Calcutta High Court (Appellete Side)
Kotak Mahindra Bank Ltd vs Moongipa Roadways & Ors on 29 August, 2023
29.08.2023
Sl. No.12(DL)
srm
C.O. No. 3659 of 2022
Kotak Mahindra Bank Ltd.
Versus
Moongipa Roadways & Ors.
Ms. Somi Ojha,
Ms. Sonia Nandy
...for the Petitioner.
Mr. Vikas Baisya,
Mr. Sourojit Dasgupta,
Mr. A. Chatterjee
...for the Opposite Parties.
Affidavit-in-opposition and reply are taken on record.
The revisional application arises out of an order dated
November 9, 2022 passed by the District Magistrate, Howrah,
under Section 14 of the SARFAESI Act. According to the
District Magistrate, as the deeds which were submitted along
with the application under Section 14 of the SARFAESI Act
indicated that RS Dag No.633 corresponding to LR Dag
No.992, RS Dag No.640 corresponding to LR Dag No.999 and
LR Dag Nos.686, 687 and 688, were sali lands, the bank could
not take recourse to the said section, for taking over possession
of the agricultural lands.
On the point of maintainability raised the opposite
parties, the Hon'ble Apex Court in the matter of Harshad
Govardhan Sondagar vs International Assets Reconstruction
Co. Ltd. & Ors. reported in (2014) 6 SCC 1 was of the view that
an application under Article 227 of the Constitution of India
could be entertained from an order passed by the District
Magistrate under Section 14 of the SARFAESI Act as a
purposive and contextual construction should be given to the
said section. The relevant paragraph is quoted below:-
22. Sub- section (3) of Section 14 of the SARFAESI Act
provides that no act of the Chief Metropolitan Magistrate
or the District Magistrate or any officer authorised by the
Chief Metropolitan Magistrate or District Magistrate
done in pursuance of Section 14 shall be called in
question in any court or before any authority. The
SARFAESI Act, therefore, attaches finality to the decision
of the Chief Metropolitan Magistrate or the District
Magistrate and this decision cannot be challenged before
any court or any authority. But this Court has repeatedly
held that statutory provisions attaching finality to the
decision of an authority excluding the power of any other
authority or Court to examine such a decision will not be
a bar for the High Court or this Court to exercise
jurisdiction vested by the Constitution because a
statutory provision cannot take away a power vested by
the Constitution. To quote, the observations of this Court
in Columbia Sportswear Company v. Director of Income
Tax, Bangalore [(2012) 11 SCC 224]:
"17. Considering the settled position of law that the
powers of this Court under Article 136 of the
Constitution and the powers of the High Court
under Articles 226 and 227 of the Constitution could
not be affected by the provisions made in a statute
by the Legislature making the decision of the
tribunal final or conclusive, we hold that sub-
section (1) of Section 245S of the Act, insofar as, it
makes the advance ruling of the Authority binding
on the applicant, in respect of the transaction and on
the Commissioner and income- tax authorities
subordinate to him, does not bar the jurisdiction of
this Court under Article 136 of the Constitution or
the jurisdiction of the High Court under Articles 226
and 227 of the Constitution to entertain a challenge
to the advance ruling of the Authority."
In our view, therefore, the decision of the Chief
Metropolitan Magistrate or the District Magistrate can be
challenged before the High Court under Articles 226 and
227 of the Constitution by any aggrieved party and if
such a challenge is made, the High Court can examine
the decision of the Chief Metropolitan Magistrate or the
District Magistrate, as the case may be, in accordance
with the settled principles of law.
The revisional application is entertained only on the
ground that the District Magistrate did not take into
consideration the relevant documents with regard to the
sanction of loan and the notices issued to the borrower. Such
documents would demonstrate the description of the property,
which were mentioned as godowns.
Learned Advocate for the bank submits that the Hon'ble
Apex Court had held in the decision of ITC Limited vs. Blue
Coast Hotels Limited & Ors. reported in (2018) 15 SCC 99 that
if the parties proceeded as if the lands were not agricultural
lands, in that event, the bar under the SARFAESI Act
permitting the bank from proceeding against agricultural land
would not be applicable. The Hon'ble Apex Court held that
the court should proceed on a case to case basis, to ascertain
the actual facts. The relevant paragraphs are quoted below:-
"37. In the present case, security interest was created in
respect of several parcels of land, which were meant to be
a part of single unit i.e. the five-star hotel in Goa. Some
parcels of land now claimed as agricultural land were
apparently purchased by the debtor from agriculturists
and are entered as agricultural lands in the revenue
records. The debtor applied to the Revenue Authorities for
the conversion of these lands to non-agricultural lands
which is pending till date due to policy decision.
38. It is undisputed that these lands were mortgaged in
favour of the creditor under a deed dated 26-2-2010.
Obviously, since no security interest can be created in
respect of agricultural lands and yet it was so created, goes
to show that the parties did not treat the land as
agricultural land and that the debtor offered the land as
security on this basis. The undisputed position is that the
total land on which the Goa Hotel was located admeasures
182225 sq m. Of these, 2335 sq m are used for growing
vegetables, fruits, shrubs and trees for captive
consumption of the hotel. There is no substantial evidence
about the growing of vegetables but what seems to be on
the land are some trees bearing curry leaves and coconut.
This amounts to about 12.8% of the total area."
The learned Advocate for the bank has referred to the
sanction order and the notice under Section 13(2) of the
SARFAESI Act, in order to demonstrate that both the parties
treated the lands as non-agricultural land and godowns had
been constructed on the said land.
In such view of the matter, this Court invokes the
general power of superintendence and sets aside the order
impugned. Non consideration of relevant laws and materials
on record in the ground for setting aside of the order. The
matter is remanded to the District Magistrate, Howrah, for a
fresh decision, upon allowing the bank to rely on the relevant
documents and the judgment of the Hon'ble Supreme Court.
It is made clear that the borrower will always be at
liberty to challenge the order of the District Magistrate before
the appropriate forum, if any decision is taken adverse to the
interest of the borrower, on merits of the application under
Section 14 of the SARFAESI Act.
The revisional application is, thus, disposed of.
There will be, however, no order as to costs.
Parties are to act on the basis of the server copy of this
order.
(Shampa Sarkar, J.)
