Poonam Prasad vs The State Of Jharkhand
2024 Latest Caselaw 9968 Jhar

Jharkhand High Court

Poonam Prasad vs The State Of Jharkhand on 16 October, 2024

Author: Rajesh Shankar

Bench: Rajesh Shankar

                   IN THE HIGH COURT OF JHARKHAND AT RANCHI
                                   W.P.(C) No. 4666 of 2024
            1. Poonam Prasad
            2. Bhaskar Kumar Prasad                                       ..... Petitioners
                                            Versus
            1. The State of Jharkhand, through the Deputy Commissioner, Ranchi
            2. Bank of India, through its Zonal Manager, Ranchi Zone, Ranchi
            3. Authorized Officer, Bank of India, Zonal Office, Ranchi Zone, Ranchi
            4. Branch Manager, Bank of India, Pandra Branch, Hehal, Ranchi
                                                                          ..... Respondents
                                             -----

CORAM HON'BLE MR. JUSTICE RAJESH SHANKAR

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            For the Petitioners:        Mr. Saurabh Shekhar
            For Respondent No.1:        Ms. Nirupama, A.C to Sr. S.C-II
            For Respondent Nos.2-4: Mr. Debopriyo Pal
                                             -----


03/16.10.2024     The present writ petition has been filed for issuance of direction upon the

respondent No.1 to take final decision on the petitioners' representation dated

10.03.2023. Further prayer has been made for issuance of direction upon the

respondent-Bank not to auction the joint property owned by the petitioners

without effecting partition by metes and bounds as well as to cancel e-auction

sale of their property i.e. the land and building situated at Khata No. 19, Plot

No. 69, Sub-Plot Nos. 69/A & 69/B-C, Mouza-Madhukam, Thana No. 204, P.S-

Sukhdeonagar, District-Ranchi, measuring an area of 2 Katthas and 4 Katthas, 8

Chhataks & 28.5 sq. ft respectively (total 10.81 Decimals) purchased vide

registered sale deed Nos. 12080/11330 dated 23.12.1986 & 90/88 dated

04.01.1988 respectively in the name of Smt. Kanchan Prasad.

2. The petitioners have also preferred I.A. No. 10431/2024 seeking stay of

subsequent e-auction sale notice of the property in question scheduled to be

held on 25.10.2024.

3. Learned counsel for the petitioners submits that the petitioners are the

co-sharers of the property in question which has been put to e-auction sale

scheduled to be held on 25.10.2024 by the respondent-Bank. It is further

submitted that for the first time the petitioners came to know from the notice

published in the newspaper 'Prabaht Khabar' dated 28.02.2023 that the property

in question had been mortgaged by their co-sharers Subodh Prasad, Rishav

Prasad, Mrs. Kanchan Prasad and Mrs. Khyati Prasad before the respondent-

Bank and the same was accepted as mortgage by the Bank without physical

verification as to under whose possession the said property belonged. The

petitioners having come to know about mortgage of the said property, raised

objection before the respondent No.1 stating inter alia that the petitioner No.1

had lawfully acquired the adjacent property forming part of R. S. Plot No. 69,

Sub-Plot Nos. 69/D2 & 69/D E C measuring an area of 1 Kathha 15 Chhataks

and 4 Katthas 8 Chhataks 28.5 sq. ft. respectively through two registered sale

deeds dated 05.01.1987 & 04.01.1988 and she had been paying municipal tax

for the same.

4. It is further submitted that the husband of the portioner No.1, namely,

Binod Kumar Prasad and the husband of Smt. Kanchan Prasad, namely, Subodh

Kumar Prasad are the siblings. The land in question was purchased by the joint

family and a building was constructed over the entire area of land amalgamating

the plots purchased by the petitioner No.1. One of the borrowers, namely, Smt.

Kanchan Prasad is neither in exclusive possession/has any independent right

over the said property nor the respondent-Bank verified the physical possession

as well as carried out demarcation of the said property before mortgaging the

same. The said property should have been properly partitioned and demarcated

before being accepted as equitable mortgage. The mortgage was accepted

without following the provisions of the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter

referred to as 'the SARFAESI Act, 2002'). Moreover, the structure of the building

constructed over the entire area i.e. about 20 Decimals is such which cannot be

divided into two parts. Under the said compelling circumstance, the petitioners

have preferred the present writ petition.

5. As against this, learned counsel for the respondent Nos. 2 to 4 submits

that the petitioners themselves have stated in paragraph 5 of the present writ

petition that they came to know about the fact that the borrowers, namely,

Subodh Prasad, Rishav Prasad, Mrs. Kanchan Prasad and Mrs. Khyati Prasad had

mortgaged the said property with the respondent-Bank after publication of

notice in the newspaper 'Prabhat Khabar' on 28.02.2023. Moreover, the notice

under Section 13(4) of the SARFAESI Act, 2002 was already issued by the

respondent-Bank on 02.11.2022. If the petitioners were aggrieved with the

action being taken by the respondent-Bank, they should have preferred an

appropriate application under Section 17(1) of the SARFAESI Act, 2002 before

the Debts Recovery Tribunal, Ranchi. However, instead of taking the said

recourse, the petitioners have preferred the present writ petition invoking Article

226 of the Constitution of India that too at much belated stage.

6. Heard learned counsel for the parties.

7. The main submission of learned counsel for the parties is that the nature

of construction of the building over the land which was put as equitable

mortgage by the borrowers is such which cannot be separated into two parts so

as to put it to auction-sale for realisation of the outstanding loan amount and if

at all the mortgaged property is auction-sold to any third party, taking

possession of the said part of the property will almost be impossible.

8. The said submission of learned counsel for the petitioners is completely

factual in nature whereas the submission made by learned counsel for the

respondent Nos. 2 to 4 has substance that if the petitioners were aggrieved with

the action being taken by the respondent-Bank with respect to landed property

in question mortgaged by the borrowers, they should have preferred an

appropriate application under Section 17(1) of the SARFAESI Act, 2002 putting

forth their objection before the Debts Recovery Tribunal, Ranchi.

9. 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."

10. It is thus evident from the aforesaid judgment that the expression "any

person" used in Section 17(1) of the SARFAESI Act, 2002 is of wide implication

and the same includes 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 of the SARFAESI Act, 2002. Thus, the Debts Recovery Tribunal (DRT)

or the Debts Recovery Appellate Tribunal (DRAT) are duly empowered to

entertain the application/appeal filed under Section 17 and 18 of the SARFAESI

Act, 2002 respectively including passing of the interim orders and to decide the

dispute within a fixed period. It has thus been settled that the remedy under

Section 17 of the SARFAESI Act, 2002 is available to any aggrieved person.

11. Further, the Hon'ble Supreme Court in the case of "Standard Charted

Bank Vs. V. Noble Kumar & Ors." reported in (2013) 9 SCC 620, 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 3 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."

12. So far as invoking the writ jurisdiction in the matter of realization of loan

by the financial institution/secured creditors are 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 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 4 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."

13. Under the said circumstance and keeping in view the law laid by the

Hon'ble Supreme Court in the aforesaid cases, the petitioners can be termed as

'any person' within the meaning of Section 17(1) of the SARFAESI Act, 2002 and

they have an efficacious/statutory remedy provided under the said Act. Hence, I

am not inclined to entertain the present writ petition at this stage and the same

is accordingly dismissed as not maintainable.

14. The petitioners are however at liberty to take appropriate recourse in this

regard under the provisions of the Act, 2002 before the Debts Recovery

Tribunal, Ranchi.

15. Consequently, I.A. Nos. 9658/2024 & 10431/2024 also stand dismissed.

Satish/-                                              (RAJESH SHANKAR, J)