M/S.Ranjith Electricals vs Reliance Assets Reconstruction ...
2023 Latest Caselaw 8131 Mad

                                                                                  Crl.O.P.No.18990 of 2022


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                 DATED : 12.07.2023

                                                     CORAM :

                                  THE HON'BLE MR.JUSTICE N.ANAND VENKATESH

                                              Crl.O.P.No.18990 of 2022
                                            and Crl.M.P.No.12578 of 2022

                    1. M/s.Ranjith Electricals
                       Rep. by its Partner,
                       K.Ravi

                    2. K.Ravi                                    .. Petitioners

                                                      Versus

                    1. Reliance Assets Reconstruction Co. Ltd.
                       No: 5, Reliance House,
                       Haddows Road, 4th Floor,
                       Nungambakkam, Chennai - 600 006.

                    2. T.R.Pandian
                    3. T.R.Mahadevan
                    3. T.R.Ellapan                               .. Respondents

                    Prayer : Criminal Original Petition filed under Section 482 of the Code of
                    Criminal Procedure, to call for the records pertaining to Crl.M.P.No.5693 of
                    2020 on the file of the learned C.M.M, Egmore, Chennai and to set aside the
                    order of dismissal passed in Crl.M.P.No.3096 of 2022 in Crl.M.P.No.5693
                    of 2020, dated 15.06.2022 and quash the order passed in Crl.M.P.No.5693



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                                                                                   Crl.O.P.No.18990 of 2022


                    of 2022, dated 22.12.2021 as non-maintainable, unenforceable, non-est and
                    abuse of process of law.

                                    For Petitioners     : Mr.V.Saravana Rengan

                                    For Respondents : Mr.M.S.Krishnan, Senior Counsel
                                                for M/s.Abitha Banu,
                                                for R1

                                                        ORDER

This Criminal Original Petition has been filed challenging the order

passed by the learned Chief Metropolitan Magistrate, Egmore in

Crl.M.P.No.3096 of 2022 refusing to stay the order passed in

Crl.M.P.No.5693 of 2020 under Section 14 of the SARFAESI Act, 2002

(hereinafter referred to as 'SARFAESI Act').

2. The case of the petitioners is that the respondents 2 to 4 had availed

loan from the first respondent and they failed to repay back the same. The

second petitioner stood as a guarantor to the said loan. The loan was

categorised as NPA and the proceedings were initiated under the

SARFAESI Act.

3. The first respondent filed an application in Crl.M.P.No.5693 of

2020 under Section 14 of the SARFAESI Act to take possession of the https://www.mhc.tn.gov.in/judis

Crl.O.P.No.18990 of 2022

secured assets before the learned Chief Metropolitan Magistrate, Egmore,

Chennai. This application came to be allowed by an order, dated

22.12.2021.

4. The second petitioner filed a memo before the learned Chief

Metropolitan Magistrate, Egmore, which was taken on file in

Crl.M.P.No.3096 of 2022 to keep the order passed under Section 14 of the

SARFAESI Act in abeyance. The said memo came to be dismissed by the

Court below by an order, dated 15.06.2022.

5. Aggrieved by the same, the present petition has been filed before

this Court under Section 482 of the Code of Criminal Procedure (hereinafter

referred to as 'Cr.P.C.,').

6. The learned Counsel for the petitioner submitted that the National

Company Law Tribunal, Mumbai (hereinafter referred to as 'NCLT') has

already passed an order under the Insolvency and Bankruptcy Code, 2016,

dated 06.12.2021 and the entire management of Reliance Capital Limited is

now vested with an administrator. It was further contended that the order

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Crl.O.P.No.18990 of 2022

that was passed by the NCLT will also bind the business clusters and one

such cluster is the Reliance Assets Reconstruction Company Limited which

is the first respondent in this petition. In view of the same, the learned

Counsel submitted that the application filed by the first respondent before

the learned Chief Metropolitan Magistrate at Egmore is unsustainable and if

at all any such petition is filed, it can be done only by the administrator with

whom the entire administration of Reliance Capital Limited and its clusters

stands vested.

7. Per contra, the learned Senior Counsel appearing on behalf of the

first respondent questioned the very maintainability of this petition on the

ground that there is an effective alternative remedy available to the

petitioners under Section 17 of the SARFAESI Act. It was further

contended that the first respondent is a subsidiary company of Reliance

Capital Limited and that it is a separate entity in the eye of law and the

concept of business cluster, at the best can only extend up to the share that

is held by the Reliance Capital Limited in the first respondent Company and

no further. The learned Senior Counsel further submitted that the order that

was passed by the learned Chief Metropolitan Magistrate, Egmore under

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Crl.O.P.No.18990 of 2022

Section 14 of the SARFAESI Act has become final and the said order has

not been put to challenge. What has been put to challenge in this Criminal

Original Petition is the subsequent order passed by the learned Chief

Metropolitan Magistrate dismissing the memo filed by the petitioners

seeking to keep the order passed under Section 14 of the SARFAESI Act in

abeyance. The learned Senior Counsel further contended that even as per

the scheme that is provided under the Insolvency and Bankruptcy Code,

2016, a subsidiary Company is always treated to have an independent

identity and just because the Reliance Capital Limited is now vested with

the administrator, that does not mean that all the subsidiary Companies will

also come within the administrative control of the administrator. The

learned Senior Counsel also placed reliance upon certain judgments of the

Hon'ble Apex Court to contend that the present petition filed before this

Court is not maintainable.

8. This Court has carefully considered the submissions made on either

side and materials available on record.

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Crl.O.P.No.18990 of 2022

9. The present petition has been filed under Section 482 of Cr.P.C.

This petition has been filed against the order passed by the learned Chief

Metropolitan Magistrate, Egmore dismissing the memo / application that

was filed by the second petitioner to keep the order passed under Section 14

of the SARFAESI Act in abeyance. Admittedly, the order that was passed

under Section 14 of the SARFAESI Act has not been put to challenge and

that order passed in Crl.M.P.No.5693 of 2020, dated 22.12.2021 has

become final.

10. The first issue to be considered by this Court is regarding the

maintainability of this petition filed under Section 482 of Cr.P.C. The

power under Section 482 of Cr.P.C., is a recognition of the inherent power

of the High Court to make such orders as may be necessary to give effect to

any order under the code. The subsequent clauses namely to prevent abuse

of process of any Court or to secure the ends of justice, must be necessarily

read ejusdem generis to the main requirement which is to give effect to any

order passed under the Code of Criminal Procedure. Hence the matter that

is placed before the Court under Section 482 of Cr.P.C., must be relatable to

the Code of Criminal Procedure and the consequences falling out of it.

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Crl.O.P.No.18990 of 2022

11. In the case in hand, the subject matter of the challenge before this

Court is not even the order passed by the learned Chief Metropolitan

Magistrate, Egmore under Section 14 of the SARFAESI Act. It is only the

subsequent order passed by the Court below refusing to keep the order

passed under Section 14 of the Act in abeyance, that has been put to

challenge in this Criminal Original Petition. Even assuming that the order

passed under Section 14 of the SARFAESI Act is put to challenge, the same

will not be maintainable under Section 482 of Cr.P.C. The order passed

under the SARFAESI Act will not fall within the requirement of Section

482 of Cr.P.C., and hence a petition challenging the said order cannot be

maintained.

12. There is yet another reason as to why this Court cannot entertain

this Criminal Original petition and that is, the availability of the alternative

remedy to the petitioners under Section 17 of the SARFAESI Act. The

taking of possession of the property by filing an application under Section

14 of the SARFAESI Act is only a continuation of the proceedings under

Section 13(4) of the SARFAESI Act. The very enactment provides for an

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Crl.O.P.No.18990 of 2022

alternative remedy under Section 17 of the SARFAESI Act for an aggrieved

person. In view of the same, the aggrieved person cannot be permitted to

file a petition under Section 482 of Cr.P.C., before this Court and certainly

such a petition can never be entertained by this Court. Just because the

order was passed by the learned Chief Metropolitan Magistrate, Egmore,

that by itself will not subject such an order for challenge under Section 482

of Cr.P.C.

13. The learned Senior Counsel appearing on behalf of the petitioners

brought to the notice of this Court the latest order passed by the Hon'ble

Apex Court in Appeal (C) No(s).22093-22094 of 2022, dated 06.07.2023.

That was a case where this Court had entertained a petition under Section

482 of Cr.P.C., wherein, an order passed under Section 14 of the

SARFAESI Act was put to challenge. The Hon'ble Apex Court has

categorically held that there is a remedy provided under SARFAESI Act and

without availing that remedy, a petition under Section 482 of Cr.P.C., can

never be maintained.

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Crl.O.P.No.18990 of 2022

14. The Hon'ble Apex Court in United Bank of India Vs. Satyawati

Tondon and Ors.1 and Kanaiyalal Lalchand Sachdev and Ors. Vs. State of

Maharashtra and Ors.2, has deprecated the practice of entertaining any

petition before the High Court as against the proceedings initiated under

SARFAESI Act in view of the alternative remedy that is available under the

SARFAESI Act. This is yet another reason as to why the petitioner cannot

sustain the present petition before this Court.

15. Since this Court has held that the very petition that has been filed

under Section 482 of Cr.P.C., is not maintainable, it is not necessary for this

Court to go into the other issues that have been raised on merits and

regarding the administrative control of the administrator on the clusters

belonging to the Reliance Capital Limited. It is not necessary to render any

findings on these issues.

16. In the result, this Criminal Original Petition stands dismissed.

Consequently, connected miscellaneous petition is closed.

1 (2010) 8 SCC 110 2 (2011) 2 SCC 782 https://www.mhc.tn.gov.in/judis

Crl.O.P.No.18990 of 2022

12.07.2023 Index : yes/no Speaking order/Non-speaking order Neutral Citation : yes/no grs

To

The Chief Metropolitan Magistrate, Egmore, Chennai.

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Crl.O.P.No.18990 of 2022

N.ANAND VENKATESH, J.

grs

Crl.O.P.No.18990 of 2022 and Crl.M.P.No.12578 of 2022

12.07.2023

https://www.mhc.tn.gov.in/judis