Telangana High Court

M/S. Edelweiss Asset ... vs The State Of Telangana on 14 September, 2023

Bench: Alok Aradhe, N.V.Shravan Kumar

     THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
                                     AND
     THE HON'BLE SRI JUSTICE N.V.SHRAVAN KUMAR

                          W.P.No.26366 OF 2018
ORDER: (Per the Hon'ble the Chief Justice Alok Aradhe)

       Mr.Rajiv        V.     Pandey,      learned       counsel       represents

Mr.K.Anthony Reddy, learned counsel for the petitioner.

       Mr. Allam Ramesh, learned Government Pleader appears

respondent Nos.1 to 3.

2. Heard on the question of admission.

3. The petitioner is asset reconstruction company. According

to the petitioner, an order under Section 14 of the Securitisation

and Reconstruction of Financial Assets and Enforcement of

Security Interest Act, 2002 (hereinafter referred to as 'the

SARFAESI Act') was passed by the District Collector, Sanga

Reddy District. The respondent No.3, namely Tahsildar, Ameenpur

Mandal, Sangareddy District, instead of complying with the order

passed by the District Collector, passed the following order:

"Through the reference cited, the District Collector, Medak at Sangareddy forwarded a letter vide Lr.No.C3/2632/2016, dt: 03.09.2016 and instructed to ::2::

taking physical possession of the property and handed over under the Cover of Panchanama and the same to petitioners Bank i.e., Authorized Officer, Edelweiss Asset Reconstrcution Co., Ltd., CST road, Kalina, Mumbai, as per the provisions of Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Through the reference 3rd cited, the Mandal Revenue Inspector has submitted an enquiry report. As per the report, the Sy.Nos.1075, 1087, 1085, 1086, 1091, 1128 situated at Ameenpur Village pertaining to Shanker houses and there are covered with houses and people residing in the houses and the said Sy.Nos ends schools are there".

4. In the aforesaid factual background, the petitioner has filed

the instant writ petition seeking the following relief:

"It is therefore prayed that this Hon'ble Court may be pleased to issue a writ order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the respondent No.3 issuing impugned notice dated 18.03.2017, is illegal, invalid, void abinitio and without any force of law, and consequently direct the respondent No.3 to handover the possession of the properties as per the direction of respondent No.2, and pass such other order or orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice".

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5. Learned counsel for the petitioner submitted that the

relief claimed in the writ petition is in two parts. It is

submitted that the petitioner seeks quashment of impugned

notice dated 18.03.2017 issued by the Tahsildar and seeks a

direction to handover the possession, and as per the direction

of the District Collector dated 03.09.2016, which according to

learned counsel for the petitioner, is an order passed under

Section 14 of the Act. In support of his submission, learned

counsel for the petitioner has placed reliance on the decision of

a Division Bench of Bombay High Court dated 03.08.2022

passed in W.P.No.9749 of 2021.

6. We have considered the submission made by learned

counsel for the petitioner and have perused the record.

7. Section 14 of the Act is reproduced below:

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 ::4::

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 and documents relating thereto; and

(b) forward such asset and documents to the secured creditor:

[Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that---

(i) the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application;

(ii) the borrower has created security interest over various properties and that the Bank or Financial Institution is holding a valid and subsisting security interest over such properties and the claim of the Bank or Financial Institution is within the limitation period;

(iii) the borrower has created security interest over various properties giving the details of properties referred to in sub-clause (ii) above;

(iv) the borrower has committed default in repayment of the financial assistance granted aggregating the specified amount;

(v) consequent upon such default in repayment of the financial assistance the account of the borrower has been classified as a non-performing asset;

(vi) affirming that the period of sixty days notice as required by the provisions of sub-section (2) of section 13, demanding payment of the defaulted financial assistance has been served on the borrower;

(vii) the objection or representation in reply to the notice received from the borrower has been considered by the secured creditor and reasons for non- acceptance of such objection or representation had been communicated to the borrower;

(viii) the borrower has not made any repayment of the financial assistance in spite of the above notice and the ::5::

Authorised Officer is, therefore, entitled to take possession of the secured assets under the provisions of sub-section (4) of section 13 read with section 14 of the principal Act;

(ix) that the provisions of this Act and the rules made thereunder had been complied with:

Provided further that on receipt of the affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets 1[within a period of thirty days from the date of application:]

[Provided 2[also] that if no order is passed by the Chief Metropolitan Magistrate or District Magistrate within the said period of thirty days for reasons beyond his control, he may, after recording reasons in writing for the same, pass the order within such further period but not exceeding in aggregate sixty days.] Provided also that the requirement of filing affidavit stated in the first proviso shall not apply to proceeding pending before any District Magistrate or the Chief Metropolitan Magistrate, as the case may be, on the date of commencement of this Act.]

[(1A) The District Magistrate or the Chief Metropolitan Magistrate may authorise any officer subordinate to him,--

(i) to take possession of such assets and documents relating thereto; and

(ii) to forward such assets 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. (3) No act of the Chief Metropolitan Magistrate or the District Magistrate 4[any officer authorised by the Chief Metropolitan Magistrate or District Magistrate] done in pursuance of this section shall be called in question in any court or before any authority".

Thus, from perusal of the aforesaid provision, it is evident that

where the possession of any secured asset is required to be taken by ::6::

the secured creditor, an application has to be made before 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.

8. Section 14(2) of the Act reads as under:

"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.

From perusal of Section 14(2) of the Act, it is evident that 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.

9. The petitioner, therefore, has an effective remedy available

to him in terms of Section 14(2) of the Act. We, therefore, decline

to exercise the extraordinary jurisdiction in the wake of the

effective statutory remedy available to the petitioner under Section

14(2) of the Act.

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10. So far as submission placed on the judgment of the Division