Uttarakhand High Court
WPMS/1125/2023 on 19 April, 2023
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
ON THE 19TH DAY OF APRIL, 2023
BEFORE:
HON'BLE SHRI JUSTICE MANOJ KUMAR TIWARI
WRIT PETITION (M/S) No. 1125 of 2023
BETWEEN:
M/S Shantiram
Agro Industries & others. .......Petitioners
(By Mr. Vijay Bhatt, Advocate)
AND:
State of Uttarakhand & others. ....Respondents
(Mr. Vinod Nautiyal, Deputy Advocate General for the State of
Uttarakhand/respondent nos. 1 & 2 and Mr. Siddhartha Jain,
Advocate for respondent no. 4)
JUDGMENT
Heard learned counsel for the parties.
2. Petitioners took different loans from Punjab
National Bank Branch Kashipur, on different dates.
Since petitioners could not repay the loan in time,
therefore, recovery proceedings have been initiated
against them, by invoking provisions of Securitisation
and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 (for short 'SARFAESI Act,
2002').
3. In this writ petition, petitioners have
challenged an order passed by District Magistrate,
Udham Singh Nagar in exercise of power under Section
14 of SARFAESI Act, 2002.
4. It is contended on behalf of petitioners that
petitioners' property is worth many times more than the
amount, which is to be recovered from petitioners, and
respondent-bank is trying to sell off petitioners'
property, at throwaway price. It is further contended
that the secured asset, which petitioners are trying to
sell is agricultural land, therefore, exempted from
recovery proceedings, in view of provision contained in
Section 31(i) of SARFAESI Act, 2002. Various other
arguments were made on behalf of petitioners.
5. Hon'ble Supreme Court in the case of Kotak
Mahindra Bank v. Girnar Corrugators Pvt. Ltd., reported
in AIR (2023) Supreme Court 268 has held as under:-
"10. Even otherwise the Naib Tahsildar was
not at all justified in not taking possession of the
secured assets/properties as per order dated 24-9-
2014 passed by the District Magistrate under
Section 14 of the SARFAESI Act. The order passed
by the Naib Tahsildar refusing to take possession of
the secured assets/properties despite the order
passed under Section 14 of the SARFAESI Act on
the ground that recovery certificates issued by
Respondent 1 for recovery of the orders passed by
the Facilitation Council are pending, is wholly
without jurisdiction. While exercising power under
Section 14 of the SARFAESI Act, even the District
Magistrate has no jurisdiction and/or District
Magistrate and/or even the Chief Metropolitan
Magistrate has no jurisdiction to adjudicate the
dispute between secured creditor and debtor. Under
Section 14 of the SARFAESI Act, the District
Magistrate or the Chief Metropolitan Magistrate as
the case may be is required to assist the secured
creditor in getting the possession of the secured
assets. Under Section 14 of the SARFAESI Act,
neither the District Magistrate nor the Metropolitan
Magistrate would have any jurisdiction to adjudicate
and/or decide the dispute even between the secured
creditor and the debtor. If any person is aggrieved
by the steps under Section 13(4)/order passed
under Section 14, then the aggrieved person has to
approach the Debts Recovery Tribunal by way of
appeal/application under Section 17 of
the SARFAESI Act. Therefore, the order passed by
the Naib Tahsildar refusing to take the possession
pursuant to the order passed by the District
Magistrate under Section 14 of the SARFAESI Act
was wholly without jurisdiction and therefore also
the same was liable to be set aside.
11. In view of the above and further reasons
stated above, the impugned judgment and order
passed by the Division Bench of the High Court is
unsustainable and the same deserves to be quashed
and set aside. Consequently, the present appeal is
allowed. The impugned judgment and order dated
11-8-2017 passed by the Division Bench of the High
Court of Madhya Pradesh at Indore in Writ Appeal
No. 268 of 2017 is set aside and the judgment and
order passed by the learned Single Judge is hereby
restored. It is observed and held that so far as
recoveries under the SARFAESI Act with respect to
the secured assets would prevail over the recoveries
under the MSMED Act to recover the amount under
the award/decree passed by the Facilitation Council.
It is rightly observed by the learned Single Judge
that if Respondent 1 is aggrieved by the order
passed by the District Magistrate under Section 14
of the SARFAESI Act, it will be open for him to
initiate proceedings under Section 17 of
the SARFAESI Act which be considered in
accordance with law and on its merits and subject to
the provisions of Section 17 and the provisions of
the SARFAESI Act."
6. In view of the aforesaid judgment, it is
apparent that petitioners have remedy under Section 17
of SARFAESI Act, 2002. From aforesaid judgment, it is
also apparent that District Magistrate, while exercising
power under Section 14 of the Act, do not adjudicate on
any factual dispute, and the power to adjudicate is only
available to Debts Recovery Tribunal under Section 17
of SARFAESI Act, 2002.
7. Since petitioners have a statutory remedy
before Debts Recovery Tribunal, therefore, writ petition
is disposed of by permitting petitioners to approach
Debts Recovery Tribunal, within two weeks from today.
8. For a period of two weeks, no coercive action
shall be taken against petitioners. It shall be open to
petitioners to raise all contentions before Debts
Recovery Tribunal.
(MANOJ KUMAR TIWARI, J.)
Navin
