Deutsche Bank vs The State Of Maharashtra And 3 Ors
2021 Latest Caselaw 7324 Bom

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                     ORDINARY ORIGINAL CIVIL JURISDICTION

                       WRIT PETITION (L) NO.6385 OF 2021


Deutsche Bank                                                      ...Petitioner
     vs.
The State of Maharashtra and Others                                ...Respondents


Mr. Rafeeq Peermohidden M i/b.Goenka Law Associates, for the
Petitioner.
Mr. M.A. Adenwala a/w. Mr. Sippy Patawari, for Respondent Nos. 2
and 3.
Mr. H.Takkke, AGP for the Respondent-State.

                                      CORAM : A.A. SAYED &

                                                     MADHAV JAMDAR, JJ.

                                      DATED       : 06 MAY 2021

                                            (THROUGH V.C.)



P.C.:
.           The Petition has been filed by the Petitioner-Bank

seeking the following reliefs:

(a) That this Court be pleased to issue a Writ of Mandamus and/or any other writ directing the Respondent No. 1 to remove the unscrupulous and anti-social elements from outside the secured asset and assisting the Petitioner to perform its obligations under the SARFAESI Act.

(b) That this Court be pleased to pass an injunction and direct the Respondent Nos. 2 & 3 to refrain from

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disturbing in any manner, the rightful enjoyment of the secured asset by the Petitioner or any one acting through them, in order to enable the Petitioner to perform its obligations under the SARFAESI Act.

2. It is the case of the Petitioner-Bank that it had extended

financial assistance to Respondent Nos. 2 and 3. Office Nos.

701 and 702, 7th Floor, Shah Trade Centre Building, Rani Sati

Marg, Near Western Express Highway, Malad (East), Mumbai-

97 (hereinafter referred to as `secured assets') were

mortgaged to the Petitioner Bank as security. The Respondent

Nos. 2 and 3 borrowers defaulted in payments of EMIs and as

such the Petitioner-Bank declared the loan accounts as "Non

Performing Assets" (NPA) on 7th February, 2019. A demand

notice dated 8th March, 2019 under section 13(2) of the

SARFAESI Act, 2002 was served upon the said Respondent-

borrowers. There was no reply to the section 13(2) notice by

the Respondent Nos. 2 and 3 borrowers.

3. The further case of the Petitioner-Bank is that the

physical possession of the secured assets was handed over to

the Petitioner-Bank vide Possession Receipt dated 22 nd July,

2019 (Page 330 of the Petition). The said Possession Receipt

reads as follows:

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                   "Date: 22nd July 2019

                                     Possession Receipt

                 To:
                 Mr.D.V.Satelkar,

The Deutsche Bank Authorized Officer, 81, Nirlon Knowledge Park, Goregaon East, Mumbai- 400 063

Dear Sir, Ref: Surrender of Mortgaged Property

This is with reference to premises situated at Office No. 701 and 702, 7th Floor, Shah Trade Centre Building, Rani Sati Marg, Near Western Express Highway, Malad (East), Mumbai-97 for purchase / finance of which I/We have taken loan of Rs. 7,80,00,000/- from Deutsche Bank AG vide loan agreement no. 300026912570019 / 300026312570028 / 30026312570037 and credit facility loan account no.000026312570019. The said loans are secured by mortgage of the said premises in favour of Deutsche Bank AG for which I/We have deposited original property title documents.

I/We hereby acknowledge that I/We are in default of the said loan and receipt of notice dated 8 th March, 2019 under 13(2) of SARFAESI Act on received by me/ us on 11st March, 2019 by RPAD.

We authorized Deutsche Bank AG/ their authorised officer to take possession of said premises on as is basis and proceed with the auction sale under SARFAESI Act.

I/We hereby agree confirm and undertake to pay to you forthwith the difference if any, between the amounts due under the said loan and the sale consideration that may be obtained by you. In case of any surplus amount after sake of said premises, please do refund to me/us.

We requested you to release possession cum

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auction sale notice to minimize our losses.

We once again confirm that, we do not have any objection Deutsche Bank AG take the physical possession of the said premises and sell the same through auction sale under SARFAESI Act or private treaty.

I/We are signing the letter under without any one's force or coercion and will not held Deutsche Bank/their authorize officers responsible for the same.

Thanks & Regards, Pushpinder Singh

sd/-

Chairman Saints and Warriors Holdings LLP"

4. On 6th August, 2019 a letter was written by Respondent No. 2 borrower to the Petitioner-Bank acknowledging that the office keys have been handed over to the Petitioner-Bank. The said letter dated 6th August, 2019 reads as follows:

"Dt.06-08-2019 To, Mr. D.V. Satelkar, The Deutsche Bank Authorized Officer, B1, Nirlon Knowledge Park, Goregaon East, Mumbai - 63.

Sub: Surrender of office keys (Saints and Warriors.

Dear Sir, This is to inform you that we have handed over the office key of Saints and Warriors bearing office No. 1 & 2, 7th Floor, Shah Trade Centre Building, Rani Sati Marg, Near Western Express Highway, Malad (East), Mumbai-97 to Mr. Suketu Kansera.

Thanks.

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                 For Saints and Warriors.
                 sd/-
                 (Authorized Signatory)                Accepted by
                                                     (Suketu Kansara)"

5. The Petitioner-Bank thereafter went ahead with the

auction sale and after three failed attempts, was successful in

selling the secured assets on fourth attempt on 10 th February,

2021. It is pointed out that in pursuance of the auction sale,

the successful bidder has paid entire purchase price of Rs. 7.3

crores & the Sale Certificate has been issued to the auction

purchaser which has been registered with the Registrar of

Assurances & the sale of the secured assets is complete.

6. Learned Counsel for the Petitioner-Bank has pointed out

that despite the above, the Respondent Nos. 2 and 3

borrowers are not permitting the auction purchaser to enter

the said office premises which are secured assets and

creating obstruction and attempt is being to change the locks

of the secured assets.

7. On 27th April, 2021 we had passed an order, paragraph

Nos. 2 to 6 whereof read as follows:

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"2. It is not in dispute that the secured assets viz. Office Nos.701 & 702, 7th Floor, Shah Trade Centre Building, Rani Sati Marg, Near Western Express Highway, Malad (East) Mumbai 400 097 have been sold by the Petitioner-Bank pursuant to the auction conducted under the SARFAESI Act and the Sale Certificate has also been issued. It is the case of the Petitioner- Bank that despite handing over physical possession of the secured assets to the Petitioner-Bank voluntarily, as recorded in the possession receipt dated 22nd July, 2019 and the letter dated 6th August, 2019, the Respondent- borrower is creating hurdles by keeping bouncers outside the secured assets so that physical possession of the secured assets cannot be given to auction purchaser. The auction purchaser had paid the entire purchase price of Rs.7.3 crores.

3. The Respondent-borrower had already approached the DRT by filing Securitization Application No.53 of 2021 and Interlocutory Application No.484 of 2021 and the prayer for ad-interim relief has been rejected by the DRT.

4. According to the learned Counsel for the Respondent-Borrower, the Respondent-Borrower has buyer of secured assets, who is willing to pay Rs.7.74 crores. Learned Counsel for the Petitioner has pointed out that the dues which are payable by the Respondent-borrower were more than Rs.9 crores at the time of taking possession.

5. Before we pass any order in the Writ Petition, without prejudice to the rights and contentions of the parties, and to test bonafide of the Respondent- borrower, we allow the Respondent-borrower to deposit an amount of Rs.7.3 crores in this Court before the next date, failing which appropriate orders shall be passed.

6. List the Writ Petition on 6th May, 2021, HOB."

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8. According to the learned Counsel for the Respondent

Nos. 2 and 3, pursuant to the aforesaid order, the Respondent

No. 2 & 3 borrowers had attempted to deposit part payment

of Rs. 2 crores in the Court. It is contended that the

Respondent Nos. 2 and 3 borrowers have a purchaser who is

willing to buy the secured assets at a sum of Rs. 7.74 crores.

It is submitted that the proposed purchasers have applied for

a loan to Kotak Mahindra Bank.

9. We find that the Respondent Nos. 2 and 3 borrowers

have not complied with the aforesaid order. We are not all

satisfied with the statement made on behalf of Respondent

Nos. 2 and 3 borrowers or the statement of proposed

purchasers in the letter dated 4th May 2021 that they are

willing to buy the secured assets for a sum of Rs. 7.74 Crores

and they have applied for a loan of Rs.4.5 crores to the Kotak

Mahindra Bank. Pertinently, from the letter dated 13 th

February, 2021 of the Kotak Mahindra Bank, it appears that

the loan of Rs.4.5 crores is applied showing the secured

assets herein as security to be offered.

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10. Learned Counsel for Petitioner-Bank has pointed out that

the Respondent Nos. 2 and 3 borrowers have approached the

D.R.T., Mumbai by filing Securitisation Application and Interim

Application wherein an ad-interim order was sought for

prohibiting the Petitioner Bank from taking physical

possession of the secured assets sold in auction sale on 10 th

February, 2021, which has been refused by D.R.T.

11. Learned Counsel for the Respondent Nos. 2 and 3

borrowers submits that physical possession of the secured

assets was not handed over to the Petitioner-Bank and the

Petitioner-Bank has not followed the procedure under section

14 of the SARFAESI Act, 2002 for taking physical possession.

He has placed reliance on the following judgments to contend

that the due procedure for taking physical possession is not

followed:

(i) (2014) 5 Supreme Court Cases 610, Mathew Varghese vs. M. Amritha Kumar and Others.

(ii) (2014) 5 Supreme Court Cases 651, J. Rajiv Subramaniyan and Anr. vs. M/s. Pandiyas and Ors.

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12. We have heard the learned Counsel for the Petitioner-

Bank and Respondent Nos. 2 and 3 borrowers.

13. At the outset, we make it clear that in the present case

we are only concerned with the obstructions being caused by

the Respondent Nos. 2 & 3 in not permitting the Petitioner-

Bank and/or the auction purchaser to the free ingress and

egress to the said secured assets. We find from the

possession receipt dated 22nd July, 2019 and letter dated 6th

August, 2019 that the Respondent Nos. 2 and 3 borrowers

had voluntarily handed over possession and keys of the

secured assets to the Petitioner Bank and it was recorded in

the possession receipt that the Respondent Nos. 2 and 3

borrowers have no objection to the Petitioner-Bank selling the

secured assets through auction sale. Having sold the secured

assets to the auction purchaser, after 3 failed attempts and

the auction purchaser having paid the entire purchase price

and the Sale Certificate also having been registered, the

Petitioner-Bank is under an obligation to handover physical

possession of the secured assets to the auction purchaser. It

is submitted by learned Counsel for the Petitioner-Bank that

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the physical possession of the secured assets is with the

Petitioner-Bank and the possession and keys of the secured

assets were handed over by the Respondent Nos.2 and 3

borrowers to the Petitioner-Bank voluntarily. It is submitted

that the Petitioner-Bank has given inspection of the secured

assets to the auction purchaser which shows that the physical

possession is with the Petitioner-Bank.

14. We prima facie find that there was no requirement for

the Petitioner-Bank to approach to the District Magistrate

under section 14 of the SARFAESI Act, 2002 as the possession

of the secured assets was handed over by Respondent Nos. 2

and 3 borrowers to the Petitioner-Bank voluntarily. We note

that the Respondent Nos. 2 and 3 borrowers have already

filed a Securitisation Application before the D.R.T., Mumbai,

challenging the auction sale. In the event the Respondent

Nos. 2 and 3 borrowers succeed in the Securitisation

Application, they would be entitled to possession of the

secured assets, if the auction sale is set aside. The judgments

relied upon by the learned Counsel for the Respondent Nos. 2

and 3 borrowers are not applicable to the facts of the present

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case where possession of the secured assets was handed

over by Respondent Nos. 2 and 3 borrowers to the Petitioner

Bank voluntarily. The only explanation by Respondent Nos.2

and 3 borrowers in respect of the possession receipt dated

22nd July, 2019 is that the said possession receipt was taken

under coercion by the Petitioner-Bank. We, however, do not

find any substance in the contention. Even after the

possession receipt dated 22nd July, 2019, on 6th August, 2019,

the Respondent Nos. 2 and 3 borrowers by their letter have

re-iterated that the keys of the secured assets have been

handed over to the Petitioner-Bank.

15. We are of the view that the conduct of the Respondent

Nos. 2 and 3 borrowers is not bonafide and they want to

somehow stall the auction purchaser from taking possession

of the secured assets. This Court cannot be a mute spectator

to the high-handed acts of the Respondent Nos. 2 and 3

borrowers.

16. In the circumstances, we allow the Petition in terms of

prayer clause (a) and (b).

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17. We reiterate that so far as the present Petition is

concerned, we are only concerned with the obstruction to

access of the secured assets. So far as the validity of auction

sale is concerned, the same is the subject matter before the

D.R.T., Mumbai in the Securitisation Application which has

been filed by the Respondent Nos. 2 and 3 borrowers. We,

therefore, make it clear that any observation and/or finding

by us in this order would not in any manner affect the case of

the Respondent Nos. 2 and 3 borrowers before the D.R.T.,

Mumbai in Securitisation Application and all contentions of

the Respondent Nos. 2 & 3 borrowers in that regard are kept

open.

18. The Petition is allowed in the aforesaid terms.

 (MADHAV JAMDAR,J.)                                           (A.A.SAYED, J.)




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