Schefields Limited And Ors vs The Authorised Officer
2021 Latest Caselaw 1711 Cal/2

                                       1



OD-5
                      IN THE HIGH COURT AT CALCUTTA
                        Constitutional Writ Jurisdiction
                               ORIGINAL SIDE


                               WPO/1460/2021

                       SCHEFIELDS LIMITED AND ORS.
                                    VS
           THE AUTHORISED OFFICER, ASREC(INDIA) LIMITED AND ORS.

BEFORE:
The Hon'ble JUSTICE RAJASEKHAR MANTHA
Date : 23rd December, 2021.
                                                                        Appearance:
                                                              Mr. S. N. Mitra, Sr. Adv.
                                                                 Mr. Pranit Bag, Adv.
                                                   Mr. Pradeep Kumar Jewrajka, Adv.
                                                             Ms.Pooja Jewrajka, Adv.
                                                             Mr. Debdutta Saha, Adv.
                                                                 ...for the petitioners.

                                                                Ms. Usha Doshi, Adv.
                                                             Ms. Priyanka Gope, Adv.
                                                               ...for the respondents.

The Court : The writ petitioners are aggrieved by a notice dated 15th

November, 2021 under Section 13(4) of the SARFAESI Act, 2002 issued by the

respondent no.1 ASREC (India) Limited. The notice has, however, been issued

under Section 13(4) of the SARFAESI Act, 2002. The matter has a chequered

history.

The first objection that any financial institution can raise is to the

jurisdiction of the High Court under Article 226. Since an effective alternative

remedy of appeal under Section 17 of the SARFAESI Act, 2002 is available to the

petitioners.

However, it is submitted by counsel that the DRT No.1 is not functioning

since Presiding Officer has not yet been appointed. In view of the aforesaid and

the directions of the Hon'ble Supreme Court to entertain challenges under RDB

Act, 1993 and the SARFAESI act, 2002 under Article 226 of the Constitution, the

petition is entertained.

The original creditor was the Central Bank of India. The accounts of the

petitioners had become non-performing assets. The Central Bank of India

assigned and transferred the entire assets and liabilities under the provisions of

the SARFAESI Act, 2002 to one Phoenix ARC Private Limited.

The deed of assignment between Central Bank of India and M/s. Phoenix

ARC Private Limited has been held to be unenforceable by the DRT at Kolkata in

OA No.189 of 2009. Phoenix was therefore held disentitled to substitute itself in

place of the Central Bank in the OA No. 189 of 2009. Thereafter, diverse

proceedings took place. In course of an Appeal No.74 of 2014/125 arising out of

the same proceedings on April 2, 2018, the bank had submitted before the DRAT

that the deficit stamp duty on the deed of assignment has been paid.

The final hearing of the OA No. 189 of 2009 before the Debts Recovery

Tribunal has been concluded. The issues for adjudication are, inter alia, as to

whether the deed of assignment between CBI and M/s, Phoenix or M/s. ARSEC

(India ) Limited is lawful or valid; whether the counter-claim of the writ

petitioners against the creditor and its substitutes is sustainable etc. A large

counter-claim has been filed against the Bank by the writ petitioners.

Mr. Mitra, learned Senior Counsel for the petitioners, argues that the

original notice under Section 13(2) issued by M/s. Phoenix is itself without

jurisdiction as the assignment by CBI continues to be invalid. That apart the

delay of about 12 years [after 13(2)] in issuing notice under Section 13(4) would

render it illegal.

Be that as it may, having heard the learned Counsel for the parties, this

Court is of the view that the balance of convenience, in the peculiar

circumstances of the case would be in favour of, awaiting the judgment in OA No.

189 of 2009 from the Debts Recovery Tribunal which is since pending. Arguments

have been concluded and notes have been filed. In that view of the matter, the

impugned notice dated 15th November, 2021 under Section 13(4) of the

SARFAESI Act, 2002 shall remained stayed for the period of two months from

date or the judgment of the DRT in OA 186 of 2009 whichever is earlier.

The Debts Recovery Tribunal no.1 or any other Tribunal assigned with the

responsibilities of the DRT No.1, Kolkata shall pronounce judgment in OA No.189

of 2009 based on the records and notes already filed. The said DRT no.1 may,

however, call for oral submissions to be made afresh by Counsel for the

respective parties before it. It is requested that the judgment as above be

delivered within a period of two months from date of communication of the copy

of this order.

The Registry of the DRT shall place this order before the concerned DRT or

in charge of matters of DRT-1. It is submitted by learned counsel for the

petitioner that the DRT III is holding such charge.

Let affidavit-in-opposition be filed by the respondents within a period of

four weeks from date; reply thereto, if any, be filed two weeks thereafter.

Liberty to mention for hearing after completion of affidavits.

The parties shall also be entitled to seek variation and/or modification of

the aforesaid interim order, in chain circumstances upon notice to either side.

(RAJASEKHAR MANTHA , J.)

s.pal