Magma Housing Finance Limited vs The State Of Madhya Pradesh
2021 Latest Caselaw 6204 MP

HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE

                      W.P.No.20767/2021
     Magma Housing Finance Limited Vs. State of M.P and others
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INDORE, Dated :29/9/2021
        Shri Rohit R.Saboo, learned counsel for the petitioner.
        Shri Vivek Dalal, learned Additional Advocate General for the
respondent/State.

With consent of learned counsel for the parties, the matter is heard finally.

1. Learned counsel for the petitioner at the outset submits that the impugned order dated 4.8.2021 (Annexure P-3) is bad in law and point involved in this case is recently considered and decided by this Court in W.P.No.11069/2021 (AU SMALL FINANCE BANK LIMITED THR ITS AUTHORISED SIGNATORY MR. DHIRENDRA SONKAR VS. STATE OF MADHYA PRADESH AND OTHERS) order dated 29.6.2021. Thus, this matter may be disposed of in terms of the said order.

2. The legal submission raised by Shri Saboo,learned counsel for the petitioner is not disputed by Shri Vivek Dalal, learned Additional Advocate General.

This Court in W.P.No.11069/2021 held as under:- "7. This Court in recent order passed in Aspire Home Finance (supra) opined as under -

Relevant portion of Sec.31 reads as under:- "31. Provisions of this Act not to apply in certain cases.-- The provisions of this Act shall not apply to-

(g) [any properties not liable to attachment (excluding the properties specifically charged with the debt recoverable under this Act)] or sale under the first proviso to sub-section (1) of section 60 of the Code of Civil Procedure, 1908 (5 of 1908);

(emphasis supplied)

9. A plain reading of this provision shows that argument of learned counsel for petitioners has substance. The legislature in its wisdom decided toexclude the properties which are specifically charged with the debt recoverable under the Act.

The provision is clear and unambiguous which HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE

W.P.No.20767/2021 Magma Housing Finance Limited Vs. State of M.P and others

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makes it clear that provision of the Act is inapplicable relating to such properties which are not liable to attachment excluding the properties specifically charged with debt recoverable under this Act namely Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The learned Addl. District Magistrate in fact read the provision in such a way where word "excluding" is understood or read by him as "including" which resulted into a conclusion that a residential property is outside the purview of the Act whereas Clause (g) shows otherwise. Pertinently in the instant matter, we are concerned with a property which was admittedly mortgaged and description of which is covered by the expression which finds place in Clause

(g) of Sec.31. In this matter, we are not concerned with the property which is not liable to the attachment as per sub-section (1) of Section 60 and, therefore, we are not required to deal with the said aspect.

10 Considering the aforesaid, order dated 26/8/2020 and 19/8/2020 impugned in both the cases are set aside. The matters are restored in the file of learned Addl. District Magistrate who will consider and pass appropriate orders in consonance with Sec.14 of the Act. It is made clear that this Court has not expressed any opinion on the merits of this matter."

8 The first point raised by Shri Saboo stands concluded. We have no hesitation to hold that the Additional District Magistrate has erred in understanding and reading section 31(g) of the Act. In the scheme of the Act, such residential accommodations are not beyond the purview of the Act.

9 Secondly,as per the principle laid down in the judgment passed in Cholamandhalam Investment and Finance Ltd (supra), no adjudication by Additional District Magistrate was permissible. It was not open to learned Additional District Magistrate to hold that initiation of NPA proceedings against only one borrower is bad in law.

10 Considering the aforesaid, the impugned orders dated 12/10/2020 ( Annexure-P/3) and 19/08/2020 ( Annexure-P/3) respectively in both the petitions are set aside. The matters are restored in the file of learned Additional District Magistrate, who will proceed in accordance with law and pass appropriate orders in HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE

W.P.No.20767/2021 Magma Housing Finance Limited Vs. State of M.P and others

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accordance with law. It is made clear that this Court has not expressed any opinion on the merits of this matter.

C c as per rules."

3. As noticed above, the parties have not disputed that the principle laid down by this Court in the aforesaid case is squarely applicable against the impugned order.

4. Resultantly, for the reasons stated in the said order, the impugned order dated 4.8.2021 is set aside. The matter is restored in the file of learned Additional District Magistrate with a direction to proceed in accordance with law and pass orders as per law as expeditiously as possible.

5. The petition is disposed of without expressing any opinion on merits of the case.

              (SUJOY PAUL)                                (ANIL VERMA)
                  JUDGE                                       JUDGE


                 REENA PARTHO
das
                 SARKAR
                 2021.09.29
                 04:15:30 -07'00'