Nido Home Finance Ltd Formerly Known As Edelweiss Housing Finance Limited v. Mansingh Babasaheb Kharat And ORS
2024:BHC-AS:42694-DB Diksha Rane 23. WP 14114-24.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 14114 OF 2024 NIDO HOME FINANCE LTD.
..PETITIONER VS MR. MANSINGH BABASAHEB KARAT & ORS ..RESPONDENTS ------------ Mr. Ashutosh R. Gole a/w. Ms. Vishwali Botle for petitioner. Mr. N. K. Rajpurohit, AGP for the respondent - State. ------------ CORAM :
A.S. CHANDURKAR & RAJESH S. PATIL, JJ DATE :
23rd October 2024.
P.C. :
1.
Rule. Rule made returnable forthwith and by consent of the parties heard finally.
2.
By the present Writ Petition the petitioner - a financial institution is seeking directions to respondent no. 4, to decide the application dated 16th July 2024 and hand over physical possession of the "secured assets" viz. Flat Nos.2 and 6, both admeasuring 46.85 sq. mtrs., each, situated in the building known as Amol Apartment, Building No.5B, Sector No. - 21, Scheme No.2 in village Nigdi, Pimpri Chinchwad, Yamuna Nagar, Navnagar Vikas Pradhikarn, Pimpri Chinchwad.
3.
The facts of this case reveal that the petitioner - a financial
Diksha Rane 23. WP 14114-24.doc institution had granted home loan to the respondent nos.1 to 3 to the tune of Rs.34,74,000/-. In consideration of the said credit facility, the said respondent nos. 1 to 3 executed various loan and security documents and created security interest over the secured assets. Since there was default in repayment of credit facilities, the accounts of the borrowers were classified as "Non Performing Assets" (NPA). Thereafter, the petitioner issued a demand notice under Section 13(2) calling upon the borrowers to pay a sum of Rs.32,32,015.65 together with further interest, charges and expenses incurred until the date of payment within 60 days from the date of receipt of the notice and even published a public notice on 27th December 2022. The petitioner have taken symbolic possession of the secured asset on 3rd March 2023.
4.
Despite issuing the said demand notice, the respondent nos. 1 to 3 neither discharged their liability within stipulated period nor raised any objections or made any representations under Section 13 (3-A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for short 'SARFAESI'). On account of the respondent nos.1 to 3 failure to repay the laon amount, the petitioner moved an application under Section 14 of the SARFAESI before the learned Additional District Magistrate, Pune.
Diksha Rane 23. WP 14114-24.doc The said application under Section 14 was allowed by order dated 15th May 2023 and the respondent no.5 was appointed to take possession of the secured assets with help of the police and hand over the same to authorized officers of the petitioner. Pursuant thereto on 29th November 2023, the respondent no.5 issued a notice to the respondent nos.1 to 3 informing them that the possession of the secured assets will be taken and will be handed over to the petitioner on 14th December 2023. Thereafter, on 14th December 2023, the respondent no.5 took physical possession of the secured assets and handed over to the petitioner.
5.
As per the petitioner's case, on 11th March 2024, at 3.00 p.m., the respondent nos.1 to 3 removed the seal fixed on the secured assets and unlawfully entered the secured assets. Hence, the petitioner immediately lodged a police complaint with the respondent no.7 against the respondent nos. 1 to 3. The petitioner also filed an application with the office of respondent no.4 for seeking necessary assistance for repossession of the secured assets. However, according to the petitioner, no further action has been taken by the police authorities or by the respondent no.5 against the respondent nos.1 to
3. The petitioner hence has filed the present Writ Petition seeking a necessary direction for taking back physical possession of the secured
Diksha Rane 23. WP 14114-24.doc assets by respondent nos.1 to 3 and handing over the same back to the petitioner.
6.
Mr. Ashutosh Gole, learned counsel for the petitioner submitted that respondent no.4 should forthwith remove the trespassers/borrowers from the secured assets and hand over the physical possession to the petitioner. So also, the respondent no.7 should initiate prosecution against the trespassers/ borrowers. Mr. Gole relied upon the decision of Division Bench of this Court (Aurangabad Bench) in the case of the Nashik Merchant Co-operative Bank vs. The District Collector, Jalna & Ors. (Writ Petition No.10069/2022 decided on 28th February 2023) and the order passed by the Division Bench of this Court where one of us (Rajesh S. Patil, J.) was a party in the case of Kotak Mahindra Bank Ltd. & Anr. vs. State of Maharashtra & Ors. (Writ Petition No.6805 of 2023), which followed the proposition of law as laid down in Nashik Merchant Cooperative Bank (supra). 7.
He submitted that there is no need for a fresh order to be passed by the Collector under the provisions of the SARFAESI Act since the two orders above referred passed by the Division Bench of this Court have categorically held that there is no need of re-exercise
Diksha Rane 23. WP 14114-24.doc the powers of executing the order passed under Section 14. The Tahsildar should execute the order passed by the Collector and reinstitute the possession of secured assets to secured creditors. 8.
Mr. N. K. Rajpurohit, Assistant Government Pleader appearing for the State submitted that the District Magistrate does not have a power to re-execute his own order as he has become functus officio. He submitted that there is no provision under the Act that provides for restoration of possession of secured assets to the secured creditors who has lost the possession.
9.
We have heard the learned counsel for the parties at length and with the help of both the counsel we have gone through the papers and proceedings of the above Writ Petition.
10.
The only question in the present Writ Petition would be whether this Court can grant directions to the District Magistrate and/or the Tahsildar, to re-execute the order passed under Section 14 and to hand over the possession of secured assets to the secured creditor.
11.
According to us, this question is no more res integra and is covered by the decision of the Division Bench of this Court in the case of Nashik Merchant Co-operative Bank (supra). Paragraph 20 of the
Diksha Rane 23. WP 14114-24.doc said order reads as under:-
20. The uncontroverted factual aspects in present matter depict that the respondent Nos.5 and 6 have devised novel, unimaginable and unsustainable modus operandi to defeat ends of justice and fair play. It is not only the matter of physical altercation, but would tantamount to assault on the law and statute. They have the audacity to overrule the law. The growing tendency of overpowering the law cannot be tolerated. In peculiar facts and circumstances of this case, we are inclined to exercise powers under Article 226 of the Constitution of India to protect the rule of law and deprecate rising tendency of using criminal force against recovery proceeding undertaken by the financial institutions in terms of SARFAESI Act. We do not find any prohibition under the scheme of the SARFAESI Act that comes in the way of District Magistrate or his delegate to re-exercise the powers to execute the orders passed under section 14. (Emphasis supplied) 12.
Further, the Division Bench of this Court in Kotak Mahindra Bank Ltd. (supra) has followed the decision of Nashik Merchant Cooperative Bank (supra). The paragraph 13 of the said order reads as under:-
13. Considering the law laid down by the Division Bench of this Court and referred to by us above, we are unable to agree with the submission made by the learned AGP that the District Magistrate does not have the power to re-execute his own order or that he has become functus officio. If we were to take the view as propounded by the learned AGP it would lead to a complete chaos. We have no hesitation in stating that the borrowers have devised a novel, unimaginable and unsustainable modus operandi to defeat the ends of justice. It is not only the matter of physical altercation by assaulting the security guard appointed by the Petitioner Bank and breaking open the lock and seal affixed on the secured asset which is wholly illegal, but the same would also tantamount to an assault on the law and the statute itself.
If, after orders are passed under section 14 for dispossession of the borrower, and the same are inter-meddled with by any person including the borrower, the same would result in a mockery of the rule of law. In such a situation the court cannot and should not remain a mute spectator and allow the illegality to continue. The tendency of trying to overreach the law as well as the orders passed by Judicial Authorities has to be nipped in the bud right away, lest the rule of law shall suffer."
Diksha Rane 23. WP 14114-24.doc 13.
Therefore, considering the facts of the present proceedings and in view of the law as held in the case of Nashik Merchant Cooperative Bank (supra) and Kotak Mahindra Bank Ltd. (supra), we are of the considered view that this is a fit case to exercise our jurisdiction under Article 226 of the Constitution of India and allow the Writ Petition.
14.
In the circumstances, we pass the following order.
ORDER
(A) The Writ Petition is allowed. The Respondent No.4 to 6 are directed to take back physical possession of the "secured assets" viz. Flat Nos.2 and 6, both admeasuring 46.85 sq. mtrs. Each, situated in the building known as Amol Apartment, Building No.5B, Sector No. - 21, Scheme No.2 in village Nigdi, Pimpri Chinchwad, Yamuna Nagar, Navnagar Vikas Pradhikarn, Pimpri Chinchwad and hand over back to the petitioner, if there is no other legal impediment. (B) Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. [ RAJESH S. PATIL, J. ] [ A.S. CHANDURKAR, J. ] Signed by: Diksha Rane Designation: PS To Honourable Judge Date: 25/10/2024 12:22:57