Vanya Jain v. Ambit Finvest Pvt Ltd

14. I have heard the learned senior counsel appearing on behalf of the petitioner and perused the record.

15. Sections 13(1), 13(2) and 13(3A) of the SARFAESI Act are reproduced as under:-

(3A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate [within fifteen days] of receipt of such representation or objection the reasons for non acceptance of the representation or objection to the borrower”

16. In the instant case, the petitioner seeks to challenge the initiation of the recovery proceedings. If the provisions of Section 13(3A) of the SARFAESI Act are perused, the same would indicate that after service of the demand notice under Section 13(2) of the SARFAESI Act, the borrower can make a representation or raise objection before the secured creditor. The secured creditor is under an obligation to consider such representation or objection made by the borrower and if the secured creditor comes to a conclusion that such representation or objection is not acceptable or tenable, he shall communicate the reasons for non-acceptance of the representation or objection to the borrower within 15 days of receipt of such representation or objection.

17. Learned senior counsel submits that the petitioner made a representation under Section 13(3A) of the SARFAESI Act vide notice dated 19.05.2023(Annexure-P11) and raised objections against the demand notice dated 02.05.2023. The respondents vide letter dated 03.06.2023(Annexure- P12) replied that the petitioner, by the way of such representation, intends to procrastinate and derail the proceedings initiated under the SARFAESI Act, and for that reason the representation made and the objections raised by the petitioner vide notice dated 19.05.2023 are not acceptable and tenable.

18. It may also be considered, at this stage, that the proviso to Section 13(3A) as also the explanation to Section 17(1) of the SARFAESI Act explicitly provide that the reasons so communicated or the likely action of the secured creditor shall not confer any right upon the borrower, to challenge the action of the creditor by way of an application to the Debt Recovery Tribunal (‘DRT’) under Section 17 of the SARFAESI Act. The proviso to Section 13(3A) and the explanation to Section 17(1) are reproduced as under: “13(3A) … Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A. … 17(1) … Explanation.—For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section.”

19. This proviso to Section 13(3A) and the explanation to Section 17(1) was inserted through the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004 (hereinafter ‘Amending Act of 2004’). In order to decipher the intention of the legislature, the Statement of Object and Reasons of the amending act may be referred to. The material part of it reads as under: “Statement of Objects and Reasons.—The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected thereto. The Act enables the banks and financial institutions to realise long-term assets, manage problems of liquidity, asset liability mismatch and improve recovery by exercising powers to take possession of securities, sell them and reduce nonperforming assets by adopting measures for recovery or reconstruction. The Act further provides for setting up of asset reconstruction companies which are empowered to take possession of secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured assets and take over the management of the business of the borrower.

2. The Hon’ble Supreme Court, in the case of Mardia Chemicals Ltd. v. Union of India, A.I.R. 2004 S.C. 2371: (2004) 4 S.C.C 311, inter alia,— (a) upheld the validity of the provisions of the said Act except that of sub-section (2) of Section 17 which was declared ultra vires Article 14 of the Constitution. The said sub-section provides for deposit of seventy-five per cent. of the amount claimed before entertaining an appeal (petition) by the Debts Recovery Tribunal (DRT) under Section 17; (b) observed that in cases where a secured creditor has taken action under sub-section (4) of Section 13 of the said Act, it would be open to borrowers to file appeals under Section 17 of the Act within the limitation as prescribed therefor. It also observed that if the borrower, after service of notice under subsection (2) of Section 13 of the said Act, raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief that may be, must be communicated to the borrower. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under Section 17 of the Act, at that stage.

3. In view of the above judgment of the Hon’ble Supreme Court and also to discourage the borrowers to postpone the repayment of their dues and also enable the secured creditor to speedily recover their debts, if required, by enforcement of security or other measures specified in subsection (4) of Section 13 of the said Act, it had become necessary to amend the provisions of the said Act.

4. Since the Parliament was not in session and it was necessary to take immediate action to amend the said Act for the above reasons, the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Ordinance, 2004 was promulgated on the 11th November, 2004.” [Emphasis supplied]

20. It can thus be seen that the Amending Act of 2004 intended to prevent, and further prescribe, intervention to take place at the stage of Section 13(2) and 13(3A) of the SARFAESI Act.

21. The Hon’ble Supreme Court in M/s. Hindon Forge Pvt. Ltd. & Anr. vs. State of Uttar Pradesh[5] while discussing the Amending Act of 2004 and its effect upon the scheme of the SARFAESI Act, explained the rationale for disallowing a borrower from preferring an application to the DRT against assailing the steps taken by a secured creditor under Section 13(2) and 13(3A) of the SARFAESI Act. In paragraph no.10, the Hon’ble Supreme Court observed as under: “10. A reading of section 13 would make it clear that where a default in repayment of a secured debt or any instalment thereof is made by a borrower, the secured creditor may require the borrower, by notice in writing, to discharge in full his liabilities to the secured creditor within 60 days from the date of notice. It is only when the borrower fails to do so that the secured creditor may have recourse to the provisions contained in section 13(4) of the Act. Section 13(3-A) was inserted by the 2004 Amendment Act, pursuant to Mardia Chemicals (supra), making it clear that if on receipt of the notice under section 13(2), the borrower makes a representation or raises an objection, the secured creditor is to consider such representation or objection and give reasons for non acceptance. The proviso to section 13(3-A) makes it clear that this would not confer upon the borrower any right to prefer an application to the Debts Recovery Tribunal under section 17 as at this stage no action has yet been taken under section 13(4).”

22. It can thus be seen that at the stage of Section 13(2) of the SARFAESI

Act, wherein a demand notice is to be sent by a secured creditor to its borrower demanding discharge of liabilities, as also when the secured creditor is obligated to consider the reply of a borrower made to the demand notice, as provided for under Section 13(3A) of the SARFAESI Act, there is no actual harm that is caused to a borrower.

23. It is also of significance to note that the legislature through its SARFAESI Act has provided the borrower an opportunity to challenge the actions of the secured creditor at the stage of Section 13(4) by preferring an application under Section 17 of the SARFAESI Act. The scheme of the SARFAESI Act, therefore, envisages a procedure that attempts to shield a secured creditor from the interventions of the judicial process till the stage of Section 14 has been reached.

24. This finding may be better appreciated in light of the broader purpose for which the SARFAESI Act was enacted. The material part of the Statement of Objects and Reasons for the SARFAESI Act reads as under: “THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 (Act No. 54 of 2002)

STATEMENT OF OBJECTS AND REASONS The financial sector has been one of the key drivers in India's efforts to achieve success in rapidly developing its economy. While the banking industry in India is progressively complying with the international prudential norms and accounting practices, there are certain areas in which the banking and financial sector do not have a level playing field as compared to other participants in the financial markets in the world. There is no legal provision for facilitating securitisation of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow pace of recovery of defaulting loans and mounting levels of nonperforming assets of banks and financial institutions… …These Committees, inter alia, have suggested enactment of a new legislation for securitisation and empowering banks and financial institutions to take possession of the securities and to sell them without the intervention of the court.”

25. It can thus be seen that in order to allow secured creditors to realize their security interests, the SARFAESI Act, aimed to keep judicial intervention at a minimum. The pronouncements of the Hon’ble Supreme Court and the various High Courts have further resonated this opinion. This court considers it appropriate to consider a few judgments relevant to the present factual matrix.

26. The Hon’ble Supreme Court in Punjab National Bank and Anr. vs. Imperial Gift House and Ors.[6] decided an appeal assailing an order of the concerned High Court that involved a pari materia factual scenario. The material part of the judgment is reproduced as under:

28. Thus, the Hon’ble Supreme Court in catena of cases has held that the writ jurisdiction being equitable, is discretionary in nature, and should not be exercised unless there are exceptional circumstances. Similar observations were made in Commissioner of Income Tax & Ors vs. Chhabil Dass Aggarwal[8] and General Manager, Sri Siddeshwara Cooperative Bank Ltd. and Anr. vs. Ikbal & Ors[9].

29. The Hon’ble Supreme Court in the matter of Radha Krishan Industries (supra) has held as under:-

30. No doubt, if the writ court is satisfied that the action is wholly without jurisdiction, it can entertain a writ petition. However, in the instant case the petitioner is not remediless. The petitioner has already availed the right of making a representation, which is duly replied by the respondents. The petitioner, therefore, will have to wait till measures under Section 13(4) of the SARFAESI Act are taken by the respondents to avail the remedy under Section 17 of the SARFAESI Act. In the interregnum, the scope for interference in writ jurisdiction is not warranted.

31. The High Court normally should not entertain a writ petition under Article 226 of the Constitution of India at this stage. The aforesaid legal position has been summarized by the Hon’ble Supreme Court in the case of Mardia Chemicals Ltd. v Union of India10. Paragraphs nos. 39 and 40 of the said decision read as under:-

(2004)4 SCC 311. borrower to pay the same to him as it may be sufficient to pay the secured debtor as provided under clause (d) of Section 3(4) of the Act. Sub-section (8) of Section 13, however, provides that if all the dues of the secured creditor including all costs, charges and expenses, etc. as may be incurred are tendered to the secured creditor before sale or transfer, no further steps be taken in that direction.

40. Now coming to Section 17, it provides for filing of an appeal to the Debts Recovery Tribunal within 45 days of any action taken against the borrower under sub-section (4) of Section 13 of the Act. It reads as under: “17. Right to appeal.—(1) Any person (including borrower) aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorized officer under this chapter, may prefer an appeal to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken. (2) Where an appeal is preferred by a borrower, such appeal shall not be entertained by the Debts Recovery Tribunal unless the borrower has deposited with the Debts Recovery Tribunal seventy-five per cent of the amount claimed in the notice referred to in sub-section (2) of Section 13: Provided that the Debts Recovery Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section. (3) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder.” It is thus clear that an appeal under sub-section (1) of Section 17 would lie only after some measure has been taken under subsection (4) of Section 13 and not before the stage of taking of any such measure. According to sub-section (2), the borrower has to deposit 75% of the amount claimed by the secured creditor before his appeal can be entertained."

32. In paragraph no. 45 it is further explained as under:-

33. The Hon’ble Supreme Court in the case of Standard Chartered Bank v. V. Noble Kumar11 has also dealt with the scheme of the SARFAESI Act. The relevant paragraph nos. 27 and 28 read as under:- “27. The “appeal” under Section 17 [“17. Right to appeal.—(1) Any person (including the borrower) aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed, to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken: Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.”(emphasis supplied)] is available to the borrower against any measure taken under Section 13(4). Taking possession of the secured asset is only one of the measures that can be taken by the secured creditor. Depending upon the nature of the secured asset and the terms and conditions of the security agreement, measures other than taking the possession of the secured asset are possible under Section 13(4). Alienating the asset either by lease or sale, etc. and appointing a person to manage the secured asset are some of those possible measures. On the other hand, Section 14 authorises the Magistrate only to take possession of the property and forward the asset along with the connected documents to the borrower (sic the secured creditor). Therefore, the borrower is always entitled to prefer an “appeal” [Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311. The expression “appeal” as originally existed in Section 17 is substituted by the word “representation” in view of the judgment of this Court in Mardia Chemicals case.“59. We may like to observe that proceedings under Section 17 of the Act, in fact, are not appellate proceedings. It seems to be a misnomer. In fact it is the initial action which is brought before a forum as prescribed under the Act, raising grievance against the action or measures taken by one of the parties to the contract. It is the stage of initial proceeding like filing a suit in civil court. As a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of the Act in the present case.” (Mardia Chemicals case, SCC p. 352, para 59)] under Section 17 after the possession of the secured asset is handed (2013)9 SCC 620. over to the secured creditor. Section 13(4)(a) declares that the secured creditor may take possession of the secured assets. It does not specify whether such a possession is to be obtained directly by the secured creditor or by resorting to the procedure under Section

14. We are of the opinion that by whatever manner the secured creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 17 is available.

28. It can be noticed from the language of the proviso to Section 13(3-A) and the language of Section 17 that an “appeal” under Section 17 is available to the borrower only after losing possession of the secured asset. The employment of the words “aggrieved by … taken by the secured creditor” (emphasis supplied) in Section 17(1) clearly indicates the appeal under Section 17 is available to the borrower only after losing possession of the property. To set at naught any doubt regarding the interpretation of Section 17, the proviso [ “Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under Section 17 or the Court of District Judge under Section 17-A.”] to sub-section (3-A) of Section 13 makes it explicitly clear that either the reasons indicated for rejection of the objections of the borrower or the likely action of the secured creditor shall not confer any right under Section 17.”

34. The Hon’ble Supreme Court in the case of M/s. South Indian Bank Ltd. & Ors. vs. Naveen Mathew Philips & Anr.12 held that the High Courts should not interfere in commercial matters where equally efficacious alternative forum exists and the powers conferred under Article 226 of the Constitution of India are to be exercised only in extraordinary circumstances, particularly in commercial matters which involve a lender and a borrower and the legislature has provided specific mechanism for redressal. “18. While doing so, we are conscious of the fact that the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal.”

35. A similar view has also been taken by this court in the case of Satpal Singh Kohli and Anr. vs. Canara Bank13 whereby, the court was not inclined to entertain the writ petition under Article 226 of the Constitution of India. The relevant paragraph nos. 14, 15 and 16 read as under:- “14.The petitioner has a remedy to raise his grievances in terms of Section 13(4) (a) of the SARFAESI Act, 2002, which admittedly has not been availed of.

15. In view thereof and under the facts of the present case, this court is not inclined to entertain the instant writ petition at this stage leaving it open for the petitioner to raise his grievances in terms of Section 13(4)(a) of the SARFAESI Act, 2002 and if in case the petitioner has grievance thereafter the appropriate remedy would be under Section 17 of the SARFAESI Act, 2002.

16. In view of the aforesaid case writ petition against impugned notices under section 13(2) of the SARFAESI Act, 2002 dated 08.08.2022 and 17.08.2022 by the respondent-bank is not entertained.”

36. The Hon’ble Supreme Court in the case of Phoenix Arc Pvt. Ltd. v. Vishwa Bharati Vidya Mandir and Ors.14, has held that the filing of writ petitions under Article 226 of the Constitution of India assailing actions under Section 14 of the SARFAESI Act, while ignoring the statutory remedies provided under Section 17, is an abuse of the process of law. Paragraph no.21 of the said judgment reads as under: “21.Applying the law laid down by this Court in Mathew 2023:DHC:001427. (2022)5SCC345. K.C. [State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85: (2018) 2 SCC (Civ) 41] to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the court. The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13-8- 2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs 1 crore only (in all Rs 3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs 117 crores. The ad interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of court. It appears that the High Court has initially granted an ex parte ad interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.”

37. It is of importance to consider that the judgement of the Hon’ble Supreme Court in the case of Phoenix ARC (supra), was in the context of actions taken by a secured creditor under Section 14, from which appeal lies under Section 17 of the SARFAESI Act. In other words, the Hon’ble Supreme Court exhorted that ordinarily writ petitions ought not to be entertained that assail actions taken under Section 14, which expressly allow judicial intervention in the form of an appeal under Section 17 of the SARFAESI Act.

38. This court is of the opinion that the judgement of Phoenix ARC (supra), in relation to the abuse of the process of law, applies with greater rigour against actions taken under provisions of law which are merely aimed at initiating proceedings, and are at a stage at which the Act concerned itself does not allow an appeal. Key distinctions between the stages from which appeals or applications can be preferred to challenge a decision of a creditor, needs to be appreciated. In this context, this court may beneficially refer to another pronouncement of the Hon’ble Supreme Court in the case of Authorized office, State Bank of Travancore v. Mathew K.C.15. The material part of the judgement reads as under: “6. …The writ petition was filed in undue haste in March 2015 immediately after disposal of objections under Section 13(3-A). The legislative scheme, in order to expedite the recovery proceedings, does not envisage grievance redressal procedure at this stage, by virtue of the explanation added to Section 17 of the Act, by Amendment Act 30 of 2004, as follows: Explanation.—For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section.”

7. The Section 13(4) notice along with possession notice under Rule 8 was issued on 21-4-2015. The remedy under Section 17 of the SARFAESI Act was now available to the respondent if aggrieved…”

39. This court is therefore of the opinion that in the instant case, the respondents, by issuing the demand notice under Section 13(2) of the

SARFAESI Act have merely attempted to comply with the statutory requirements, that enable them to proceed under the statutory framework of the SARFAESI Act. The stage of Section 13(3A) has been expressly made non-appealable by virtue of the proviso to Section 13(3A) and the explanation to Section 17(1). It would thus be a disservice to the will of the legislature, if this court through the means of the present writ petition, circumvents the statutory process. The petitioner in order to assail the actions of the respondents has to await the stage of Section 13(4), and thereafter approach the DRT to agitate its concerns. The present petition is therefore found to be premature.

40. At this stage, this court may briefly consider the contention of the petitioner relating to the respondents allegedly committing a fraud by virtue of them not disclosing the charge upon the property in issue, at the time at which the sale deed dated 23.01.2019 was executed.

41. Per contra, the respondents in their communication dated 03.06.2023 categorically submitted that the sale deed dated 23.01.2019 was executed between the parties having full knowledge of the fact that the subject property was mortgaged with respondent no.1. For the sake of clarity, paragraph nos. 3 to 10 of the communication dated 03.06.2023 are reproduced as under:-

5. That based on the valuation report and the title search report, it was found that Mr. Jaswant Rai Jain, who is father in law of your client as well as father of Mr. Praveen Jain has bequeathed all his moveable and immoveable properties to his sons and daughters through testamentary succession and in consonance with the same, he had executed a WILL regd. as document no. 5738, in additional book No. III, Volume no. 929, on pages 83 to 85, dated 26/11/2011, wherein Mr. Jaswant Rai Jain had divided the share of the property i.e., Residential Plot of C-3/ 15, Ashok Vihar, Phase-2 Delhi amongst his sons and daughter. In the said WILL, Mr. Jaswant Rai Jain has appointed your client's husband, Mr. Sunil Jain as the executor of the said WILL.

6. That pursuant to this, your client's husband along with his brother and sister has executed a "Disclaimer Deed" dated 26/02/2016 in favour of Mr. Praveen Jain, wherein they have unconditionally and irrevocably disclaimed their undivided share, rights, titles and interests in the said portion of the property SECOND FLOORPORTION, AND 1/3RD JOINT SHARE OF TERRACE OVER SECOND FLOOR ALONGWITH 1/3RD OF JOINT SHARE OF LAND UNDERNEATH OF PART OF FREEHOLD BUILTUP PROPERTY BEARING NO. C-3/15, MEASURING 400 SQ. YDS, SITUATED AT ASHOK VIHAR PHASE-II, DELHI-II0052 in favour of Mr. Praveen Jain without any consideration absolutely and forever in full senses and without any pressure.

7. That pursuant to the execution of the aforesaid disclaimer deed, Mr.Praveen Jain became the absolute owner of the said property and thereby he has mortgaged the said property in favour of AFPL at the time of availing the aforesaid loan facility as security for the repayment of the loan facility.

8. That, when the Borrowers have defaulted in repayment of the loan facility availed by them and even after repeated requests and reminders, the Borrowers have not repaid the loan amount availed from us, we had an apprehension that Mr. Praveen Jain may create third party interest in the mortgaged property. Hence, we have pasted a public Notice informing the public at large that the property is mortgaged with AFPL and further informed the public at large to refrain from dealing with property without the written confirmation from our side. However, even though your client was admittedly aware of the said public notice, but your client has neither objected to the said public notice nor has issued any reply to the SaIIle. Hence, it is evident on record that your client has deliberately kept muted until this notice which gives a probable conclusion that the said notice is an afterthought, and your client has deliberately kept muted with an intention to defraud APFL in connivance with Mr. Pravin Jain and other borrowers.

9. However, to our utter shock and surprise, your client's husband along with his brother Mr. Pravin Jain have played a fraud upon AFPL by admittedly executing a sale deed dated 23.01.2019 with the Borrower, Mr. Pravin Jain for the property bearing SECOND FLOOR PORTION, PART OF FREEHOLD BUILTUP PROPERTY BEARING NO. C- 3/15,MEASURING 400 SQ. YDS, SITUATED AT ASHOK VIHAR PHASE- II, DELHI-l10052, which is void ab initio as your client, her husband as well as Mr. Pravin Jain were very well aware that the said premises is already mortgaged with us as on 08.01.2018. Accordingly, ABFL has first and exclusive charge over the said property and hence, there is no legal validity of the sale deed dated 23.01.2019. It is also impossible to understand as to how the sale deed has been executed when the said property was admittedly bequeathed in favour of Mr.Pravin Jain, vide "Disclaimer Deed" dated 26/02/2016. Consequently, your client's husband along with Mr. Pravin Jain is liable to be criminally prosecuted for their said illegal acts.

10. After considering the representations made and the objections raised by you, on instruction of your client, in the said Reply, AFPL has come to a conclusion that the representations made and the objections raised in the said Reply are not acceptable and tenable."

42. There is thus a significant dispute between the parties relating to the factual issue of the petitioner possessing the requisite knowledge about the charges upon the property in issue.

43. This court does not consider it appropriate to decide upon this disputed question of fact in a petition under Article 226 of the Constitution of India.

44. The decisions relied upon on behalf of the petitioner are not on the issue of entertaining a writ petition at the stage of Section 13(2) of the SARFAESI Act. The proposition of law laid down therein may have relevance at an appropriate stage. It is for this reason, all the decisions, at this stage, would not help the petitioner.

45. Having considered the submissions and in view of the settled legal position as explained above, this court, at this stage, is not inclined to entertain the instant writ petition and the same is, therefore, dismissed along with the pending application.

46. All the rights and contentions of the parties are left open to be considered by the appropriate forum at the appropriate stage, in accordance with law. This court has not expressed any opinion on the merits of the case.

PURUSHAINDRA KUMAR KAURAV, J JULY 24, 2023/nc/rs