five only) due as on 6th of November, 2017. Symbolic possession of the mortgaged property was assumed vide Possession Notice dated 21st February, 2018 issued under Section 13 (4) of the SARFAESI Act. 3. The Petitioner-secured creditor filed an application under Section 14 of the SARFAESI Act before the District Magistrate (DM), Cuttack in April, 2018 seeking providing of official assistance for taking over actual physical possession of the secured asset-mortgaged residential property. Since the same was not decided within the stipulated time, the Petitioner approached this Court by filing a Writ Petition which was disposed of vide order dated 11th December, 2018 directing the District Magistrate (DM), Cuttack to dispose of the application within a period of six mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said affidavit contains all the stipulations as required for by virtue of amended Section 14, it is obligated to pass an order providing for assistance to secured creditor to obtain physical possession of the secured asset. He thus submits that the impugned order dated 09.03.2021 (Annexure P-1) may be set aside as Opposite Party No.1 has exceeded its jurisdiction by rejecting the application of the petitioner/secured creditor in spite of being complete in all respects. 9. On the other hand, learned Counsel for the Opposite Party Nos.2 and 3 submits that the present petition is not maintainable, as the petitioner has not availed the alternative statutory remedy by filing an application under Section 17 of the SARFAESI Act, 2002 before the DRT to lay challenge to the impugned order dated 09.03.2021 passed by Chief Judicial Magistrate (Opposite Party No.1). He further submits that the petitioner has not brought on record the reply dated 04.04.2018 submitted by the Opposite Party Nos.2 and 3 pursuant to which Rs.7,57,108/- was deposited with the petitioner creditor which disentitles it to maintain the present petition. Still further, the petitioner cannot be permitted to maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having heard both sides, we find the preliminary objection raised by the Opposite Party Nos.2 and 3 is liable to be rejected. Section 13(1) and Section 17 of the Act, 2002 reads as under :- 13. Enforcement of security interest. - (1) Notwithstanding anything contained in section 69 or section 69-A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or tribunal, by such creditor in accordance with the provisions of this Act. Xxx xxx xxx 17. [Application against measures to recover secured debts.] - (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter with in forty-five days from the date on which such measures had been taken: [Provided tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of section 13 to recover his secured debt. Xxxxx xxxxx [Emphasis supplied] A perusal of Section 13(1) of the Act, 2002 reflects the intention of the legislature to enable the creditor to enforce the charged securities without the intervention of the Court or tribunal. Further, the remedy under Section 17 of the Act, 2002 is only available to a person aggrieved of an action initiated by the secured creditor. Noticeably, remedy to the secured creditor to approach the Tribunal to lay challenge to an order passed by the Magistrate is conspicuous by its absence. The scheme of the Act, does not provide for a remedy to the secured creditor within the ambit and scope of Section 17 in absence of an impugned act of a secured creditor. In order to invoke the jurisdiction of the Tribunal and maintain an application before it, it is necessary that there ought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e grievance of the secured creditor is against the non-implementation of its rights under Section 14 of the Act, 2002." [Emphasis supplied] 15. Similarly, in yet another judgment a Division Bench of Punjab and Haryana High Court in Kotak Mahindra Bank V/s Raj Paul Oswal 2021 AIR (Punjab and Haryana) 118 held in Para 13 as under :- ".......A perusal of the above would show that any person which includes a borrower, who is aggrieved by any of the measures taken by the secured creditor or his authorized officer referred to in sub-section 4 of Section 13 of the SARFAESI Act under the Chapter, can make an application under Section 17 of the SARFAESI Act. The language itself makes in amply clear that the remedy is available to a person aggrieved by any of the measures referred in sub-section 4 of Section 13 of the SARFAESI Act, which are taken by the secured creditor or his authorized officer. The remedy, therefore, under Section 17 of the SARFAESI Act, would not be available to the secured creditor or his authorized officer for rejection of an application preferred by the said secured creditor or his authorized person under the SARFAESI Act. In the light of the above, the order wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hysical possession by the secured creditor. Per contra, learned Counsel for the Opposite Party Nos.2 and 3-Borrower contends that once the District Magistrate is available which is entrusted with administrative jurisdiction the secured creditor cannot maintain an application before the Chief Judicial Magistrate. Moreover, the legislature never contemplated to provide for an overlapping jurisdiction with two authorities and therefore an application would not be maintainable before the Chief Judicial Magistrate, in the presence of availability of District Magistrate. He further contends that the reason why Chief Metropolitan Magistrate finds mention in the provision is that it is only in those districts, where there is no District Magistrate, could the jurisdiction be treated to be vested with the Chief Judicial Magistrate and not otherwise. He therefore supports the impugned order and prays for dismissal of the present petition. 19. Having heard learned counsel for the respective parties, we find that this issue would not detain us any longer, in view of the authoritative pronouncement of the Hon'ble Supreme Court in the case of Authorised Officer, Indian Bank V/s D. Visalakshi an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to dilate on the argument of prospective overruling pressed into service by the secured creditors (Banks)." [Emphasis supplied] 20. As regards the contention of the learned Senior Counsel representing Opposite Party Nos.2 to 3 that the petitioner would not be entitled to avail two parallel remedies, this Court is of the opinion that the said issue would not arise in the present petition, as the petitioner has already withdrawn its application before the District Magistrate concerned on 23.12.2020 and it is only thereafter that it preferred a fresh application before the Chief Judicial Magistrate on 25.01.2021 which led to the passing of the impugned order dated 09.03.2021 (Annexure P-1). In view of the aforesaid fact, the aforesaid argument of the Opposite Party Nos.2 and 3 would not sustain for consideration. Further, Hon'ble Supreme Court in Authorised Officer, Indian Bank (supra) has held that jurisdiction under Section 14 can be exercised by either of the two authorities namely Chief Judicial Magistrate and District Magistrate. Therefore, both the authorities are equally competent to exercise the jurisdiction. 21. As regards the next contention advanced on behalf of Oppos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en reiterated by a Division Bench of Punjab and Haryana High Court in Asset Reconstruction Company (India) Ltd. v. State of Haryana 2018 (1) PLR 443 and a Division Bench of Madras High Court in M/s Shriram Housing Finance Ltd. v. District Collector 2019 (2) CWC 697. 26. Further, the enactment does not leave the aggrieved person remediless. In case if any person is aggrieved of any action taken by the creditor including of an order passed by the District Magistrate or Chief Judicial Magistrate the remedy lies with DRT in view of Section 17 (1) of the Act, 2002 [See Para 20 of Kaniyalal Lalchand Sachdev v. State of Maharashtra 2011 (12) SCC 782]. Section 34 of the Act, 2002, excludes the jurisdiction of any court or other authority from granting any injunction in respect of any action taken or to be taken by the secured creditor under the provisions of the Act. Thus, the DRT shall be competent to examine the validity of not only the steps taken by the secured creditor under Section 13(4) but also all subsequent and consequential actions taken by the secured creditor under the Act. 27. It is to be noticed that Section 14 of the Act, 2002 was amended with effect from 15.01.2013 and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sset in a civil suit or proceedings instituted by the borrower/guarantor/any third party qua the secured asset? (2) Whether the petitioner bank/secured creditor would be bound by an order passed by a Civil Court in a lis inter-se between parties pertaining to the secured asset, not having impleaded the Bank/Secured Creditor ? (3) Scope of powers of the District Magistrate in exercise of its jurisdiction under Section 14 of the Securitization Act, 2002 ?" Xxx xxx xxx ISSUE NO.3 25-30 xxx xxx xxx 31........Even though the time provided under Section 14 to the District Magistrate to pass an order is directory, it is sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again aims at timely enforcement and recovery. Applying the said principle of casus omissus to the instant case, we find that the provision requires the necessity of making the process of execution also time bound. More so, when it is within the four corners of the statute and consistent with the object of the Act, 2002 as well. It is ironical to note that even though times lines are provided for District Magistrate to pass an order, but for implementing officers, the proviso to Section 14 does not lay down any stipulated time for enforcing the order of the District Magistrate. This at times defeats the very object of the provision and also runs counter to the scheme of the Act, 2002. It is in these circumstances, that we feel the need of applying the principle of casus omissus, to fill in the gap of not having provided the time limits for implementation of the order, on the same lines like the District Magistrate is obliged to do so. It is only then, that the legislative intent of Section 14 becomes complete. Consequently, we hold that after the order is passed by the District Magistrate, the officer so deputed to execute the said order under Section 14(1A) of the Act, 2002 would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh, there is no provision for an advance notice to be given to the occupant/owner of the property before taking physical possession, but it would be desirable, that an advance notice of at least 15 days be served on the occupant before taking physical possession by the officer so deputed by the District Magistrate, so that persons to be dispossessed are not caught unawares." 29. Since the aforesaid judgment deals with the identical issue as seized by us in the present petition in great detail, we deem it appropriate to reiterate all of the aforesaid conclusions and directions in the present order as well and hereby direct all the District Magistrates and Chief Judicial Magistrates in the State of Odhisa to act strictly within the scope and ambit of the aforesaid directions as contained in para 33 of the judgment in the case of Allahabad Bank case (supra), while exercising jurisdiction under Section 14 of the Act, 2002. ISSUE NO.4 30. Having considered the legal issues involved in the present petition and as delineated hereinabove, we now proceed to consider the relief to which the petitioner would be entitled to. Vide impugned order dated 09.03.2021 (Annexure P-1), the Chief Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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