Madhu Bhandari v. Piramal Capital & Housing Finance Ltd

1. The present petition has been filed under Article 226 and 227 of the Constitution of India on behalf of the petitioner assailing the order dated 08.12.2022, passed by the learned CMM East District, Karkardooma Court, New Delhi in SARFAESI Petition bearing Misc. Crl. No. 202/2022 appointing Receiver to take over the possession of the property of the petitioner i.e. B-32, Khasra No. 831, Gali No. 1, Kumaon Square, West Vinod Nagar, Village Mandawali Fazalpur, Shahadara, New Delhi (hereinafter referred as 'disputed property').

2. Learned counsel appearing on behalf of the petitioner submits that the petitioner is neither a borrower nor a guarantor. He submits that the notice was affixed on the premises of the petitioner, to which the petitioner has submitted a detailed reply on 17.02.2022 stating various averments therein and clarifying the fact that the property in question has no concern with the loan, if anym taken by the borrower. It is also stated therein that an illegal and arbitrary notice of possession was issued to the petitioner, who had never taken any loan. The petitioner, therefore, requested the respondent No. 1 to withdraw the illegal notice dated 09.02.2022. It was further stated that if there was any other explanation/clarification required from the ends of the petitioner, the same would be rendered accordingly.

3. Learned counsel appearing on behalf of the respondent, however, submits that the instant petition is not maintainable and the petitioner has efficacious alternate remedy under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). He, in addition submits that the respondent No. 1 is a Non-Banking Financial Institution (hereinafter referred as ‘NBFC’) and is purely discharging the contractual obligation entered into between the respondents and the borrower. If any person who is aggrieved by any measure taken by the financial institution, the appropriate remedy is not to approach the High Court but to avail the alternate mechanism in accordance with the provisions of SARFAESI Act.

4. Learned counsel for the petitioner in rejoinder has placed reliance on the decision of the Hon’ble Supreme Court in the case of Radha Krishnan v. State of Himachal Pradesh and Ors.[1] and another decision in the case of Maharashtra State Board of Wakfs v. Shaikh Yusuf Bhai Chawla and Others[2].

5. I have heard learned counsel appearing for the parties and perused the record.

6. The Hon’ble Supreme Court in the case of Mardia Chemicals Ltd. v. Union of India 3 in paragraph No. 50 thereto has held as under:- “50. It has also been submitted that an appeal is entertainable before the Debt Recovery Tribunal only after such measures as provided in sub-section (4) of Section 13 are taken and Section 34 bars to entertain any proceeding in respect of a matter which the Debt Recovery Tribunal or the appellate Tribunal is empowered to determine. Thus before any action or measure is taken under subsection (4) of Section 13, it is submitted by Mr. Salve one of the counsel for respondents that there would be no bar to approach the civil court. Therefore, it cannot be said no remedy is available to the borrowers. We, however, find that this contention as advanced by Shri Salve is not correct. A full reading of section 34 shows that the jurisdiction of the civil court is barred in respect of matters which a Debt Recovery Tribunal or appellate Tribunal is empowered to determine in respect of any action taken "or to be taken in pursuance of any power conferred under this Act". That is to say the prohibition covers even matters which can be taken cognizance of by the Debt Recovery Tribunal though no measure in that direction has so far been taken under sub-section (4) of Section 13. It is further to be noted that the bar of jurisdiction is in respect of a proceeding which matter may be taken to the Tribunal. Therefore, any matter in respect of which an action may be taken even later on, the civil court shall have no jurisdiction to entertain any proceeding thereof. The bar of civil court thus applies to all such matters which may be taken cognizance of by the Debt Recovery Tribunal, apart from those matters in which measures have already been taken under subsection (4) of Section 13”.

7. The Hon’ble Supreme Court thereafter in various other pronouncements including the decision in the cases of Indian Overseas Bank v. M/S. Ashok Saw Mill[4], Agarwal Tracom Pvt. Ltd. v. Punjab National Bank[5] and United Bank of India v. Satyawati Tondon 6,

Kanaiyalal Lalchand Sachdev & Ors. V. State of Maharashtra & Ors.[7] has clearly held that ordinarily the High Court should not entertain a petition under Article 226 of the Constitution, if an effective remedy is available to the aggrieved person and that rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of bank and financial institutions.

8. In the case of Standard Chartered Bank v. V. Noble Kumar & Ors.[8] in paragraph No.27, the Hon’ble Supreme Court has clearly held that when the secured creditor obtains possession of a secured asset either through the process contemplated under Section 14 or without resorting to such a process the same is always a measure against which a remedy under Section 17 is available.

9. The submission raised by the learned counsel for the petitioner is that the instant property has never been mortgaged and the entire action according to him is being taken against the person who has no concern with NBFC. However, the fact remains that the learned CMM has passed the order in exercise of the power vested under the SARFAESI Act, therefore, the petitioner has the remedy to agitate his grievance before the appropriate forum under the SARFAESI Act. Whether or not the disputed property is subjected to mortgage, as claimed by the petitioner, is a question of fact, which requires proper adjudication under the provisions of the SARFAESI Act.

10. The Hon’ble Supreme Court recently in the case of Balkrishna Rama Tarle & Anr. v. Phoenix ARC Private Limited & Ors[9]. has held that the powers exercisable by CMM/DM under Section 14 of the

SARFAESI Act are ministerial steps and the said Section does not involve any adjudicatory process qua points raised by the borrower against the secured creditor taking possession of the secured assets. It has been held that once all requirement under Section 14 of the SARFAESI Act are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an Advocate appointed by the Advocate Commissioner.

11. In the instant case, if the financial institutions are called upon to explain and to indicate as to which is the secured asset and on what basis the appropriate steps have been taken under the SARFAESI Act, against the secured asset, the same would amount to by passing the remedies available under the SARFAESI Act, which is a course that a writ court ordinarily avoid except in exceptional circumstances. Since the legal position, as has been explained by the various pronouncements of the Hon’ble Supreme Court, clearly states that any action arising out of exercise of power under the provisions of the SARFAESI Act may not ordinarily be amenable to writ jurisdiction, this court declines to entertain the instant petition.

12. So far as the principles of law laid down in the decision relied upon by learned counsel for the petitioner in the case of Radha Krishnan (supra) is concerned, there is no dispute with respect to the same. However, the same is not applicable under the facts of the present case.

13. The petition is accordingly dismissed. However, the petitioner is at liberty to approach the appropriate forum, in accordance with law. It is clarified that this court has not expressed any opinion on the merits of the case. If the petitioner avails any appropriate alternate remedy, the same may be considered expeditiously and in accordance with law and uninfluenced by any observations made hereinabove.