Delhi District Court
Davinder Kaur Juneja vs Hdb Financial Services Ltd on 11 November, 2024
DLSE010040242020
IN THE COURT OF SH. LOVLEEN, ADDITIONAL SESSIONS
JUDGE-03, SAKET COURTS, NEW DELHI
Crl. Appeal. No. 165/2020
MRS. DAVINDER KAUR JUNEJA
W/O MR. PUSHPENDRA SINGH JUNEJA
R/O E-1002, FIRST FLOOR,
CHITTRANJAN PARK,
NEW DELHI -110019
...Appellant
Versus
HDB FINANCIAL SERVICES LIMITED
THROUGH ITS AUTHORIZED OFFICER
HAVING ITS DELHI OFFICE AT:
KHASRA 47, 2ND FLOOR, WING,
OPP. DUSSHERA GROUND BUILDING,
BEHIND OXFORD SCHOOL, VIKAS PURI,
NEW DELHI -1100118.
...Respondent
Date of institution : 23.10.2020
Date of reserving the order : 19.10.2024
Date of pronouncement : 11.11.2024
LOVLEEN
Digitally signed by
LOVLEEN
Date: 2024.11.11
14:47:35 +0530
Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 1/16
JUDGMENT
1. This is an criminal appeal under section 341 Cr.PC preferred by the appellant/ applicant against the impugned order dated 31.01.2020 passed by Court of Chief Metropolitan Magistrate SED/Saket Court, New Delhi whereby the application of appellant/applicant moved u/s 340 Cr.P.C. r/w Section 195(1)(b) Cr.P.C. was dismissed.
GROUNDS OF APPEAL
2. The grounds cited by the appellant against the impugned order are as under :
A. Because the Ld. Trial Court duly appreciated the fact that the Respondent Bank concealed the fact regarding the Appellant being in possession of the said property, and yet, in utter disregard of the prejudice caused to the Appellant due to such concealment, regarded the same as being non violative of the principles of natural justice.
B. Because the Ld. Trial Court erred in concluding that the Respondent Bank had merely concealed the fact with respect to the Appellant being in posession of the said property, when in fact the Respondent Bank had actively made a submission that the Borrowers are in possession of the said property. C. Because the Ld. Trial Court erred in arriving at the conclusion that the Respondent Bank merely concealed the fact about the possession of the said property being with the Appellant without perusing the documents on record and in LOVLEEN Digitally signed by LOVLEEN Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 2/16 Date: 2024.11.11 14:47:39 +0530 blatant ignorance thereof. The Ld. Trial Court failed to appreciate that the Respondent Bank has made a deliberate submission in its affidavit, dated 26.02.2018, stating that the possession of the said property is with the Borrowers. It is pertinent to mention here that such affidavit was submitted subsequent to the annexed photographs, dated 05.02.2018, of the said property, wherein the board of Appellant's company is clearly visible, and have been annexed by the Respondent itself.
D. Because the Ld. Trial Court failed to appreciate that the presence of Appellant on the said property was a necessary fact and would have had a bearing on the said Order. A bare reading of the said Order clarifies the perspective of the Ld. Trial Court that the possessor of the said property is the defaulter, due to which the Court Receiver was also directed to break the locks of the said property, in case the said property was found to be locked, and the Appellant verily believes that the fact about Appellant not being a defaulter, and being in possession of the said property, would have changed the course of proceedings before the Ld. Trial Court. E. Because the Ld. Trial Court completely overlooked the grave prejudice caused to the Appellant due to the false and misleading submissions of the Respondent Bank, and the desired Order been obtained by the Respondent Bank due to LOVLEEN such deliberate attempt to conceal relevant facts from the Ld. Digitally signed by LOVLEEN Trial Court.Date: 2024.11.11
F. Because the Ld. Trial Court failed to appreciate that in 14:47:42 +0530 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 3/16 view of the law as laid down in Harshad Govardhan Sondagar v International Assets Reconstruction Company Ltd. and Ors., 2014 (6) SCC 1, if the Respondent Bank had not concealed the fact with respect to the Appellant being in possession of the said property, the Ld. Trial Court would be obliged to hear the Appellant before passing any Order u/s 14 of SARFAESI Act. In the above cited judgment, the Hon'ble Supreme Court was pleased to direct the Ld. CMM to hear the tenants, who had rights in the property in question thereunder, before passing an order u/s 14 of SARFAESI Act. The Hon'ble Supreme Court held-
"In case the applications are still pending, the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, will consider the claims of the Appellants that they were in possession of the secured asset under a lease made prior to the creation of the mortgage and decide the applications under Section 14 in accordance with this judgment and any other law that may be relevant. In case, during the pendency of these appeals, orders have been passed by the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the SARFAESI Act, the orders so passed will stand quashed and the Chief Metropolitan Magistrate or the District Magistrate will pass fresh orders in accordance with this judgment and any other law that may be relevant after giving an opportunity of hearing to the Digitally signed by Appellants and the secured creditors."
LOVLEEN LOVLEEN Date:
2024.11.11 14:47:46 G. Because the Ld. Trial Court grossly erred in recording +0530 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 4/16 that the present case is hit by Section 13(13) of the SARFAESI Act, completely ignoring the facts of the case and wrongly interpreting the said provision. The reason accorded by the Ld. Trial Court for arriving at this conclusion was due to loan account being declared NPA on 01.11.2014 and the first sale deed being executed subsequent to declaration of NPA. Further, Ld. Trial Court made the observation that the second sale deed was executed subsequent to the said Notice under Section 13(2) of the SARFAESI Act.
H. It is most humbly submitted that the NPA Certificate, dated 20.02.2018, annexed by the Respondent Bank itself along with its Application under Section 14, SARFAESI Act, clearly mentions the date of classification of loan account of the Borrowers as NPA as 05.07.2015, i.e., subsequent to the Sale deed, dated 23.04.2015, executed between the said Borrowers and the previous owners. Therefore, the Ld. Trial Court committed a grave error in relying on another false statement made by the Respondent Bank with respect to the date of NPA pertaining to the loan account of the Borrowers, without perusing the NPA Certificate, dated 20.02.2018 I. Without prejudice, it is most humbly submitted that Section 13(13) mandates the borrower to take permission from the secured creditor regarding transfer of a secured asset subsequent to receiving Notice under section 13(2) and not Digitally subsequent to declaration of the loan account as NPA. The signed by LOVLEEN LOVLEEN Date: relevant provision is being reproduced hereunder for easy 2024.11.11 14:47:49 +0530 reference of this Hon'ble Court-
Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 5/16 "13. No borrower shall, after receipt of notice referred to in sub- section (2), transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor."
Therefore, even if the date of declaration of loan account as NPA was taken as per the false statement of the Respondent Bank, the present transaction would not fall within the ambit of Section 13(13), SARFAESI Act.
J. It is most humbly submitted that the subsequent sale deed, dated 06.10.2017, executed between the Appellant and the previous owners can in no way fall within the ambit of Section 13(13) as the said provision merely applies to transfer of secured asset by the borrower, whereas admittedly, the said property was transferred by the previous owners in the said sale deed and not by the borrowers.
K. Because the Ld. Trial Court failed to appreciate that due to the first sale deed being executed on 23.04.2015, and the Notice under Section 13(2) of the SARFAESI Act being sent on 15.07.2017, the present case is not hit by Section 13(13) of the SARFAESI Act, and committed grave error in relying upon LOVLEEN this observation in the impugned order.
Digitally signedL. Because the Ld. Trial Court erred in not examining the by LOVLEEN Date: 2024.11.11 present matter under the light of judgment of Jagjeet Kaur v. 14:47:53 +0530 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 6/16 Lt. Col. Harjeet Singh, 2000 (1) JCC Delhi 28, cited by the L.d. Trial Court itself, wherein the Hon'ble High Court of Delhi, while citing Thomman Vs. IInd Addl. Sessions Judge, Ernakulam and Others, (1994) Cri.L.J 48, held-
"5...... The gravity of false statement, the circumstances under which such statement is made, the object of making false statement and its tendency to impede and impair the normal flow of course of justice are matters for consideration.....
M. Because the Ld. Trial Court failed to consider the circumstances in which the false statement was made by the Respondent Bank, i.e., after receiving intimation by the Appellant with respect to being in possession of the said property, and being fully aware that the Appellant had a right to be heard before passing of the said Order, dated 07.03.2018, wherein Court Receiver was appointed for the said property. N. Because the Ld. Trial Court failed to consider the object of the Respondent Bank for making such false statements and concealing material facts from the Ld. Court, which was merely to conceal the fact that subsequent rights have been created on the said property and hence, a detailed consideration of the rights and obligations of various parties is to be considered while deciding the Application filed by the Respondent Bank. The main object of the Respondent Bank was to maliciously obtain the desired Order, dated 07.03.2018, LOVLEEN without bringing it to the Notice of the Ld. Trial Court that Digitally signed by LOVLEEN more parties than the Respondent Bank and borrowers are Date: 2024.11.11 14:47:56 +0530 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 7/16 involved in the present case.
O. Because the Ld. Trial Court failed to appreciate that the concealment of relevant facts by the Respondent Bank caused an impair in flow of justice to the Appellant herein as the rights of the Appellant were not even considered by the Ld. Trial Court while passing the Order, dated 07.03.2018. P. Because the Ld. Trial Court failed to follow the law as laid down in Sharad Pawar v. Jagmohan Dalmiya & Ors., (2010) 15 SCC 290, wherein the Hon'ble Supreme Court invariably held that-
"Having heard learned senior counsel for both sides and after perusal of record, we are of the considered view that before giving a direction to file complaint against defendants Nos. 1 to 6, it was necessary for the learned Single conduct a preliminary Judge to enquiry as contemplated under Section 340, Cr.P.C. and also to afford an opportunity of being heard to the defendants, which was admittedly not done."
Admittedly, no preliminary enquiry was conducted by the Ld. Trial Court before passing the impugned order, and hence, the impugned order is liable to be struck down on this ground alone.
Q. Because on the contrary, the Ld. Trial Court, let alone conducting a preliminary enquiry, failed to even record that the Respondent Bank has deliberately made a false statement with respect to the said property being in possession of the LOVLEEN Borrowers, and was pleased to pass the impugned order on half knowledge with respect to the concealment by the Digitally signed by LOVLEEN Date: 2024.11.11 14:47:59 +0530 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 8/16 Respondent Bank for possession of the said property being with the Appellant.
R. Because the above cited landmark judgment clearly holds that the Trial Court is required to furnish a reason as to why no process is required to be initiated u/s 340, Cr.P.C., for filing a Complaint against the Accused, however, no such finding has been recorded by the Ld. Trial Court in the impugned order and the Application u/s 340, Cr.P.C. has been decided in a summary manner without following the requisites either of Section 340, Cr.P.C. or of the above mentioned judgment.
S. Because the impugned order causes grave prejudice to the Appellant, in as much as the impugned order fails to recognize the hardship being caused to the Appellant due to false statements by the Respondent Bank, and fails to recall the said order, dated 07.03.2018, by virtue of which the Ld. Trial Court appointed the Court Receiver and directed him to take possession of the said property, without considering the fact that the said property is in the possession of the Appellant, and has been bought by the Appellant by paying the huge hard- earned amount of Rs.78,00,000/- (Rupees Seventy Eight Lakhs only) as consideration.
T. Because the Appellant is left with no other choice but to approach this Hon'ble Court to remedy the grave errors committed by the Ld. Trial Court and to seek justice for the LOVLEEN prejudice caused to the Appellant due to malicious Digitally signed by LOVLEEN concealment of facts and deliberate false statements made to Date: 2024.11.11 14:48:02 +0530 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 9/16 the Ld. Trial Court. Reliance is placed upno obersertaions made in JAGJIT KAUR V HARJEET SINGH AND OTHERS, MANU/DE0119/2000, SHARAD PAWAR VS JAGMOHAN DALMIYA AND OTHERS, SPECIAL LEAVE TO APPEAL (CRIMINAL) NO. 8408/2008, HARSHAD GOVARDHAN SONDAGAR VS INTERNATIONAL ASSETS RECONSTRUCTION COMPANY LIMITED AND OTHERS [2014 SCC ONLINE SC 295 ] AND M/S PNB HOUSING FINANCE LIMITED VS USHA RANI AND OTHERS [ 2015 SCC ONLINE 8962 ].
SUBMISSIONS OF RESPONDENT
3. The appeal has been vehemently contested on behalf of the respondent. It is submitted that the present appeal is not maintainable. Reliance is placed upon observations made in MS CHOLAMANDALAM INVESTMENT AND FINANCE VS SH. MAHESH TANEJA AND ORS IN CRL MC NO. 1723/2024 & CRL. M.A. 6607/2024.
DISCUSSION
4. This Court has considered the oral submissions as well as the records.
5. As per TCR, in the year 2013, the respondent herein extended a loan LOVLEEN facility to one Rajveer Sharma and Smt. Babli Rani Sharma against an Digitally signed immovable property - E-1002, First Floor, Chitranjan Park, New Delhi.
by LOVLEEN Date: 2024.11.11 14:48:06 +0530The said persons failed to adhere to financial discipline and accordingly the Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 10/16 respondent herein declared the loan account pertaining to said persons as a non-performing asset (NPA) on 01.11.2014. On 15.07.2017, a notice was issued u/s 13 (2) of SARFAESI Act against the said persons. Finally, the respondent herein proceeded u/s 14 of SARFAESI Act in respect of the above mentioned immovable property and moved an application before the Ld. Chief Metropolitan Magistrate in order to take over the same. On 07.03.2018, the Ld. Chief Metropolitan Magistrate allowed the said application moved by the respondent herein and appointed a receiver to take over the said property.
6. On 28.03.2018, the appellant herein moved the said application u/s 340 Cr.PC r/w section 195 Cr.P.C and sought prosecution of the Authorized Officer of the respondent herein, who had filed a supporting affidavit along with the said application moved u/s 14 of SARFAESI Act. The appellant claims that the Authorized Officer concerned had filed a false affidavit before the Ld. Chief Metropolitan Magistrate at the relevant time, leading to the passing of order dated 07.03.2018.
7. Essentially, the grievance of the appellant is that the respondent herein concealed the fact (from the Ld. Chief Metropolitan Magistrate) that the said persons namely Rajveer Sharma and Smt. Babli Rani Sharma were not in possession of the said immovable property at the time when the order dated 07.03.2018 came to be passed. Appellant claims that the said immovable property had already been sold by said Rajveer Sharma and Smt. Babli Rani Sharma to Shri. Atma Ram and Smt. Kusum vide a sale LOVLEEN deed dated 23.04.2015, who then sold the same further to appellant vide Digitally signed by LOVLEEN Date: 2024.11.11 sale deed dated 06.10.2017. As such, the respondent herein did not declare 14:48:11 +0530 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 11/16 correct facts before the Ld. Chief Metropolitan Magistrate when the said application u/s 14 of SARFAESI Act was filed for taking over the possession of the above said immovable property. Appellant has raised other contentions as well, as narrated in the aforegoing part of this judgment, in order to buttress her prayer.
8. However, this Court must point out that at the core of the application moved by appellant u/s 340 Cr.P.C is the 'False Statement' made by the Authorized Officer of the respondent herein in the affidavit annexed along with the application moved u/s 14 of SARFAESI Act at the relevant time before the Ld. Chief Metropolitan Magistrate. The said 'False Statement' is the affirmation to the effect that the said immovable property was in possession of said Rajveer Sharma and Smt. Babli Rani Sharma.
9. Here it would be appropriate to refer to the observations made by the Hon'ble High Court of Delhi in M/s. Cholamandalam Investment and Finance (supra). In the said judgment, which is a direct precedent on the matter in issue, the Hon'ble High Court has observed as under:-
18. I have heard the learned counsel for the parties and have perused the record. On the basis of the contentions raised by the parties, the short question which arises for consideration in the present petition is that whether the learned CMM in exercise of his jurisdiction under Section 14 of the SARFAESI Act could entertain an application under LOVLEEN Section 340 CrPC at the instance of third party (respondent Digitally signed by LOVLEEN nos. 1 and 2) and pass an order staying its earlier order Date: 2024.11.11 14:48:14 +0530 whereby the Receiver had been appointed to take possession Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 12/16 of the secured asset in terms of the said provision.
................................................................................. ...................................................................................
20. Under the SARFAESI Act, a secured creditor has been conferred a right to enforce any security interest created in his favour without the intervention of the Court or tribunal except for seeking limited assistance of the Chief Metropolitan Magistrate to take possession of secured asset as provided under Section 14 thereof. Under the said provision the secured creditor has an option to file an application to seek assistance of the CMM or the District Magistrate, if required, for taking possession or control of any secured asset. Once the Magistrate is satisfied as to the contents of the affidavit furnished by the secured creditor in terms of the first proviso to sub-section (1) of Section 14 of the SARFAESI Act, he will pass suitable orders for the purpose of taking possession of the secured asset.
21. Before passing such an order the learned CMM or District Magistrate is not even obliged to give notice or afford any hearing to the borrower. This itself shows that the function to be performed by the Magistrate under Section 14 of the SARFAESI Act is ministerial and not adjudicatory. Thus, it will not be within the purview of the Magistrate's jurisdiction under Section 14 of the SARFAESI Act to Digitally signed by LOVLEEN LOVLEEN Date:
entertain any objection either of the borrower or of any third 2024.11.11 14:48:18 +0530 party questioning the exercise of powers under the said provision. As a logical extension of this proposition, the Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 13/16 learned CMM cannot entertain an application under Section 340 CrPC while exercising his limited powers of extending assistance to the secured creditor in taking possession or control of any secured asset.
22. Reference may also be had to the decision of a coordinate bench of this court in Munish Kumar Bhunsali Vs. Kotak Mahindra Bank Ltd. 2019 SCC OnLine Del 9702, wherein it was observed that the role of the Magistrate while dealing with an application is not adjudicatory. The relevant part of the decision reads thus:
"27. Thus, the role of the Magistrate while dealing with an application under Section 14 of the Act is not adjudicatory nor is he obliged to give notice to the borrower. By filing an application under Section 14 of the Act, the secured creditor exercises one of the options available with him to take possession of the secured asset. All that the Magistrate at this stage is required to see is that requirements of the Act and the rules framed thereunder are satisfied in the affidavit filed on behalf of the secured creditor and proceed to pass an order."
(emphasis supplied)
23. Another related facet of the controversy which needs to be noted is that the power under Section 340 CrPC read with Section 195(1)(b) CrPC can be exercised only where someone fabricates false evidence or gives false statement in the judicial proceedings, and not in other proceedings. This Digitally signed by LOVLEEN becomes evident from the reading of Sections 193, 199, 204 LOVLEEN Date:
2024.11.11 14:48:21 +0530 and 209 of the Indian Penal Code which have been referred Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 14/16 to in Section 195(1)(b) CrPC. The said provisions use the expression "judicial proceedings" or "Court of Justice". The expression "Court of Justice" has been defined under Section 20 IPC as under:
"20. "Court of Justice". The words "Court of Justice" denote a Judge who is empowered by law to act judicially alone, or a body of Judges which is empowered by law to act judicially as a body, when such Judge or body of Judges is acting judicially.
24. The Hon'ble Supreme Court in Amarsang Nathaji As himself and as Karta and Manager vs. Hardik Harshadbhai Patel and Ors. (2017) 1 SCC 113, has also observed that for invoking Section 340 CrPC the statement or evidence given in relation to proceedings in the Court should not only be false or fabricated but it should be intentionally given at any stage of the judicial proceedings. The relevant para of the decision reads as under:
"6. The mere fact that a person has made a contradictory statement in a judicial proceeding is not by itself always sufficient to justify a prosecution under Sections 199 and 200 of the Penal Code, 1860 (45 of 1860) (hereinafter referred to as "IPC"); but it must be shown that the defendant has intentionally given a false statement at any stage of the judicial proceedings or fabricated false evidence for the purpose of using the same at any stage of the judicial proceedings. Even after the above position has emerged also, still the court has to form an opinion that it is expedient in the interests of justice to initiate an inquiry into the offences of LOVLEEN Digitally signed by LOVLEEN Date: 2024.11.11 Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 15/16 14:48:25 +0530 false evidence and offences against public justice and more specifically referred to in Section 340(1) CrPC, having regard to the overall factual matrix as well as the probable consequences of such a prosecution. (See K.T.M.S. Mohd. v. Union of India [K.T.M.S. Mohd. v. Union of India, (1992) 3 SCC 178: 1992 SCC (Cri) 572]). The court must be satisfied that such an inquiry is required in the interests of justice and appropriate in the facts of the case."
25. As the petitioner in the proceedings under Section 14 of the SARFAESI Act had furnished the affidavit only in terms of first proviso to sub-section (1) of the said provision and such affidavit was not furnished by way of evidence nor the proceedings under Section 14 of the SARFAESI Act can be construed as judicial proceedings, therefore, the learned CMM has no jurisdiction to entertain an application under Section 340 CrPC."
10. In view of the above observations, this court is constrained to hold that the application moved by the appellant u/s 340 CrPC before the Ld. Chief Metropolitan Magistrate was not maintainable. Consequently, the present appeal is also rendered non- maintainable, and is hereby dismissed.
11. Let TCR be sent back along with copy of this judgment.
12. Appeal file be consigned to Record Room. Digitally signed by LOVLEEN Announced & Dictated in the LOVLEEN Date:
Open Court today i.e. 11.11.2024 2024.11.11 14:48:39 (Lovleen) +0530 ASJ-03 (South East) Saket Courts, Delhi Crl. Appeal. No. 165/2020 Davinder Kaur Juneja vs HDB Financial Services 16/16