Bank Of Baroda Thr. Surendra Singh ... vs District Magistrate Cum ...
2021 Latest Caselaw 6183 MP

                                      1

       The High Court Of Madhya Pradesh

                             WP-11500-2020
 (BANK OF BARODA THR. SURENDRA SINGH PARIHAR S/O SHRI GOVIND SINGH PARIHAR Vs
               DISTRICT MAGISTRATE CUM COLLECTOR AND OTHERS)




Indore, Dated : 29-09-2021
      Shri Shreyas Dubey, learned counsel for the petitioner.
      Shri Vivek Dalal, learned AAG for the respondent/State.

Shri Prashant Sharma, learned counsel for respondent nos. 3 & 4. During the course of hearing, a question cropped up, i.e. whether against an order passed by District Magistrate under section 14 of the Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "the said Act"), whereby application of secured creditor / bank is dismissed, bank has any remedy of appeal under section 17 of the said Act?

2. Shri Shreyas Dubey, learned counsel for the petitioner submits that plain reading of section 17(1) of the said Act makes it clear that the secured creditor does not fall within the ambit and scope of expression "any person". Hence, Remedy of appeal is not available to present petitioner.

3. Per-contra, Shri Vivek Dalal, learned AAG opposed the said contention and submits that remedy of appeal is indeed available and this point is already considered by Single Bench in W.P No. 6131/2016 (India SME asset Reconstruction Company Ltd. Throu. Pankan Agnihotri Vs. The State of Madhya Pradesh). The said order of the Single Bench dated 18/10/2016 was unsuccessfully challenged by the secured creditor by filing W.A. No. 489/2016. The Division Bench rejected the contention of the appellant therein and therefore, it cannot be said that the remedy of appeal under section 17 of the said Act is not available to the bank.

4. Shri Prashant Sharma, learned counsel for respondent nos. 3 & 4 borrowed the same argument of Shri Vivek Dalal and urged that

remedy of appeal is available to the petitioner. He placed reliance on another Division Bench order passed in W.P. No. 15608/2020 (Rajkumar Daima Vs. IDBI Bank Ltd ) Annexure-R/29

5. Section 17 (1) of the said Act reads as under :

"[Application against measures to recover secured debts].--(1) Any person (including borrower), aggrieved by any of the measures referred to in sub- section (4) of section 13 taken by secured creditor or his authorised officer under this Chapter, [may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty five days from the date on which such measure had been taken:

[Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.] [Explanation.--For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section.] "

(Emphasis Supplied)

6. In our considered opinion, a macroscopic reading of section 17(1) makes it clear that the expression "any person" is not that wide to include secured creditor / bank, because 'any person' mentioned in this provision means any person, who is aggrieved by any of the measures referred to in Sub-section 4 of section 13 of the said Act.

7. Sub-section 4 of section 13 reads as under :

"13. Enforcement of security interest.--

(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:--

(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;

(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset:

Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt:

Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt;]

(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor;

(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt "

(Emphasis Supplied)

8. This sub-section makes it clear that if borrower fails to discharge his liability within stipulated time, certain recourses are available to the secured creditor. By no stretch of imagination, secured creditor can be aggrieved by his own action taken pursuant to sub- section 4 of section 13 of the said Act.

9. The Division Bench in WA No.489/2016 considered certain judgments of Supreme Court. In none of those judgments, the question of entertainability of an appeal u/S.17(1) of SARFAESI Act was subject matter of consideration. Pertinently, the most important expression contained in sub-section (1) of Sec.17 i.e. "any person aggrieved by any of the measures referred to in sub-section (4) of Sec.13 taken by secured creditor or his authorised officer" has not been taken into account at all. Whole emphasis and reason for delivering the judgment

in WA No.489/2016 is solely based on the use of words "any person" in sub-section (1) of Sec.17 aforesaid.

10. This is a golden rule of interpretation that every single word used in the enactment has a purpose. If language of statute is plain, simple and unambiguous it should be given effect of irrespective of its consequences. (See Nelson Motis Vs. Union of India and another (1992) 4 SCC 711 and P. Gopal Krishnan Vs. State of Kerala (2020) 9 SCC 161.

11. As on the one hand, it is not permissible to add words or to fill in a gap or lacuna, on the other hand effort should be made to give meaning to each and every word used by the Legislature. "It is not a sound principle of construction", said PATANJALI SHASTRY, C.J.I; "to brush aside words in a statute as being inapposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute"1 And as pointed out by JAGANNADHADAS,J.: "It is incumbent on the count to avoid a construction, if reasonably permissible on the language, which would render a part of the statute devoid of any meaning or application". 2 "In the interpretation of statutes", observed DAS GUPTA,J.: "the courts always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect".3 The Legislature s deemed not to waste its words

or to say anything in vain and a construction which attributes redundancy to the m Legislature will not be accepted except for compelling reasons. 5

1. Aswini Kumar Ghose Vs. Arabinda Bos, AIR 1952 SC 369, p.377; 1953 SCR 1; see further Union of India V Hansoli Devi, AIR 2002 SC 3240, p.3246: (2002) 7 SCC 273; State of Orissa Vs. Joginder Patjoshi, AIR 2004 SC 1039, p1142;; (2004) 9 SCC 278.

2. Rao Shiv Bahadur Singh v. State of UP, AIR 1953 SC 394, p397; 1953 SCR 1188

3. JK Cotton Spinning & Weaving Mills Co. Ltd V state of UP, AIR 1961 SC 1170, p.1174; (1962) 1 SCJ 417; (1961) 1 LLJ 540, Shri Mohammad Alikhan V Commissioner of Wealth Tax, AIR 1997 SC 1165, p1167; (1997) 3 SCC 511; Dilawar Babu Kurane V State of Maharashtra, AIR 2002 SC 564, p566; (2002) 2 SCC135; Ramphal Kudu V Kamal Sharma, AIR 2004 SC 1039 p.1042; (2004)9 SCC 278.

4. Quebec Railway, Light Heat and Power Co v. Vandry, AIR 1920 PC 181, p.186; 1920AC 662; See further Union of India v. Hansoli Devi, supra.

5. Ghanshyamdas v. Regional Asstt. Commr, Sales Tax, AIR 1964 SC 766, p772.

12. The Division Bench of Punjab & Haryana High Court in its recent judgment in the matter of Kotak Mahindra Bank Ltd. Vs. District Magistrate and another 2021 SCC Online P&H 763 opined as under:-

"24. A perusal of the above would show that any person which includes a borrower, who is aggrieved by any of the measures taken by the secured creditor or his authorized officer referred to in sub-section 4 of Section 13 of the SARFAESI Act under the Chapter, can make an application under Section 17 of the SARFAESI Act. The language itself makes in amply clear that the remedy is available to a person aggrieved by any of the measures referred in sub-section 4 of Section 13 of the SARFAESI Act, which are taken by the secured creditor or his authorized officer. The remedy, therefore, under Section 17 of the SARFAESI Act, would not be available to the secured creditor or his authorized officer for rejection of an application preferred by the said secured creditor or his authorized person under the SARFAESI Act.

25. In the light of the above, the order which has been passed by the District Magistrate under Section 14 of the SARFAESI Act is final qua the 14 of 24 petitioner and under these circumstances, the remedy available to the petitioner is only under Article 226/227 of the Constitution of India, which remedy the petitioner has rightly availed of. Reliance on the judgment of the Hon'ble Supreme Court in Kaniyalal Lalchand Sachdev and others' case (supra) by the counsel for respondent No.2 is totally misplaced, where the Hon'ble Supreme Court was considering Section 17 of the SARFAESI Act when the person aggrieved was neither the secured creditor nor the authorized officer but any other person. The said judgment, therefore, would not be attracted to the present case."

(emphasis supplied)

13. In view of foregoing analysis, we respectfully differ with the view taken by previous benches and accordingly request Hon'ble The Chief Justice to constitute a larger bench to decide following questions:-

[i] Whether remedy of appeal under section 17(1) of the Secularization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is available to the secured creditor against

an order passed by the District Magistrate under section 14 of the said Act ?.

[ii] Whether in judgment/order passed in WA No.489/2016 and WP No.15608/2020, the division benches have correctly interpreted Sec.17(1) of the said Act and whether the said judgments can be said to be good law ?.

14. Registry of this Court shall place this order before Hon'ble the Chief Justice for consideration.

           (SUJOY PAUL )                           ( ANIL VERMA)
             JUDGE                                     JUDGE

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     Digitally signed by
     VARGHESE MATHEW
     Date: 2021.09.30
     14:19:09 -07'00'