Allahabad High Court
Iifl Home Finance Ltd vs State Of Up And 6 Others on 16 October, 2024
Author: Manoj Kumar Gupta
Bench: Manoj Kumar Gupta
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Neutral Citation No. - 2024:AHC:164412-DB Court No. - 21 Case :- WRIT - C No. - 23426 of 2024 Petitioner :- Iifl Home Finance Ltd Respondent :- State Of Up And 6 Others Counsel for Petitioner :- Ashish Malhotra Counsel for Respondent :- C.S.C. Hon'ble Manoj Kumar Gupta,J.
Hon'ble Vikas Budhwar,J.
1. The detailed facts leading to filing of the instant petition are noted in our previous order dated 14.8.2024, which is as follows:-
"1. The petitioner is a secured creditor. It had moved separate applications under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the Act') before ADM (Finance & Revenue), who exercises delegated power of the District Magistrate. The applications have been allowed by orders of different dates. The orders are of the year 2022, 2023 and 2024. Despite orders for delivery of actual physical possession of the security asset to the secured creditor, the physical possession has not been delivered. The petitioner aggrieved thereby, has filed these petitions, seeking implementation of the orders passed under Section 14 of the Act.
2. The court is coming across number of cases every day where the only prayer made is for enforcement of the orders passed by District Magistrate/Chief Metropolitan Magistrate under Section 14 of the Act. Considerable time of the court is consumed in overseeing the execution of the orders passed under Section 14 of the Act.
3. Section 14(1A) stipulates as follows: -
"(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."
4. In most cases, we find that SDM or some officer subordinate to District Magistrate has been authorized to take possession of the assets in compliance of order under Section 14. However, in most cases, because of lackadaisical attitude of the authorized officers, the orders under Section 14 are not being implemented with expedition, leading to filing of writ petitions before this court.
5. Broadly speaking, the cases which are coming before us, fall under two categories. Firstly, where the borrower has obtained stay from DRT or from any other court of law. In such cases, undoubtedly, the order could not be executed. The second category of cases are those cases where either there is no challenge by the borrower or where a challenge has been made, but there is no interim order, but still no effective measures are taken to implement the order passed under Section 14 of the Act. As a result, the very object of the legislation, i.e. to enable a secured creditor to recover its dues expeditiously without aid or intervention of the Courts, is getting defeated. The secured creditors are unable to enforce the security interest expeditiously.
6. Sub-section (2) of Section 14 provides 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. It is evident from the legislative scheme that while on the one hand, the District Magistrate or Chief Metropolitan Magistrate has been given power to authorize an officer subordinate to him to take possession of the security assets, but at the same time, the Chief Metropolitan Magistrate/District Magistrate have to monitor compliance of the order passed under Section 14 and if necessary, to use such force as may be necessary for effective implementation of the order. However, the Chief Metropolitan Magistrate/District Magistrate after passing of the orders under Section 14, are not taking any steps to secure compliance of the order passed under sub-section (1) of Section 14 of the Act. This is clear abdication of the statutory obligation.
7. We are of the opinion that the Chief Secretary should device a mechanism which may guide the officers/authorities entrusted with the function of implementing orders under Section 14 of the Act. We suggest that the Chief Secretary may form a Committee of senior officials who may lay down guidelines for effective implementation of the order under Section 14 of the Act. The Committee may provide for the kind of registers/records to be maintained in each district, so that the monitoring becomes easy and effective. The manner in which the District Magistrates should monitor the implementation of the orders under Section 14 of the Act and appropriate remedial measures to be taken in case of delay, may also be suggested. We feel that if proper monitoring is done by the District Magistrates on weekly basis, on basis of records maintained for the said purpose, it may avoid unnecessary litigation and would also facilitate in achieving the legislative intent. It should be made explicitly clear that any laxity or delay on part of the District Magistrate or authorized officers would not be acceptable. The recommendation of the Committee may be given shape of a circular and be communicated to all concerned.
8. Affidavit of compliance shall be filed by a responsible officer, not below the rank of Special Secretary (Home).
9. List as fresh on 5.9.2024.
10. Sri Rajiv Gupta, learned Additional Chief Standing Counsel, will communicate the instant order to the Chief Secretary for due compliance."
2. In compliance of the above order, Special Secretary (Home), Government of U.P., Lucknow has filed an affidavit disclosing the steps taken by the Government for ensuring implementation of the orders passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the Act'). It reveals that the State Government had constituted a Committee comprising of seven persons. The Chairperson of the said Committee was Commissioner and Secretary, Board of Revenue. It comprised of heads of various other departments and also General Manager and Coordinator, State Level Bankers Society, Uttar Pradesh.
3. The aforesaid Committee suggested a detailed mechanism to ensure expeditious implementation of orders passed under Section 14 of the Act and the same has been accepted by the State Government and on its basis office order has been issued on 1.10.2024 which, inter alia, stipulates that as soon as a request is made by any secured creditor for providing police force to implement the order passed under Section 14 of the Act, the S.H.O. of the concerned police station would extend full cooperation and will ensure that possession is delivered without delay.
4. The affidavit also discloses that in order to ensure end-to-end monitoring, direction has been issued by the Chief Secretary vide letter dated 15.10.2024 to the Commissioners of different areas and District Magistrates and Police Commissioners / Superintendent of Police / Senior Superintendent of Police to monitor the implementation of the orders on a weekly basis. A register has also been prescribed wherein relevant entries have to be made which would facilitate expeditious implementation and monitoring.
5. The respondents have also taken steps to develop a portal with the help of Banks by the Board of Revenue, for online monitoring. The guidelines also provide that District Magistrate will ensure that Executive Magistrate will remain present at the time of delivery of possession where there is any apprehension of breach of law and order.
6. Sri Rajiv Gupta, learned Additional Chief Standing Counsel, submits that the guidelines framed by the State have already been circulated to all concerned authorities and the same are being strictly followed.
7. Having regard to the steps already taken by the State Government in regard to implementation of the orders passed under Section 14 of the Act, we are of the opinion that no further direction is required to be issued by this Court. The petitioner may approach the concerned Magistrate or the S.H.O. for delivery of actual physical possession of the security asset to it provided there is no legal impediment.
8. The concerned Magistrate/S.H.O. would take appropriate steps for implementation of the order under Section 14 of the Act after verifying that there is no legal impediment.
9. The petition stands disposed of, accordingly.
Order Date :- 16.10.2024 piyush (Vikas Budhwar, J.) (Manoj Kumar Gupta, J.)