Madhya Pradesh High Court
Poonawalla Housing Finance Ltd. ... vs Raju Haidari on 13 June, 2023
Author: Rohit Arya
(1)
IN THE HIGH COURT OF MADHYA
PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE ROHIT ARYA
&
HON'BLE SHRI JUSTICE SANJEEV S KALGAONKAR
ON THE 13th OF JUNE, 2023
MISC. PETITION NO. 485 of 2023
BETWEEN :-
POONAWALLA HOUSING FINANCE
LIMITED (PREVIOUSLY KNOWN AS
MAGMA HOUSING FINANCE
LIMITED)
HAVING ITS REGISTERED OFFICE
AT 602, 6TH FLOOR, ZERO ONE IT
PARK, SURVEY NUMBER 79/1,
GHORPADI, MUNDHWA ROAD, PUNE
(MAHARASHTRA) 411036
HAVING BRANCH OFFICE AT 4TH
FLOOR, ALAKNANDA TOWER, IN
FRONT OF AIRTEL OFFICE, CITY
CENTER, GWALIOR, (MP)
THROUGH ITS AUTHORISED
OFFICER DEVENDRA PAL, S/O SHRI
RAMSHREE PAL, AGE - 36 YEARS,
OCCUPATION - LEGAL MANAGER
IN POONAWALLA HOUSING
FINANCE LIMITED, OFFICE AT
METRO TOWER, VIJAYA NAGAR,
INDORE (MP).
.....PETITIONER
(SHRI VIVEK JAIN & SHRI AJAY SHARMA - ADVOCATE)
(2)
AND
1. RAJU HAIDARI S/O SHRI
KUDRAT ALI, R/O RAHMAT
NAGAR, GHOSIPURA STATION,
DRP LINE, LASHKAR,
GWALIOR (MP).
2. RAJU BREWERIES SHIV
NAGAR, IN FRONT OF
CRASHER COLONY,
GHOSIPURA STATION,
GWALIOR (MP).
3. SMT. MENU HAIDARI W/O
RAJU HAIDARI R/O RAMHMAT
NAGAR, GHOSIPURA STATION,
DRP LINE, LASHKAR,
GWALIOR (MP).
.....RESPONDENTS
(NONE FOR THE RESPONDENTS)
-------------------------------------------------------------------------------
This Misc. Petition coming on for admission this day,
JUSTICE ROHIT ARYA passed the following:
ORDER
This Misc.Petition filed under Article 227 of the
Constitution of India arise out of the impugned order dated dated
16.11.2022 (Annexure P/2) passed by the learned Chief Judicial
Magistrate, Gwalior, in the proceeding initiated by the petitioner
under Section 14 of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
(hereinafter shall be referred to as the SARFAESI Act).
2. Brief facts relevant for disposal of this Mis. Petition are to
the effect :
(a) Petitioner financial institution invoked Section 13 (2) of the
SARFAESI Act for recovery of the outstanding dues against
private respondents due to default in repayment of debts.
Thereafter invoking Section 34 of the SARFAESI Act, the
petitioner made efforts to take possession of the properties
mortgaged for realisation of the debt.
(b) Having failed to take possession, the petitioner approached
the Chief Judicial Magistrate under Section 14 of the SARFAESI
Act.
(c) The Chief Judicial Magistrate declined to invoke his
jurisdiction under Section 14 of the SARFAESI Act for physical
possession of the properties named in the application purportedly
for the reason the petitioner failed to prove service of notice upon
the private respondents/borrowers as contemplated under Section
13 (2) of the SARFAESI Act read with Rule 3 of the Security
Interest (Enforcement) Rules, 2002 (hereinafter referred to as the
Rules, inasmuch as the petitioner did not produce the dispatch
register to show the number by which notices were issued and
received by the borrowers. The CJM sought to justify the
aforesaid reasoning with the judgment of the Bombay High Court
in the case of International Asset Reconstruction Company
Pvt. Ltd Vs. Union of India and others reported in AIR 2011
Bombay 163.
3. Shri Vivek Jain with Shri Ajay Sharma, learned counsel for
the petitioner while taking exception to the impugned order
submits that the CJM has misdirected himself in the matter of
exercise of jurisdiction under Section 14 of the SARFAESI Act as
well as failed to consider the requirement of issue of demand
notice as contemplated under Section 13 (2) of the SARFAESI
Act read with Rule 3 of the Rules. Further elaborating his
submissions, learned counsel submits that requirement of Rule 3
of the Rules in the context of demand notice as referred to in sub
section (2) of section 13 is to place on record the evidence of
delivery including hand delivery or transmission of notice at the
place where the borrower or his agent, empowered to accept the
notice or documents on behalf of the borrower etc. In the instant
case, notices to each of the borrowers have been separately issued
by the speed post. A copy of the notices is annexed as Annexure
P/6 at page 87 of the petition. Besides, the envelop containing the
said notices bore separate docket number and date of dispatch, the
details of which are quoted below :-
RAJU S/D/W of KUDRAT ALI SAR- 28th May 22 Notice dt. RW 942156207IN
HADARY RAHAMAT NAGAR 2882 25.05.22
GOSIPURA STESHAN
DRP LAEEN
LASHKAR MADHYA
PRADESH 474012
RAJU SURVEY NO.365,367, SAR- 28th May 22 Notice dt. RW 942156198IN
HADARY 369 WARD NO.38, 2882 25.05.22
VILLAGE KOTA
LASHKAR GWALIOR
GWALIOR PIN 474012
RAJU S/D/W of SHIV NAGAR SAR- 28th May 22 Notice dt. RW 942156184IN
BEVERAGE OPP KRESHAR 2882 25.05.22
COLONY GHOSIPURA
GWALIOR 474012
MEENU S/D/W OF RAJU SAR- 28th May 22 Notice dt. RW 942156175IN
HAIDERI HAIDERI RAHMAT 2882 25.05.22
NAGAR GOSIPURA
STESHAN DRP LAEEN
LASHKAR MADHYA
PRADESH 474012
4. That apart, from page 94 to 97 of the Misc. Petition, the
postal track details of each of the noticees supplied by the
department of Post, Ministry of Communications, Government of
India, clearly indicate that each of the noticees was served with
the notice. These documents were annexed alongwith the
application filed under Section 14 of the SARFAESI Act before
the CJM. The CJM ignored these documents and curiously
justified the impugned order with the reason that dispatch register
of issue and service of notice upon the respondents borrowers
were not produced.
5. Learned counsel submits that the CJM did not act in
accordance with law while exercising jurisdiction under Section
14 of the SARFAESI Act as he had altogether ignored the
requirement of Rule 3 of the Rules and the conclusive evidence
produced (discussed above) regarding dispatch and service of
notice upon the borrowers. As a result, it is a case of refusal to
exercise jurisdiction in an arbitrary and illegal manner. Therefore,
this Court may invoke supervisory jurisdiction under Article 227
of the Constitution of India to set aside the impugned order and
direct the CJM to proceed with the application filed under Section
14 of the SARFAESI Act.
6. Despite service of notice to the respondents through the
court and by Dasti, none of them have entered appearance either
in person or through advocate. Under such circumstances, this
Court deems fit to proceed with the case and dispose of the instant
Misc. Petition.
7. The SARFAESI Act has been enacted to facilitate banks
and financial institutions to take possession of securities and to
sell them without interventions of the courts as the past
experience showed that the existing legal framework related to
commercial transactions had not kept pace with the changing
commercial practices and financial sector reforms. This had
resulted in slow place of recovery of defaulting loans and
mounting levels of non-performing assets of banks and financial
institutions. The banks and financial institutions unlike
international banks did not have power to take possession of the
securities and sell them for want of legal provisions. As such, the
scheme of the Act is to empower the banks and financial
institutions to sell the non performing assets and realise the bank
dues outstanding to the credit of the borrowers.
8. Section 14 incorporated in the SARFAESI Act appears to
be with an intention to ensure and facilitate physical possession of
such non performing assets and other mortgaged properties of the
defaulting borrowers, where bank and financial institutions failed
to take possession of such assets as provided for under Section 13
(4) of the SARFAESI Act.
9. The authorities prescribed under Section 14 of the
SARFAESI Act are required to act diligently and promptly in the
matter of taking possession of non performing assets or
mortgaged property, for which application is filed by the secured
creditors; indeed, the prescribed authority is required to ensure
that requirement of service of demand notice is substantially
complied with.
10. In the instant case, the evidence placed on record (supra) do
prove the fact about dispatch of notice to each of the
borrowers/respondents through speed post. The track of each
article after dispatch has also been shown to have served upon the
addressee with the proof thereof. Under such circumstances, the
CJM ought to have appreciated that the requirement of the
aforesaid provisions of law is fully complied with. The reasoning
of the impugned order to the effect that the register of dispatch
and receipt is not produced in our considered opinion is misrably
misdirected and upon misconception of the requirement of law
without considering the evidence in that behalf produced.
11. Consequently, the impugned order dated 16.11.2022
(Annexure P/2) since is polluted with illegality tantamounting to
improper exercise of jurisdiction is hereby quashed with the
further direction to the CJM to proceed with the application filed
under Section 14 of the SARFAESI Act on merits.
With the aforesaid, Misc. petition stands disposed of.
(ROHIT ARYA) (SANJEEV S KALGAONKAR)
JUDGE JUDGE
SP
SANJEEV
KUMAR PHANSE
2023.06.14
10:31:26 +05'30'
