*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 1st July, 2014
+ LPA No.395/2014
M/S PLANET COLORS ECO TOWNSHIPS LTD. ..... Appellant
Through: Mr. Muneesh Malhotra with Mr.
Achin Mittal, Advs.
Versus
STATE BANK OF INDIA & ORS. ..... Respondents
Through: None.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J.
1. This intra-court appeal impugns the order dated 19.03.2014 of the learned Single Judge of this Court of dismissal of W.P.(C) No.1796/2014 filed by the appellant.
2. The said writ petition was filed seeking, (i) appointment of a three member committee to supervise and overview the process of development of the property, of the appellant at Bhiwadi, mortgaged with the consortium of the three respondent banks viz. State Bank of India (SBI), Punjab National Bank (PNB) & State Bank of Travancore (SBT), with one nominee of the Court, one nominee of the respondent banks and one nominee of the appellant; and, (ii) for LPA No.395/2014 Page 1 of 6 deposit of the proceeds of the commercial space to be developed on the said property in escrow account, after deducting the expenses of development, to be distributed after the liability of the appellant to the respondent banks has been determined; and, (iii) for a direction to the respondent banks to issue NOC to the prospective buyers of the commercial space.
3. The learned Single Judge dismissed the writ petition holding that the appellant had the remedy of appeal to the Debt Recovery Tribunal (DRT) against the order if any of the respondent banks under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) against the appellant. The appellant applied for modification of the said order and vide order dated 04.04.2014, it was clarified that if the respondents approach the Chief Metropolitan Magistrate (CMM) under Section 14 of the SARFAESI Act, then no coercive steps for taking over possession of the secured assets of the appellant shall be taken for a period of two weeks therefrom.
4. The counsel for the appellant before us has argued that the relief claimed by the appellant is not available to the appellant by way of appeal to the DRT under the SARFAESI Act. It is argued that the respondent banks, if succeed in LPA No.395/2014 Page 2 of 6 taking over possession of the property of the appellant at Bhiwadi and in disposing of the same as it is, the same will not fetch enough to meet the demand of the respondent banks and which will result in the respondent banks invoking the personal guarantees. It is argued that the property, if developed as has been proposed by the appellant and which is possible and for which preliminary steps have already been taken by the appellant, can fetch enough to repay the entire demand of the respondent banks and may leave some surplus for the appellant. It is yet further contended that unless the same is done, the appellant will suffer injury inasmuch as the Directors of the appellant who have given their personal guarantees would face action against their personal properties as well.
5. We have enquired from the counsel for the appellant that if the property is capable of such development and of so reaping profits, in excess of the claims of the respondent Banks against the appellant, why does the appellant not tie up with some other developers and from the consideration received from such other developers repay the dues of the respondent banks or place a proposal before the respondent banks for the same.
6. No answer is forthcoming.
LPA No.395/2014 Page 3 of 6
7. We have yet further enquired from the counsel for the appellant that if the property, on development is capable of yielding so much more, the price for sale thereof as it is should also be proportionate.
8. Again no explanation is being offered.
9. The process of development of property entails not only obtaining the various sanctions therefor but the process of construction, booking of the proposed developed space, entering into agreements with the prospective buyers, marketing etc. Such works have been held to be not specifically enforceable as they cannot be supervised by the Court and as they entail doing of miniscule things spread out over a long period of time. Even if there were to be any merit in the contention of the appellant, we cannot ask the respondent banks who do not have any experience of such development to, for the sake of the appellant, undertake the said exercise and outcome whereof is very uncertain. Such a direction if given would necessarily result in this Court interfering with the action already initiated by the respondent banks under the provisions of the SARFAESI Act. What is prohibited to be done directly cannot be permitted to be done indirectly. We cannot constitute a committee and start an exercise which we are unable to supervise and doing of which is LPA No.395/2014 Page 4 of 6 fraught with risk and has the potential of creating further complications. Rights of third parties will have to be created, without the respondent banks immediately earning anything from its secured asset and which will also dilute the security in the hands of the respondent banks.
10. The Supreme Court recently in Jagdish Singh Vs. Heeralal (2014) 1 SCC 479 has also held that any person aggrieved of any of the measures referred to in Section 13(4) of the SARFAESI Act has got a statutory right of appeal to the DRT under Section 17; that if any aggrieved person has got any grievance against any such measures, the remedy open to him is to approach the DRT or the Appellate Tribunal. In another recent judgment in Standard Chartered Bank Vs. Dharminder Bhohi MANU/SC/1004/2013 it was held that the intendment of SARFAESI Act is for speedy recovery of dues of the bank and the tribunals have been established with a specific purpose to see that the disputes are disposed of quickly, regard being had to the larger public interest. We are of the view that in the facts and circumstances, neither any case for entertaining the writ petition or this appeal, in the face of the alternative remedy available, is made out and rather the reliefs claimed in the writ petition and this appeal are intended to delay the recovery of dues by the respondent banks and which is against the intendment of the Act. LPA No.395/2014 Page 5 of 6
11. The writ petition as well as this appeal are thoroughly misconceived. The appeal is dismissed.
RAJIV SAHAI ENDLAW, J.
CHIEF JUSTICE JULY 01, 2014 'gsr' LPA No.395/2014 Page 6 of 6