Chattisgarh High Court
Jm Financial Asset ... vs Indian Bank (Allahabad Bank) on 27 January, 2022
HIGH COURT OF CHHATTISGARH, BILASPUR
Order Sheet
WPC No. 468 of 2022
JM Financial Asset Reconstruction Company Ltd Versus Indian Bank (Allahabad
Bank) & others
27/01/2022 Mr. R.K. Sanghi, Advocate for the petitioner.
Mr. Prafull N. Bharat, Senior Advocate along with Mr.
Harishankar Patel, Advocate for the respondent No.1-Bank.
Mr. Satish Agrawal, Advocate with Mr. Ankit Singhal, Advocate for
the respondents No. 3 to 7.
Petition is admitted for hearing.
Issue notice to the respondents No. 2, 8 & 9 on payment of P.F.
as per Rules.
Also heard on I.A. No.1, which is an application for grant of
interim relief.
The petitioner in the present writ petition has sought for a relief of
stalling the auction sale notice and the proceedings thereto initiated by
the respondent No.1-Bank, so far as the auction of the mortgaged
property mentioned in the impugned auction sale notice.
The interim protection sought for is till their securitization
application pending before the DRT, Jabalpur is not heard and decided
on merits. Learned counsel for the petitioner submits that the petitioner
has filed the instant writ petition since the DRT Jabalpur as of now is
not functional on account of the office of the Presiding Officer lying
vacant for quite sometime now and has also approached this Court in
the light of the judgment of the Hon'ble Supreme Court in the case of
"Madhya Pradesh State Bar Council v. Union of India & others".
The primary contention of the petitioner in claiming for an interim
protection as of now and also their substantial claim before the DRT
Jabalpur in their securitization application is that the petitioner have a
second charge created in their favour in respect of the very same
property, the description of which is given in the auction notice
Annexure P/13 dated 11.01.2022 fixing the auction date to be on
02.02.2022. According to the petitioner, the second charge created in
their favour has also been registered with the Registrar and therefore
the auction notice issued by the respondents is in contravention to the
requirement laid down under Section 13(9) of the SARFAESI Act, 2002.
According to the contention of the petitioner, since the petitioner also
has a substantial right created on the secured assets by way of the
second charge, the respondent No.1 alone could not have initiated the
auction notice. It could had been only after taking the petitioner also
into confidence and a no objection in this regard having been obtained
from the petitioner as well.
There is a categorical averment by the counsel for the petitioner
that they were neither consulted nor approached nor an NOC obtained
before the auction notice was issued. According to the petitioner, the
respondent No.1 ought to have initiated steps under the SARFAESI Act
in a manner wherein the interest of the petitioner as well, who is also an
investor particularly who has invested more than the respondent No.1
can also realize the outstanding amount. Learned counsel for the
petitioner also referred to an NOC that was issued by the respondent
No.1 while creating the second charge. According to the petitioner, they
have already approached the DRT, Bench at Jabalpur vide
securitization application No. 14/2020 and where the DRT has already
issued notices to the respondents including the respondent No.1
herein-the Allahabad Bank. The contention of the petitioner is that the
dispute before the DRT itself is for an appropriate direction to the
respondent-Bank to recognize the charge and debt in favour of the
applicant-Company.
After issuance of the notice, the DRT Jabalpur is not functional
for want of a regular Presiding Officer for quite sometime now and
therefore the petitioner could not insist upon the interim application
before the DRT. Hence they have approached this Court for an interim
protection till the DRT becomes functional. The contention of the
petitioner is that in case if the petitioner is not granted an interim
protection at this juncture, the very application pending before the DRT,
Jabalpur itself would become infructuous. That if the respondent No.1 is
now permitted to proceed with the auction sale of the mortgaged
property thereafter it will be too difficult for the petitioner to realize their
outstanding amount from the borrower i.e. the respondents No.3 to 7.
Learned Senior Counsel for the respondent No.1 on instruction
submits that it is a case where the claim for second charge by the
petitioner was conditional as would be evident from Annexure P/2.
According to him it was accepted on the condition that the petitioner
herein would create a second charge on the property of the respondent
No.2 situated at Raipur. It is the further contention of the learned Senior
Counsel that his reciprocal condition put by the respondent-Bank was
not accepted and honored by the petitioner and therefore the NOC
issued on 16.03.2012 has lost its efficacy. The petitioner cannot now
bank upon the said documents for creating or claiming a second
charge.
However, on perusal of records, particularly the pleadings before
the DRT, Jabalpur, there are documents, which prima-facie show that a
second charge has been created and the creation of the second charge
was also registered with the ROC.
Given the said facts, in case if the respondent No.1 is permitted
to proceed with the auction sale of the mortgaged property, not only
would the securitization application preferred by the petitioner before
the DRT would get infructuous, but it would also hamper upon the claim
of the petitioner so far as realization of their amount of investment that
they have made with the borrower. Moreover, from the records
available from the pleadings it is also evident that the loan advanced by
the respondent No.1-Bank was only to the tune of Rs.50 Crores (500
Millions), whereas the amount of loan given by the petitioner to the
borrower is Rs.100 Crores (1 Billion).
Taking all the aforesaid factual matrix of the case, this Court is of
the opinion that purely as an interim measure, the respondent No.1 is
directed to ensure that let auction proceedings ordered to be held on
02.02.2022 be proceeded with, as per the auction notice, however the
auction sale shall not be finalized till the next date of hearing or till the
DRT becomes functional, whichever is earlier.
Let the respondents file their respective response within a period
of 4 weeks and the matter be listed for further hearing in the week
commencing 21st of March, 2022.
Sd/-
(P. Sam Koshy)
Judge
Ved
