Bombay High Court
State Bank Of India vs State Of Maharashtra on 17 January, 2024
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2024:BHC-AS:2380-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
LAXMI WRIT PETITION NO. 289 OF 2024
SUBHASH
SONTAKKE
Digitally signed by
LAXMI SUBHASH
SONTAKKE
State Bank of India .. Petitioner
Date: 2024.01.18
17:29:00 +0530
Versus
State of Maharashtra & Ors. .. Respondents
Mr. Sidharth Samantarey a/w Ravindra Bhosale i/b. Vivek Sawant for
the Petitioner.
Mr. A. I. Patel, Addl. GP a/w. R. S. Pawar , AGP for the Respondent-
State.
Mr. Daljeet Singh Lall for the Respondent Nos. 4 to 6.
CORAM : B. P. COLABAWALLA &
SOMASEKHAR SUNDARESAN, JJ.
DATE : JANUARY 17, 2024
P. C.
1. The above Writ Petition is filed seeking direction to Respondent
Nos. 1 to 3 to take appropriate steps for taking possession of the subject
property being Flat Nos. 102, 601, 901 located on the 1 st Floor, 6th Floor and 9th
Floor at Building "Dev Kripa Enclave", L. T. Road No.1, MG Road, Goregaon
(W), Mumbai-400062. This relief is sought on the basis that though an order
under Section 14 of the SARFAESI Act, 2002, was passed and physical
possession was thereafter handed over to the Petitioner-Bank, the borrowers,
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namely, Respondent Nos. 4, 5 and/or 6 have illegally, and by taking the law
into their own hands, dispossessed the Petitioner-Bank and re-entered the
subject property.
2. The learned Counsel appearing for Respondent Nos. 4 , 5 and/or 6
sought to justify the actions of the said Respondents on the basis that they have
made a complaint to the Centralized Public Grievance Redressal and
Monitoring System Portal on 22nd September, 2023. According to Respondent
Nos. 4, 5 and/or 6 no monies are payable by the said Respondents to the
Petitioner-Bank inter-alia by relying upon the provisions of the Indian Coinage
Act, 1906 and that the banking system being unconstitutional and imbalanced,
all the commercial Banks of India have an exploitative and unconstitutional
interest as everyone knows that the paper currency in circulation of the
country is only being used by Reserve Bank of India and which money does not
reach the public. The further allegation in the complaint is that commercial
banks and financial companies have printed some monies out of thin air,
registered it on the bank passbook, and made it available to the loan holder in
the form of loan. Another fanciful allegation made is that the total circulating
paper currency in the country is less than the principal amount of loans
distributed by the banks/finance companies.
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3. We find that the justification given by Respondent Nos. 4, 5
and/or 6 is wholly without any merit. Even assuming for the sake of argument
that Respondent Nos. 4, 5 and 6 do not owe any money to the bank because the
same has been allegedly paid, does not permit them to take the law into their
own hands and dispossess the Petitioner-Bank after an order under Section 14
of the SARFAESI Act, 2002 is passed and possession of the concerned flats has
been handed over to the Petitioner. There is something called the rule and law
in this country and has to be followed by every citizen. If Respondent Nos. 4, 5
and/or 6 were aggrieved by the actions taken by the Petitioner-Bank, including
taking physical possession of the subject flats, remedies were available to them
to undo that action. Instead availing of those remedies, Respondent Nos. 4, 5
and 6 have taken the law into their own hands. This certainly cannot be
permitted.
4. This issue is no longer up for debate because in several judgments
of this Court, where the borrowers have taken the law into their own hands and
dispossessed the Banks/Financial Institutions [who have obtained orders
under Section 14 of the SARFAESI, 2002], have been ordered to vacate their
respective premises and restore possession back to the Bank/Financial
Institution. For the sake of convenience, we refer to the decision of this Court
in the case of RBL Bank Ltd. Vs. State of Maharashtra and Ors [Writ Petition
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No. 7058 of 2023 on 7th August, 2023]. The relevant portion of this decision is
at paragraph 12 and 13 thereof the said decision which reads thus:
"12. We find that this issue is no longer res-integral and is
covered by a decision of this Court in the case of Kotak Mahindra
Bank Ltd. (supra). In fact, the decision of this Court in of Kotak
Mahindra Bank Ltd. (supra) follows an earlier decision of a Division
Bench of this Court (Aurangabad Bench) in the case of The Nashik
Merchant Co-operative Bank v/s. The District Collector, Jalna &
Ors. [Writ Petition No. 10069/2022 decided on 28th February
2023]. The argument canvassed by the learned AGP before us was
identical to the argument canvassed before the Division Bench in the
case of The Nashik Merchant Co-operative Bank (supra). The
Division Bench after considering the aforesaid submissions, came to
the conclusion that they did not find any prohibition under the scheme
of the SARFAESI Act, 2002 that came in the way of the District
Magistrate or his delegate to re-exercise his powers to execute the
order passed by him under section 14 of the SARFAESI Act, 2002.
Accordingly, the Division Bench directed the Tehsildar to re-execute
the order passed by the District Collector and restitute the possession
of the secured asset to the Petitioner within 30 days from the date of
the said order. For the sake of convenience, the relevant portions of
this decision is reproduced herein below.
"7. The respondent No.2 in his reply affidavit states that
the order passed under Section 14 of the SARFAESI Act by
the respondent No.1/District Collector, was already executed.
The actual possession of the secured assets was delivered to
the petitioner on 06-08-2022. The respondent Nos. 1 and 2
stood discharged from their obligation under the statutory
scheme prescribed under the SARFAESI Act. No provision
under the Act provides for restoration of the possession to
secured creditor that has been lost by him after execution of
orders U/S 14 of SARFAESI Act.
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10. Mr. S.B. Yawalkar, learned AGP would submit
that the scheme under the SARFAESI Act provides for action in
terms of section 14 regarding handing over possession to the
secured creditors. Once the execution of order under section
14(2) is undertaken by the District Collector or his delegate
and possession of the secured asset is handed over to the
secured creditors, the District Magistrate becomes functus
officio and no further indulgence would be expected to him. He
would further submit that after receiving the possession as per
panchanama dated 06-08-2022, it was the petitioner's
responsibility to secure and protect his possession by taking
necessary measures. The statutory obligation on the State
machinery cannot be enlarged with further duty to protect the
possession of secured creditors.
15. The petitioner bank had exercised its right
under the SARFAESI Act and took recourse to the procedure
prescribed under section 13(2), 13(4) and section 14 of the
Act while taking possession of the secured assets under the
order dated 21-11-2020 passed by the District Collector,
Jalna. The petitioner bank was put into the possession under
panchanama dated 06-08-2022. It appears that the petitioner
bank had taken sufficient care to protect the secured property
by deploying guards. The respondent Nos. 5 and 6
overpowered the guards by taking law in their hands, forcibly
broke open the shutter lock of the shop, entered into the
secured property and took forcible possession. The bank
officers took immediate steps to prevent unlawful act of
respondent Nos.5 and 6. They had rightly approached the
Police authorities. The FIR was lodged promptly against
respondent Nos. 5 and 6 for offences punishable under
sections 447, 506 read with 34 of the IPC. They have
approached respondent No.2/ Tahsildar for protection/
preservation of their possession of the secured assets.
16. At this stage, a reference can be made to the
order passed by Division Bench of this Court in Writ Petition
No.8674/2021 in the matter of Bank of Baroda Vs. The State
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of Maharashtra and Ors. dated 24-02-2022 wherein, in
similar set of facts, the directions were given against the
District Magistrate to entertain the second application of the
petitioner filed under section 14 of the SARFAESI Act.
17. Mr. S.V. Adwant, learned advocate appearing
for the petitioner also places reliance on the Judgment
delivered by the Division Bench of High Court of Andhra
Pradesh in case of M/s. Sri.Balaji Centrifugal Castings Vs.
M/s ICICI Bank Limited. reported in (2018) SCC Online Hyd
368, wherein, it is held that there is no bar to secured creditor
maintaining more than single application under section 14(1) of
the SARFAESI Act for securing the possession of the very same
secured assets.
18. The similar view has been reiterated by the
High Court of Kerala in the matter of A.A. Kumaran v.
Superintendent of Police, Thissur and Ors. In WP (C) No. 5875
of 2022 dated 18-5-2022 wherein the Court observed thus:
21. Further, the present case reveals
an instance where a person has taken the law into
his hands by force and thereafter seeks the benefit
of legal principles. If such actions are permitted to
be perpetrated, rule of law will suffer
immeasurably. The purport of the Act is to divest
the owner of a property in the enforcement of
security interest and initiate measures to wipe off
the liability by resorting to measures including sale.
If measures taken for dispossession and
consequent sale are inter-meddled by persons like
respondents 4 and 5, it would result in a mockery
of the rule of law. The will of the people reflected
through the legislation will be seriously infringed, if
the court remains a mute spectator.
20. The uncontroverted factual aspects in present matter
depict that the respondent Nos.5 and 6 have devised novel,
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unimaginable and unsustainable modus operandi to defeat ends
of justice and fair play. It is not only the matter of physical
altercation, but would tantamount to assault on the law and
statute. They have the audacity to overrule the law. The
growing tendency of overpowering the law cannot be
tolerated. In peculiar facts and circumstances of this case, we
are inclined to exercise powers under Article 226 of the
Constitution of India to protect the rule of law and deprecate
rising tendency of using criminal force against recovery
proceeding undertaken by the financial institutions in terms of
SARFAESI Act. We do not find any prohibition under the
scheme of the SARFAESI Act that comes in the way of District
Magistrate or his delegate to re-exercise the powers to
execute the orders passed under section 14.'
21. After considering the factual and legal aspects
of the matter, we are of the considered view that this is a fit
case to exercise of our jurisdiction under Article 226 of the
Constitution of India and allow the writ petition in terms of
prayer clause (B) of the writ petition and award cost against
respondent No 5 & 6. Accordingly, we pass the following
order:-
ORDER
(A) The Writ Petition is partly allowed.
(B) The Respondent No.2/The Tahsildar, Jalna is directed to
execute the order passed by the respondent No.1/The District
Collector, Jalna and restitute the possession of the secured
assets to the petitioner within a period of thirty (30) days from
the date of this order.
( C ) The Respondent Nos. 5 & 6 shall deposit the cost of
Rs.25000/- within 30 days of this order in this Court failing
which those shall be recovered as land revenue."
13. Considering the law laid down by the Division Bench of
this Court and referred to by us above in Kotak Mahindra Bank Ltd.
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(supra), we are unable to agree with the submission made by the
learned AGP that the District Magistrate does not have the power to
re-exercise his own order or that he has become functus officio. If
we were to take the view as propounded by the learned AGP it
would lead to a complete chaos. We have no hesitation in stating
that the borrowers have devised a novel, unimaginable and
unsustainable modus operandi to defeat the ends of justice. It is not
only the matter of physical altercation by assaulting the security
guard appointed by the Petitioner Bank and breaking open the lock
and seal affixed on the secured asset which is wholly illegal, but the
same would also tantamount to an assault on the law and the
statute itself. If, after orders are passed under section 14 of the
SARFAESI Act, 2002, for dispossession of the borrower, and the
same are inter-meddled with by any person including the borrower,
the same would result in a mockery of the rule of law. In such a
situation the Court cannot and should not remain a mute spectator
and allow the illegality to continue. The tendency of trying to
overreach the law as well as the orders passed by Judicial
Authorities has to be nipped in the bud right away, lest the rule of
law shall suffer.
5. Considering the law laid down by this Court and the totality of the
facts and circumstances of the present case, the following order is passed:-
a) Respondent No.2 [The Court Commissioner], with the assistance of the
Senior Police Inspector, Goregaon Police Station, shall take physical
possession of Flat Nos. 102, 601, 901 located on the 1 st Floor, 6th Floor
and 9th Floor of the Building called "Dev Kripa Enclave", L. T. Road
No.1, MG Road, Goregaon (W), Mumbai-400062, on 24 th January, 2024
at 11.00 am.
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b) For the purpose of taking physical possession, the concerned Senior
Police Inspector, Goregaon Police Station, shall give all necessary
assistance to the Court Commissioner [including deputing adequate
number of police personnel] to ensure that Respondent No.2 [the Court
Commissioner] is able to take physical possession of the flats mentioned
above, and thereafter, handed over the same to the authorized officer of
the Petitioner-Bank, failing which, the concerned Senior Police Inspector
shall be liable for contempt.
c) The authorized officer of the Petitioner-Bank is also directed to remain
present at site on 24th January, 2024 at 11.00 am, so that physical
possession of the said flats can be handed over by Respondent No. 2 [the
Court Commissioner] to the Authorized Officer of the Petitioner-Bank
6. The above Writ Petition is disposed of in the aforesaid terms. It is
purely out mercy that we do not impose any cost on Respondent Nos. 4, 5
and/or 6. Hence, there shall be no order as to costs.
7. Though we have disposed of the above Writ Petition, we place the
same on board on 25th January, 2024 for reporting compliance.
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8. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by fax or
email of a digitally signed copy of this order.
[ SOMASEKHAR SUNDARESAN, J.] [ B. P. COLABAWALLA, J.]
JANUARY 17 2024
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