Snehal @ Sneha Prakashbhai Shah ... vs Bank Of India
2021 Latest Caselaw 16600 Guj

    C/SCA/13503/2021                                    ORDER DATED: 22/10/2021




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            R/SPECIAL CIVIL APPLICATION NO. 13503 of 2021

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       SNEHAL @ SNEHA PRAKASHBHAI SHAH D/O JAYANTILAL
                     GULABCHAND SHAH
                          Versus
                       BANK OF INDIA
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Appearance:
MR JAL UNWALLA, SENIOR ADVOCATE WITH MS TEJAL A VASHI(2704)
for the Petitioner(s) No. 1
 for the Respondent(s) No. 2
MR RASHESH S SANJANWALA, SENIOR ADVOCATE WITH MR KM
PARIKH(575) for the Respondent(s) No. 1
MS AB CHATURVEDI(5419) for the Respondent(s) No. 8
NOTICE SERVED BY DS(5) for the Respondent(s) No. 3,4,5,6,7
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 CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                                Date : 22/10/2021

                                 ORAL ORDER

1. Heard learned Senior Advocate Mr. Jal Unwalla assisted by learned advocate Ms. Tejal A. Vashi for the petitioner and learned advocate Mr. Rashesh S. Sanjanwala assisted by learned advocate Mr. Ketan Parikh for the respondent no.1.

2. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs :

"4. The petitioner therefore, prays that:-

C/SCA/13503/2021 ORDER DATED: 22/10/2021

A. This Honourable Court may be pleased to issue any appropriate writ, Order or direction to quash and set aside the impugned judgement dated 07.07.2021 in Securitization Application no. 323 of 2020 before the Ld. Debt Recovery Tribunal - II, Ahmedabad at Annexure - A to this petition.

B. This Honourable Court may be pleased to further issue any appropriate writ, Order or direction to hold and declare that the petitioner has locus standi and has the right to be heard and for her grievance to be decided as per the provisions of section 17 of the SARFAESI Act.

C. Pending hearing and final disposal of this writ petition, this Honourable Court may be pleased to stay the impugned judgement dated 07.07.2021 passed by the Ld. DRT-II, Ahmedabad in Securitization Application no. 323 of 2020 and further be pleased to stay the to stay the notice dated 14.11.2011 issued under section 13(2) of the SARFAESI Act, symbolic possession notice dated 13.09.2012 and to restrain the Respondent no.1 & Respondent no.2 bank from taking actual possession of the said mortgaged property/secured asset.

D. Grant such other and further relief/s as may be deemed fit and proper in the interest of justice."

3. It is the case of the petitioner that the

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petitioner has coparcenary share in the properties mortgaged by respondent nos. 5 to 7 with respondent nos. 1 and 2 for availing financial assistance for respondent no.3. The petitioner and respondents no. 5 to 7 are real sister and brothers.

4. It is the case of the petitioner that the petitioner has filed Special Civil Suit No. 219/2015 and Regular Civil Suit No. 57/2013 before the Vapi Court which are pending for adjudication.

5. It appears that respondent nos. 5 to 7 did not pay the outstanding dues of respondent nos. 1 and 2 banks and accordingly respondents-banks initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(For short "the SARFAESI Act"). The petitioner made an application under section 17 of the SARFAESI Act challenging the action of the respondents- banks before the Debts Recovery Tribunal (DRT) on the ground that the petitioner is also aggrieved by the measures taken by the respondents-banks as the petitioner has claimed for share in the property which is mortgaged with the respondents-banks.

6. The Debts Recovery Tribunal by judgment and

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order dated 7th July, 2021 passed in Securitization Application No. 323/2020 held that the petitioner has no locus standi to file the Securitization Application and such application is not maintainable under section 17 of the SARFAESI Act as the petitioner is neither borrower nor guarantor with regard to the financial assistance provided by the respondents banks. Therefore, only on the grounds of filing civil suits and the pendency of the determination of civil rights with respect to property in question, the petitioner does not have locus standi to file Securitization Application as the jurisdiction of the Tribunal is barred to decide the civil rights claimed by the petitioner before the competent Civil Courts.

7. Learned Senior Advocate Mr. Jal Unwalla submitted that as per section 17 of the SARFAESI Act, any person who is aggrieved by the measures taken by the secured creditors can file an application challenging such action. It was further submitted that as the petitioner is having coparcenary right in the property in question which is admittedly an ancestral property, mortgaged by the brothers of the petitioner with the respondents- banks on the basis of alleged sale deed executed in 1995 by the father of the petitioner in favour of respondent nos.5 to 7 which is the

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subject matter of civil suits, the petitioner is aggrieved by the measures taken by respondents-banks and therefore, Securitization Application would be maintainable and the petitioner would have locus standi to prefer such Securitization Application challenging the action of respondents-banks under the SARFAESI Act.

8. On the other hand, learned Senior Advocate Mr. Rashesh Sanjanwala for respondent no.1- bank submitted that the submissions made on behalf of the petitioner is like putting a cart before the horse because the challenge to the action taken by the respondents-banks is on the basis of the Civil Suits filed by the petitioner before the Civil Courts claiming right in the property which is already mortgaged with the respondents-banks.

9. Learned Senior Advocate Mr. Sanjanwala submitted that respondent nos. 5 to 7 also preferred Securitization Application No. 337/2020 which is allowed by the Tribunal by setting aside the auction sale notice dated 8th September, 2020 as well as auction held on 14th October, 2020 for the sale of property in question and the respondents-banks have challenged the said order before the Debts Recovery Appellate Tribunal under section 18 of the SARFAESI Act.

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10. In view of the above, without entering into the merits of the matter and without entertaining the petition at this stage, it would be in the interest of justice to relegate the petitioner to file appropriate appeal under section 18 of the SARFAESI Act raising all the contentions which are raised before this Court and the Debts Recovery Appellate Tribunal shall consider such contentions raised by the petitioner and the respondents-banks in accordance with law along with the appeal preferred by the respondents- banks challenging judgment and order passed in Securitization Application No.337/2020.

11. The Debts Recovery Appellate Tribunal shall also consider to condone the delay, if any, which may occur in preferring such appeal by the petitioner as the petitioner has approached this Court by challenging the order passed by the DRT under Article 226 of the Constitution of India.

12. At this juncture, it may be noted that this Court could have entertained this petition under Article 226 of the Constitution of India in view of the decision of the Apex Court in case of The Assistant Commissioner of State Tax and others v. M/s.

C/SCA/13503/2021 ORDER DATED: 22/10/2021

Commercial Steel Limited (judgment dated 3rd September, 2021 in Civil Appeal No.5121/2021), however, when the respondents- banks have already filed an appeal before the Debts Recovery Appellate Tribunal against the Securitization Application No. 337/2020, it would be in the interest of justice, if the petitioner is also relegated to the jurisdiction of Appellate Tribunal to consider the aspects and contentions raised by the petitioner in this petition and adjudicate the same in accordance with law.

13. For the foregoing reasons, the petition is disposed of. Notice is discharged.

(BHARGAV D. KARIA, J) RAGHUNATH R NAIR