Daya Shankar Singh vs Indian Bank (Allahabad Bank) And ...
2023 Latest Caselaw 8350 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?Court No. - 5
 

 
Case :- MATTERS UNDER ARTICLE 227 No. - 2567 of 2023
 

 
Petitioner :- Daya Shankar Singh
 
Respondent :- Indian Bank (Allahabad Bank) And Another
 
Counsel for Petitioner :- Yogesh Narayan Dubey
 
Counsel for Respondent :- C.S.C.,Amrish Sahai
 

 
Hon'ble Prakash Padia,J.

Heard learned counsel for the petitioner and Sri Amrish Sahai learned counsel for respondent.

The petitioner has preferred the present petition challenging the order dated 20.12.2022, passed by the Chief Judicial Magistrate, Gorakhpur. The aforesaid order was passed under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002).

It is argued by learned counsel for the petitioner that the aforesaid order was passed without providing any notice or opportunity to the petitioner and the same is liable to be set-aside. Learned counsel for the petitioner has also placed reliance upon a judgment delivered by the co-ordinate Bench of this Court on 13.9.2019 in Matter Under Article 227 No.6561 of 2019 (Daya Shankar Singh vs. Chief Judicial Magistrate and 2 Others). The order dated 13.9.2019 is quoted as under:-

"Heard learned counsel for the petitioner and learned Standing Counsel.

The present petition has been filed against the order dated 04.05.2019 passed by the Chief Judicial Magistrate, Gorakhpur in Case No. 1360 of 2019; whereby, the Station House Officer of the Police Station concerned has been directed to take the possession of the immovable property of the petitioner and to prepare inventory of the goods.

Learned counsel for the petitioner submits that before passing the impugned order, no notice or summon has been issued to the petitioner and therefore, the impugned order has been passed ex parte without providing any opportunity of hearing to the petitioner and thus, the impugned order is in teeth of the principles of natural justice.

Learned counsel for the respondents could not justify the aforesaid fact of passing of ex parte order.

Perusal of the records goes to show that the impugned order has been passed ex parte without granting any opportunity of hearing to the petitioner and therefore, the same is unsustainable in law.

In view of the facts & circumstances of the case narrated above, the petition is allowed. The order dated 04.05.2019 passed by the Chief Judicial Magistrate, Gorakhpur in Case No. 1360 of 2019 is hereby set aside. The matter is remanded to the court below for deciding the matter afresh.

The parties concerned shall appear before the court below on 17.08.2022 to present their case. Thereafter, the court concerned shall consider and decide the aforesaid case in accordance with law expeditiously and preferably within a period of two months thereafter, but certainly after giving opportunity to the parties concerned and without granting unnecessary adjournments to either of the parties."

On the other hand, Sri Amrish Sahai, learned counsel for respondent has placed before this Court a judgment of the Division Bench of this Court passed in Writ-C No.22594 of 2022 (Shipra Hotel Limited and another vs. State of U.P. and others) on 25.11.2022. He placed reliance upon paragraph no. 45 of the aforesaid judgment. The paragraph no. 45 is reproduced below:-

"45. The availability of the statutory remedy to the borrower under Section 17 of the SARFAESI Act, 2002, contained in Chapter III against the order under Section 14 cannot be disputed. The Division Bench in the case of Kumkum Tentiwal (supra) did not consider the law propounded by the Apex Court in Standard Chartered Bank vs. V. Noble Kumar and others that Section 14 cannot stand independent of Section 13(4) and if a borrower has no right of hearing when the secured creditor takes possession under Section 13(4), no hearing can be demanded by him when he succeeds in resisting possession being taken over by the Authorized Officer of the secured creditor or does not on his own surrender possession and thus, compels the secured creditor to seek assistance of the CMM/DM under Section 14. The right of a borrower to approach the Tribunal in terms of Section 17, as a post possession right, recognised in Standard Chartered Bank vs. V. Noble Kumar and others (supra) as per the legislative scheme has been completely ignored."

On the basis of aforesaid judgment it is argued by learned counsel for the respondent that powers of the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act is purely executionary in nature having no element of quasi-judicial functions and the power exercised by CMM/DM is a Ministerial Act. It is further argued that before passing an order under Section 14 of the Act, 2002, notice and opportunity is not required to be given. In support of his aforesaid submission, learned counsel for the respondent has placed reliance upon paragraph nos. 51 and 52 of the aforesaid judgment. The paragraph nos. 51 and 52 are quoted as under:-

"51. At the cost of repetition, it may be noted at this juncture, that in a recent decision dated 27th July, 2022 in M/s R.D. Jain and Co. (supra), the Apex Court has considered that the powers of the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act is purely executionary in nature having no element of quasi-judicial functions and the power exercised by CMM/DM is a Ministerial Act. As per the dictionary meaning of "Ministerial Act", an authority performing "Ministerial Act" has no liberty to exercise of his own judgment. The enquiry under Section 14 by the CMM/DM is restricted to only two aspects; (i) whether the secured asset falls within his territorial jurisdiction, and (ii) whether notice under Section 13(2) of the Act, 2002 is given or not. No adjudication of any kind is contemplated at that stage. The legal niceties of the transaction is not to be examined by the Magistrate to examine the factual correctness of the assertions made in the affidavit, filed in accordance with the first proviso to sub-section (1) of Section 14 to record his satisfaction to pass appropriate order for taking of possession of the secured asset.

52. In view of the above discussion, it is held that the CMM/DM acting under Section 14 of the SARFAESI Act, 2002 is not required to give notice to the borrower at the stage of the decision or passing order as no hearing can be demanded by the borrower at this stage. However, it is clarified that the order passed by such Magistrate has to be duly served upon the borrower before taking any steps for his forcible dispossession by such steps or use of force, as may be necessary in the opinion of the Magistrate, and the date fixed for such forcible action shall be duly intimated to such borrower in advance giving him sufficient time to remove his belongings, or to make alternative arrangement."

Lastly, it is argued by learned counsel for respondent that against the order impugned, the only remedy is available to the petitioner to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act, 2002.

Heard learned counsel for the parties and perused the records.

From perusal of the record, it transpires that a decision has been taken by the Chief Judicial Magistrate, Gorakhpur against the petitioner in the proceedings initiated under Section 14 of the Act, 2002. The basic grounds taken by the petitioner while filing the present petition is that the aforesaid order has been passed without providing any opportunity of hearing hence same has been passed in violation of principle of natural justice hence same is liable to be set aside in order to strengthen his arguments he placed reliance upon a judgement delivered by a Coordinate Bench of this Court in the case of Daya Shankar Singh (supra).

On the other hand Mr. Amrish Sahai, learned counsel for the respondent-bank placed reliance upon the judgement delivered by a Division Bench of this Court in the case of Shipra Hotel Limited (supra).

After going through the aforesaid it transpires that law in this connection is well settled as has been held by the Hon'ble Apex Court in the case of Standard Chartered Bank Vs. V. Noble Kumar and others reported in (2013) 9 SCC 620 that the borrower has no right of hearing when the secured creditor takes possession under Section 13 (4) of the Act. It was observed in the aforesaid judgment that no hearing can be demanded by a borrower. It is further argued in the aforesaid judgement that the power exercised by Chief Metropolitan Magistrate/District Magistrate is the "Ministerial Act".

In this view of the matter, the Court of the opinion that the opportunity of hearing is not required to be given by the concerned Magistrate while passing the order under Section 14 of the Act, 2002. In the case of Daya Shankar Singh (supra) as cited by the counsel for the petitioner the aforesaid aspect of the matter was not taken into consideration. Further the judgement delivered by the Hon'ble Apex Court in the case of Standard Chartered Bank (supra) was also not placed before the Bench while the aforesaid aforesaid order was passed. In view of the aforesaid, the Court is of the opinion that the judgement cited by the counsel for the petitioner in the case of Daya Shankar Singh (supra) is not a binding precedent.

Apart from the same, statutory alternative remedy is available to the petitioner as provided under Section 17 of the Act, 2002. In the case of United Bank of India v. Satyawati Tandon and Others, (2010) 8 SCC 110 it has been held by the Hon'ble Apex Court that in case statutory alternative remedy is available the petition should not be entertained by the High Courts. The relevant paragraph of the aforesaid judgement reads as follows :-

"42. 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 Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression `any person' used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the 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.

43.Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a 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 of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal 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."

In this view of the matter, the Court is of the opinion that the order passed by the Chief Judicial Magistrate, Gorakhpur dated 20.12.2022, which is under challenged in the present petition is absolutely perfect and valid order and does not call for any interference.

In view of the same, petition is liable to be dismissed and is hereby dismissed.

It is made clear that this order will not preclude the petitioner to file an appeal as provided under Section 17 of the Act, 2002, before the Debts Recovery Tribunal, if so advised.

Order Date :- 22.3.2023

S.K.