Jharkhand High Court

Siddik Khan vs Bank Of India on 28 February, 2023

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    IN THE HIGH COURT OF JHARKHAND AT RANCHI
               W.P.(C) No. 935 of 2023

1. Siddik Khan
2. Mosafir Khan @ Sekh Mosafir
3. Mukhtar Khan @ Md. Mokhtar
4. After Khan @ Md. Aftar Khan
5. Sajiya Khatoon
6. Najiya Khatoon                          ...     ...      Petitioners
                                Versus
1. Bank of India, through its Zonal Head, Zonal Office, Ranchi
2. The Branch Manager, Bank of India, Ratu Road Branch, Ranchi
3. Shekh Naseem
4. Shekh Naeem
5. Shekh Nasir
6. Naseema Khatoon
7. Naeema Khatoon
8. Fatma Khatoon
9. Md. Shamsher Ansari
10. Mukesh Kujur
11. Vilok Kumar Gupta
12. Mannan Khan
13. Aman Khan
14. Kaman Khan
15. Jama Khan
16. Abdul Khan
17. Amir Khan
18. Tara Parween                           ...     ...      Respondents
CORAM: HON'BLE MR. JUSTICE RAJESH SHANKAR
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For the Petitioners : Mr. Dilip Kumar Chakraverty, Advocate For the Respondent-BoI : Mr. Abdul Allam, Sr. Advocate Mr. A.K. Sahay, Advocate

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Order No. 02 Dated: 28.02.2023

The present writ petition has been filed for issuance of direction upon the concerned respondents to withhold the auction notice dated 18.01.2023 published in daily newspaper „The Times of India‟ on 19.01.2023 (Annexure-5 to the writ petition) for e-auction sale of the mortgaged properties under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act, 2002") (date & time of e-auction sale mentioned in the said notice is 27.02.2023 from 11.00 am to 5.00 pm) till disposal of Original Suit No. 327 of 2018, pending before the learned Civil Judge (Senior Division)-I, Ranchi which has been filed by the petitioners against the respondent

nos. 3 to 9 and 11 for cancellation of registered Sale Deed No. 3710 dated 14.07.2016, Deed No. 4545 dated 20.09.2017 and Deed No. 4577 dated 22.09.2017, which have fraudulently been executed by the father of the respondent nos. 3 to 7 namely, Late Sk. Abdul Latif (Original Defendant No. 1) in favour of the respondent nos. 8 and 11.

2. The main submission of learned counsel for the petitioners is that the land in question has fraudulently been sold by Sk. Abdul Latif to the respondent no. 8 - Fatma Khatoon and the respondent no. 11 - Vilok Kumar Gupta. The petitioners have filed Original Suit No. 327 of 2018 against the respondent nos. 3 to 9 and 11 seeking cancellation of the registered Sale Deed No. 3710 dated 14.07.2016, Deed No. 4545 dated 20.09.2017 and Deed No. 4577 dated 22.09.2017. The petitioners have filed the present writ petition primarily for the reason that the respondent-Bank has published e-auction notice on 18.01.2023 putting the property relating to sale deed nos. 4545 and 4577 to e-auction sale. It is further submitted that if the concerned e-auction sale is not stayed or the respondent- Bank is not restrained from handing over the property in question to the successful auction purchaser, irreparable loss and injury will be caused to the petitioners.

3. Mr. Abdul Allam, learned Senior Counsel appearing for the respondent-Bank, submits that the present writ petition filed by the petitioners itself is not maintainable as the petitioners have the efficacious remedy of preferring application in this regard before the Debts Recovery Tribunal, Ranchi under Section 17 of the Act, 2002. The respondent-Bank has put the property to e-auction sale by following the due process of law including issuance of demand notice under Section 13(2) as well as taking symbolic possession of the property under Section 13(4) of the Act, 2002. Moreover, since the Original Suit No. 327 of 2018 relating to the property in question was filed by the petitioners in the year 2018 itself, they should have sought interim injunction before the concerned court to prevent accrual of third party right over the said property. The petitioners by filing the present writ petition has in fact given rise to a parallel proceeding and, therefore, the same may not be entertained. It is

further submitted that the auction sale of the property in question has already been completed on 27.02.2023.

4. Heard learned counsel for the parties and perused the materials available on record. The Hon‟ble Supreme Court in the case of "United Bank of India Vs. Satyawati Tondon & Ors." reported in (2010) 8 SCC 110, has held as under:

"42. There is another reason why the impugned order should be set aside. If Respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression "any person" used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective."

5. Further, in the case of "Standard Charted Bank Vs. V. Noble Kumar & Ors." reported in (2013) 9 SCC 620, the Hon‟ble Apex Court has held as under:

"27. The "appeal" under Section 17 is available to the borrower against any measure taken under Section 13(4). Taking possession of the secured asset is only one of the measures that can be taken by the secured creditor. Depending upon the nature of the secured asset and the terms and conditions of the security agreement, measures other than taking the possession of the secured asset are possible under Section 13(4). Alienating the asset either by lease or sale, etc. and appointing a person to manage the secured asset are some of those possible measures. On the other hand, Section 14 authorises the Magistrate only to take possession of the property and forward the asset along with the connected documents to the borrower (sic the secured creditor). Therefore, the borrower is always entitled to prefer an "appeal" under Section 17 after the possession of the secured asset is handed over to the secured creditor. Section 13(4)(a) declares that the secured creditor may take possession of the secured assets. It does not specify whether such a possession is to be obtained directly by the secured creditor or by resorting to the procedure under Section 14. We are of the opinion that by whatever manner the secured

creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 17 is available."

6. So far as the issue of invoking the writ jurisdiction in the matters of realization of loan by the financial institutions is concerned, the Hon‟ble Supreme Court in the case of "Authorized Officer, State Bank of Travancore & Anr. Vs. Mathew K.C." reported in (2018) 3 SCC 85, while considering the earlier judicial pronouncements made in this regard, has held as under:

"16. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex-parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in Satyawati Tandon (supra), has also not been kept in mind before passing the impugned interim order:-

"46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v.

Antarim Zila Parishad, Whirlpool Corpn. v.Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order."

17. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference."

7. The petitioners are not the borrower/guarantor of the loan in question, rather their contention is that the property in question over which they have the legitimate right and title, was fraudulently sold by their co-sharer i.e., Sk. Abdul Latif (father of the respondent nos. 3 to 7). Hence, they are the persons affected with the steps being taken by the respondent-Bank in putting the property to auction sale which was kept as equitable mortgage by the borrower/guarantor before the bank while taking the loan. They can therefore be termed as "any person" used in Section 17(1) of the Act, 2002.

8. In view of the aforesaid discussion, this Court is not inclined to entertain the writ petition on merit. The petitioners are, however, at liberty to prefer an application under Section 17 of the Act, 2002 with respect to the steps taken by the bank in putting the property in question to auction sale for realization of the outstanding loan amount of the borrower.