Kevin Yogeshkumar Alendry ... vs Collector And District ...
2021 Latest Caselaw 7200 Guj

      C/SCA/7777/2021                                 ORDER DATED: 29/06/2021



             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/SPECIAL CIVIL APPLICATION NO. 7777 of 2021
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     KEVIN YOGESHKUMAR ALENDRY THROUGH POA YOGESHKUMAR
                    YESHWANTSINH ALENDRY
                            Versus
               COLLECTOR AND DISTRICT MAGISTRATE
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Appearance:
MR AS ASTHAVADI(3698) for the Petitioner(s) No. 1,2
for the Respondent(s) No. 1,2,3
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 CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI

                               Date : 29/06/2021

                                 ORAL ORDER

1. Present petition under Articles 226 and 227 of the Constitution of India is filed for the purpose of seeking following reliefs:-

"A. Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ order and dirction quashing and setting aside and impugned order dated 21.01.2021 passed bythe Collector and District Magistrate Panchmahal in SARFAESI/ Case no.25 of 2020 (Annexure-A).

B. During pendency and final hearing this petition, Your Lordship may be pleased to stay the execution and implementation of impugned order dated 21.01.2021 passed by the Collector and District Magistrate Panchmahal.

       C.       ............
       D.       ............"

2. For essentially challenging the decision dated 21.1.2021 passed by the respondent Collector and District Magistrate, Panchmahal, the petitioners have raised three fold submissions at the outset. Aggrieved by the order, learned advocate for the petitioner Mr. Asthavadi has submitted that the order in question is passed without granting any opportunity to the petitioners. The said order is a non-speaking order and has further asserted that no dues are outstanding, still the bank submitted an application, upon which, an order came to be passed. It has further been asserted that there

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is no alternate and efficacious remedy available to the petitioners and as such, the petitioners have brought this petition by invoking extraordinary jurisdiction of this Court.

3. Before deciding the present petition, few following facts are required to be considered:-

3.1. The present petitioners have been extended with Credit facilities in the form of cash credit and term loan. The facilities were having security cover, as stated in the bank's application reflecting on page 61 of the petition compilation and on page 62, other terms and conditions have been attached in the form of Annexure-II. On account of some circumstances which are not relevant to the present controversy, it appears that the bank was forced to initiate proceedings under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter to be referred as 'the Act' for short), by serving a notice on 10.2.2020, indicating the outstanding loan, as indicated on page 88. The said notice having been received by the petitioners, was replied, vide communication dated 13.2.2020 by the petitioners and thereafter, some exchange of correspondences between the bank and the petitioners took place, but issue has not been resolved. It appears that symbolic possession was taken of the mortgaged property in the month of June 2020. It further appears that later on, the respondent bank was constrained to prefer an application under Section 14 of the Act along with all detailed particulars and necessary procedure having been observed, as required under Section 14 of the Act. This step initiated by the bank was before learned Collector and District Magistrate, Panchmahal, which was registered as SARFAESI Case No.25 of 2020, wherein it is clearly indicated on page 102 of the petition compilation that the authority has issued notice granting an opportunity to the parties to

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the proceedings. In the said communication about intimation of date of hearing, the present petitioners were made a party to the said application and the process appears to have been served upon the petitioners.

3.2. It further appears from the record that pursuant to the notice having been received, the petitioners have submitted their objection/ reply to the said notice on 22.1.2021, in which the petitioners themselves have clearly indicated in last portion that they have submitted Original Application No.306 of 2020 before Debt Recovery Tribunal-II, Ahmedabad on 19.3.2020 and thereby requested to keep the proceedings in abeyance till outcome of the said Original Application. So, it transpires from the record that the petitioners are clearly aware about all the steps which are taken by the bank from beginning as well as were granted adequate opportunity, even under the proceedings under Section 14 of the Act. The said proceedings under Section 14 of the Act have been then decided by an order dated 21.1.2021 after narrating all circumstances which were produced on record by the bank and even after considering the decisions delivered by the Gujarat High Court as well as the Bombay High Court as also by considering the statutory provisions, the order came to be passed which is assailed in the present proceedings.

4. In view of the aforesaid peculiar background of facts, now, learned advocate Mr. Asthavadi appearing on behalf of the petitioners has submitted that the petitioners are not having any alternative remedy and in addition thereto, the order passed by the District Magistrate is a non-speaking order and is in violation of the principles of natural justice as no opportunity of hearing was given and as such, the same be quashed and set aside. Mr. Asthavadi has made an attempt to enter into the merit by submitting that the

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respondent No.3 has already retired from the partnership and Mr. Yogesh Alendry is now a partner of the firm and this change has already been noticed by the bank, still the petitioners have not been granted any opportunity. But, at this stage, a perusal of the record indicates that the firm was very much party to the proceedings and further more, Mr. Kevin Yogeshkumar Alendry has filed reply which is reflecting the name on behalf of M/s Kev Metallic, i.e. petitioner No.2, and as such, the Court is not in a position to accept the stand of Mr. Asthavadi that without any opportunity to the petitioners, the proceedings have been decided by the District Magistrate. In fact, prior to the impugned order dated 21.1.2021, the proceedings have already been initiated by the petitioners in the form of Original Application No.306 of 2020 dated 13.3.2020 before the DRT and the matter is at large before the Tribunal. This fact is not in dispute as it is apparently visible from the record and as such, granting of opportunity issue is not possible to be concluded in favour of the petitioners as the same is apparently clear from the record that sufficient opportunity is given and only thereafter, the order is passed.

5. So far as the submission with respect to passing of a non- reasoned order is concerned, it appears that these proceedings under Section 14 of the Act are not an adjudicatory process since the District Magistrate has not to adjudicate the merit or the claim of the petitioners and passing of a reasoned order on merit is out of place. So far as the reasons are concerned, the order itself is self- explanatory but, the said order is not only passed after granting basic opportunity to the petitioners but is passed after considering every material as required under Section 14 of the Act placed by the bank and furthermore, while exercising the discretion has relied upon the decision delivered by the Gujarat High Court in a Writ PIL, as mentioned in para 5, and about the decision delivered by the

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Bombay High Court in the case of Kotak Mahindra Bank Ltd. Therefore, this is not proper on the part of learned advocate Mr. Asthavadi to contend that no reasons are assigned by the District Magistrate. Whatever basic application of mind which is required to be undertaken by the Collector and District Magistrate while exercising the discretion under Section 14 of the Act, same is clearly visible and it is not possible for this Court to accept the submission made by learned advocate Mr. Ashthavadi.

6. In any case, even the Collector and District Magistrate in para 3 has clearly examined the material placed before him by the bank and has exercised the discretion and therefore, the said decision making process is not possible to be branded as perverse in any form nor irregular nor illegal and as such, no case is made out by the petitioners to call for any interference.

7. At this stage, no-doubt, this High Court has also clearly opined in a PIL about the scope and nature of proceedings but, even the Bombay High Court has also passed certain observations which are visible from the record and as such, the petitioners are not remedy- less and whatever permissible steps for seeking protection are available, it would be open for the petitioners. The scope and proceedings under Section 14 of the Act are well analyzed by different Courts, including our High Court, but one decision which has been brought to the notice of the Court is a decision of Punjab & Haryana High Court, wherein the Division Bench while deciding the case on 20.4.2015 has made certain observations, which are worth consideration by the Court. The said judgment is in the case of Raman Khanghura Vs. Board of Directors, Punjab and & Sind Bank and others reported in 2015 LawSuit (P&H) 1474, paragraphs 27 to 30 thereof read as under:-

[27] A Division Bench judgment of Bombay High Court reported

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as Jai Bharat Synthetic Ltd. v. SBI, 2010(3) Maharashtra Law Journal 827, held that the provision under Section 14 of the Act, does not involve any adjudicatory process and therefore, the principles of natural justice are not attracted. The order passed by the District Magistrate is to provide assistance sought by the secured creditors in accordance with law to enforce the security interest. It is a help provided by the lawful authorities by non-adjudicatory process.

[28] The Court observed as under:-

".............The said provision is intended to ensure that the proceedings initiated under Section 13(2) of the Act are carried to its logical outcome. The provision do not contemplate judicial process or work as it does not involve any adjudicatory process and as such, therefore, the principles of natural justice are not attracted. In view of the observations by the Supreme Court (in para 56) of its decision in M/s. Transcore v. Union of DALBIR SINGH 2015.04.20 17:40 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No. 1210 of 2015 (O&M) (12) India (supra), if a borrower is dispossessed unlawfully or not in accordance with the provisions of the Act, then the Debts Recovery Tribunal is entitled to put the clock back by restoring the status quo ante. Therefore, it cannot be said that if possession is taken before the confirmation of sale, the rights of the borrower to get the dispute adjudicated upon is authorised officer taking possession. In view defeated by the of the non-adjudicatory process under Section 14, it would be erroneous to say that the rights of the borrower would stand defeated without adjudication."

[29] We agree with the aforesaid view of the Bombay High Court.

We also find that in fact, the Appellate Tribunal issued the directions to the Bank to initiate action in the event the petitioner fails to pay the due amount. It is thereafter, the District Magistrate passed the impugned order. The petitioner was not taken by a surprise when such order was passed. The District Magistrate is not bound to issue notice before initiating the proceedings under Section 14 of the Act, but may choose to issue a notice as he deems fit. But failure to issue notice will not vitiate the proceedings as held by the Bombay High Court as the District Magistrate is not exercising adjudicatory process. Therefore, the proceedings under Section 14 of the Act, could not be challenged for the reason that a show cause notice was not served so as to comply with the principles of natural justice.

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[30] We also find that even if there is any ambiguity over the jurisdiction of the Tribunal to issue directions to the District Magistrate or Tehsildar; this Court, in exercise of its jurisdiction under Article 226 read with Article 227 of the Constitution, can issue directions to the District Magistrate to give effect to the statutory provisions at the instance of the Bank. Hence, the technical plea raised by the petitioner cannot be a ground to delay the recovery of the public money.

From the aforesaid circumstances which are prevailing on record, coupled with the proposition of law laid down by various decisions, as indicated above, this Court is of the opinion that no case is made out by the petitioners. It is merely an attempt to thwart the recovery proceedings of public money by the bank. Be that as it may, the order in question is not possible to be accepted as irregular and illegal in any form. That being the position, the petition deserves to be dismissed.

8. At this stage, in view of the aforesaid situation which is prevailing on record, learned advocate Mr. Asthavadi has heavily relied upon two decisions, i.e. in the case of Commissioner of Income Tax and Ors. Vs. Chhabil Dass Agarwal reported in 2013 LawSuit (SC) 711 and the judgment of the Coordinate Bench of this Court dated 3.2.2021 rendered in Special Civil Application No.1110 of 2021. These decisions whether applicable or not, the Court is mindful of the proposition on the law on precedent that if there is a slight change in the fact, even one different fact would make a world of difference in applying the principle. So, keeping in view the said proposition of law, the first judgment which is tried to be relied upon is considered by the Court, which is delivered by Hon'ble the Apex Court, as indicated above. In para 19 and 20 thereof, it has been observed in substance that when statutory authority has not acted in accordance with the provisions of the enactment or in defiance of the fundamental principles of judicial procedure or has resorted to invoke the

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provisions which are repealed, or the order has been passed in total violation of the principles of natural justice, then in that case, an aggrieved party can invoke the writ jurisdiction. The Apex Court while observing has further opined that if the remedy is ineffective or not efficacious, the High Court can exercise discretion. In view of the aforesaid discussion and the situation which is prevailing on record, it is not possible for this Court to come to a conclusion that learned advocate Mr. Asthavadi has made out any case like this, which may permit the Court to rely upon the said decision as a straitjacket formula. On the contrary, the law on the issue of statutory remedy is well propounded by the Apex Court in the decisions which are reported in (2014)1 SCC 603 and (2018)1 SCC 626 and relying upon the observations made by Hon'ble the Apex Court in relevant paragraphs, this Court is of the opinion that the judgment which has been relied by learned advocate for the petitioners i.e. in the case of Commissioner of Income Tax and Ors. Vs. Chhabil Dass Agarwal (supra) is of no assistance to the petitioners.

9. In addition to the above, the decision delivered by the Coordinate Bench of this Court, i.e. judgment dated 3.2.2021 in Special Civil Application No.1110 of 2021 (supra), is again on the proposition of non-speaking order as well as violation of the principles of natural justice and in context of alternative remedy, but the background of facts which are clearly distinct from the facts in the case on hand would not permit the Court to apply in a different factual scenario. Para 5 and 5.1 of the said decision as well as para 6.2 and 7 are clearly suggesting that there is no similarity of facts in the case on hand and as such, though in respectful agreement with the said proposition, the said judgment is not of much assistance to the petitioners and as such, looking to the scheme of the Act and the periphery of the discretion of the District

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Magistrate in the proceedings under Section 14 of the Act, this Court is of the opinion that no case is made out by the petitioners to call for any interference. Both the judgments are of no assistance to the petitioners.

10. At this stage, the Court would like to refer the decision delivered by the Coordinate Bench of this Court in the case of Sonali Sunil Bhanushali Vs. Authorized Officer HDFC Bank & 4 Ors reported in (2016) LawSuit (Guj) 464, wherein after analyzing the scheme of the Act, the Coordinate Bench has clearly propounded in para 6 that the remedy is available to the concerned person if he is aggrieved by the proceedings under Section 14 of the Act. Since this issue is by now well propounded by catena of decisions, to avoid burden of the present order, detailed observations have not been incorporated hereunder, but the observations are sufficient enough, as indicated in para 6,7 and 8 of the said decision.

11. In view of the above discussion, present petition is DISMISSED hereby with no order as to costs.

(ASHUTOSH J. SHASTRI, J) OMKAR