Madhya Pradesh High Court
Pnb Housing Finance Ltd. Through ... vs The State Of Madhya Pradesh on 16 October, 2023
Author: Sushrut Arvind Dharmadhikari
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 16 th OF OCTOBER, 2023
WRIT PETITION No. 25191 of 2023
BETWEEN:-
PNB HOUSING FINANCE LTD. THROUGH AUTHORISED
OFFICER SHRI GAURAV SHARMA S/O SHRI
VEDPRAKASHSHARMA, AGED ABOUT 38 YEARS,
OCCUPATION: SERVICE MANAGE PNB HOUSINGH
FINANCE LTD. BRANCH OFFICE AT 201 MEGAPOLICE
SQUARE II FLOOR 579 MG ROAD INDORE (MADHYA
PRADESH)
.....PETITIONER
(SHRI SANJAY PATHAK, LEARNED COUNSEL FOR THE PETITIONER)
AND
1. THE STATE OF MADHYA PRADESH PRINCIPAL
SECRETARY REVENUE DEPARTMENTM
VALLABH BHAWAN, BHOPAL MP (MADHYA
PRADESH)
2. STATE OF M.P. THROUGH COLLECTOR
ADMINISTRATIVE COMPLEX 1ST FLOOR, MOTI
TABELA, INDORE (MADHYA PRADESH)
3. STATE OF M.P. THROUGH ADDITIONAL DISTRICT
MAGISTRATE ADMINISTRATIVE COMPLEX 1ST
FLOOR, MOTI TABELA INDORE (MADHYA
PRADESH)
.....RESPONDENTS
( SHRI BHUWAN GAUTAM, GOVT. ADVOCATE FOR THE
RESPONDENTS/STATE)
This petition coming on for order this day, Justice Sushrut Arvind
Signature Not Verified
Signed by: SEHAR HASEEN
Signing time: 10/17/2023
4:06:40 PM
2
Dharmadhikari passed the following:
ORDER
The present petition has been filed by the petitioner under Article 226
of the Constitution of India against the
order/notification/circular/Policy/Decisions etc. dated 23.06.2023 and
28.08/2023(Annexure P-1, P-2 and P-3)issued by Additional District Magistrate,
Distt. Indore.
2. The brief facts of the case are that the petitioner is a Housing Finance
Company owned by Punjab National Bank(Govt. Nationalized Bank) engaged in
the business of lending and advancing money for housing loan. The petitioner
has advanced loans to the borrowers/defaults and thereafter filed cases against
the following persons whose loan accounts have been classified as Non-
Performing Asset (NPA):
Name of Borrower Case No.
Mukesh Sevkani 0176/B-121/2023-24
Rajesh Dubey 0213/B-121/2023-24
Rakesh Nagar 0208/B-121/2023-24
Shivam Singh 0095/B-121/2023-24
Akhilesh Tiwari 0114/B-121/2023-24
Devendra Singh 0113/B-121/2023-24
Kapil Dubey 0050/B-121/2023-24
Ravindra Matta 0240/B-121/2023-24
Sunil Gupta 0239/B-121/2023-24
3. The respondent no.3 has registered the cases on the application filed
by the petitioner company and started proceedings. The respondent no. 3
issued notices to the borrowers/defaulters under Section 14 of the
Securitization and Reconstruction of Financial Asset and Enforcement of
Security Interest Act, 2002 (hereinafter referred to as SARFAESI Act).
However, respondent no. 3 has not followed the direction and treated the cases
Signature Not Verified
Signed by: SEHAR HASEEN
Signing time: 10/17/2023
4:06:40 PM
as revenue cases which is against the provisions of SARFAESI Act. Being
aggrieved by the said proceedings of the case pending before the respondent
no.3, the petitioner has filed the present petition.
4. Heard arguments and perused the record.
5. Section 14 of the SARFAESI ACT is reproduced below:- " 14.
Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in
taking possession of secured asset. -
(1) Where the possession of any secured asset is required to
be taken by the secured creditor or if any of the secured asset is
required to be sold or transferred by the secured creditor under the
provisions of this Act, the secured creditor may, for the purpose of
taking possession or control of any such secured asset, request, in
writing, the Chief Metropolitan Magistrate or the District
Magistrate within whose jurisdiction any such secured asset or
other documents relating thereto may be situated or found, to take
possession thereof, and the Chief Metropolitan Magistrate or, as
the case may be, the District Magistrate shall, on such request
being made to him- a. Take possession of such asset in documents
relating thereto; and (b) forward such asset and documents to the
secured creditor.
(2) For the purpose of securing compliance with the
provisions of sub- section (1), the Chief Metropolitan Magistrate or
the District Magistrate may take or cause to be taken such steps
and use, or cause to be used, such force, as may, in his opinion, be
necessary.
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Signed by: SEHAR HASEEN
Signing time: 10/17/2023
4:06:40 PM
(3) No act of the Chief Metropolitan Magistrate or the
District Magistrate done in pursuance of this section shall be called
in question in any court or before any authority."
6. Counsel for the petitioner has heavily placed reliance upon the
judgment passed by Division Bench at Principal Seat Jabalpur in WA No.
784/2018 (Aditya Birla Finance Limited Vs. Shri Carnet Elias Fernandes
Vemalayam). Relevant para of which is reproduced below:-
"28. Coming to the argument that opportunity of hearing
was not granted to the writ-petitioners and that the order passed by
the District Magistrate violates the principles of natural justice is
again not tenable. The Bombay High Court in a judgment
reported as 2007 Cri LJ 2544 (Bom.) (Trade Well vs. Indian
Bank) has held that the District Magistrate is not required to give
notice either to the borrower or to the third party. He is only to
verify from the Bank whether notice under Section 13(2) of the Act
has been issued or not".
7. The said judgment has been quoted with approval by the Supreme
Court in a judgment reported as (2013) 9 SCC 620 (Standard Chartered
Bank, etc. vs. V. Noble Kumar and others, etc), wherein it was held as
under:-
" 22. However, the Bombay High Court in Trade Well v.
Indian Bank [2007 Cri.L.J. 2544 (Bom.)] opined;
"2 ...CMM/DM acting under Section 14 of the NPA Act
is not required to give notice either to the borrower or to the
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Signed by: SEHAR HASEEN
Signing time: 10/17/2023
4:06:40 PM
third party.
3. He has to only verify from the bank or financial
institution whether notice under Section 13(2) of the
SARFAESI Act is given or not and whether the secured assets
fall within his jurisdiction. There is no adjudication of any
kind at this stage.
4. It is only if the above conditions are not fulfilled that
the CMM/DM can refuse to pass an order under Section 14
of the NPA Act by recording that the above conditions are not
fulfilled. If these two conditions are fulfilled, he cannot refuse
to pass an order under Section 14."
8 . Learned counsel for the petitioner further relied on the judgment
passed by Single Bench of this Court in the case of Cholamandalam
Investments and Finance Ltd. Vs. Additional District Magistrate and
Others reported in 2018(3) MPLJ 123 wherein , in para 20 it is held that :
20. "It has been held that the District Magistrate has to consider only
two aspects. He has to first determine whether the secured asset falls
within his territorial jurisdiction and secondly whether the notice
under Section 13(2) has been furnished or not and no adjudication has
been contemplated at that stage."
9. In view of the aforesaid, as per Section 14 of the SARFAESI Act,
the District/Chief Metropolitan Magistrate is required to assist the secured
creditors in taking possession of secured assets. The District Magistrate is not
required to give any notice to either the borrowers or to the third party. He is
only required to verify from the Bank whether notice under Section 13(2) of the
SARFAESI Act has been issued/served or not. [See: (2013) 9 SCC 620
(Standard Chartered Bank, etc. vs. V. Noble Kumar and others, etc).
Signature Not Verified
Signed by: SEHAR HASEEN
Signing time: 10/17/2023
4:06:40 PM
10. Accordingly, the present petition is allowed. The orders dated
23.06.2023 and 28.08.2023, passed in Case No(s). 213/B-121/2023-24, 176/B-
121/2023/24 & 208/B-121/2023- 24 are hereby quashed. Additional District
Magistrate, Indore is directed to decide the application filed by the petitioner
under Section 14 of SARFAESI Act without affording any opportunity of
hearing to the borrowers/defaulters and without considering any of the
contentions or submissions or documents at any stage of the proceedings.
11. Writ petition stands allowed and disposed of.
(S. A. DHARMADHIKARI) (PRANAY VERMA)
JUDGE JUDGE
sh
Signature Not Verified
Signed by: SEHAR HASEEN
Signing time: 10/17/2023
4:06:40 PM
