Karnataka High Court
D.Thiagaraj vs M/S Punjab National Bank on 13 August, 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF AUGUST, 2020
BEFORE
THE HON'BLE MR. JUSTICE N.K. SUDHINDRARAO
CRIMINAL REVISION PETITION No.1335/2015
BETWEEN:
1. D.THIAGARAJ
S/O LATE N DHANASINGH
AGED ABOUT 48 YEARS.
2. SMT. VANAJA K
W/O D THIAGARAJ(MAJOR)
AGED ABOUT 45 YEARS.
BOTH RESIDING AT:
No.8 (OLD No.7) 5TH 'B' MAIN
BHUVANESHWARI NAGAR
CHOLANAYAKANAHALLI HOBLI
R.T.NAGAR POST
BANGALORE - 560 032. ..PETITIONERS
(BY SRI G V CHALUVARAJA, ADVOCATE)
AND:
1. M/s. PUNJAB NATIONAL BANK
HOUSING FINANCE LIMITED
No.90, 39TH CROSS, 16TH MAIN
'T' BLOCK, JAYANAGAR
BANGALORE - 560 041.
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2. SRI GOVINDA SWAMY
VICE PRESIDENT/AUTHORISED
OFFICER OF PUNJAB NATIONAL BANK
HOUSING FINANCE LIMITED
No.90, 3RD CROSS, 16TH MAIN
'T' BLOCK, JAYANAGAR
BANGALORE - 560 041.
3. SRI PRADEEP
S/O G P RAGHAVENDRA
GOPADI ASSOCIATES
No.39/39, JAI MUNIRAO
CIRCLE, MAGADI MAIN ROAD
AGRAHARA DASARAHALLI
BANGALORE - 560 079. ..RESPONDENTS
(BY SRI K V LOKESH, ADVOCATE)
THIS CRIMINAL REVISION PETITION IS FILED
UNDER SECTION 397 R/W 401 CR.P.C PRAYING TO SET
ASIDE THE ORDER DATED 28.09.2015 PASSED IN
CRL.MISC.No.1207/2009 PASSED BY THE VIII A.C.M.M.,
BANGALORE AND DIRECT THE TRIAL COURT TO TAKE
CONGNIZANCE OF THE PETITIONERS COMPLAINT.
THIS CRIMINAL REVISION PETITION COMING ON
FOR ADMISSION THIS DAY, THE COURT THROUGH VIDEO
CONFERENCE AT BENGALURU MADE THE FOLLOWING:
ORDER
This matter is taken up through Video Conference today.
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With the consent of the learned counsel appearing for the parties, matter is taken up for final disposal.
2. Learned counsel Sri.G.V.Chaluvaraja for petitioner and Sri.K.V.Lokesh, learned counsel for respondents are present.
3. Petition is filed under Section 397 read with Section 401 of Cr.P.C. against the order dated 28.09.2015 passed in Crl.Misc.No.1207/2009 by the VIII Additional Chief Metropolitan Magistrate, Bengaluru, wherein complaint filed under Section 29 read with Section 33 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Section 166 read with Section 120B of IPC came to be dismissed. 4
4. The brief facts are that the petitioners 1 and 2 availed home loan of Rs.10,00,000/- from respondent No.1 and thereafter they became defaulters and respondent No.1 initiated proceedings under The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as `Act' for short). The respondent-Bank contends that it initiated proceedings in accordance with the provisions contemplated under the Act. However the petitioners claim that no notice under Section 13(4) was issued to them and proceedings were conducted without their knowledge and hence not bound by the same. More over it is prime contention that contravention of mandatory formalities as contemplated under Section 13(4) amounts to offence punishable under Section 29 of the Act.
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5. They also claimed that the act of respondent- bank amounted to offence punishable under Section 120B and 166 of IPC.
6. Learned counsel for petitioners would submit that the learned Magistrate has unnoticed the prime contention of the petitioners and has considered appeal before the DRT as the remedy which infact is not correct. Further the petitioners would have got opportunity had notice was given as they would have substantiated their stand and they had good case on merits.
7. Learned counsel submits the order passed by the learned Magistrate is otherwise in ignorance of statutory provisions and is not proper as it is against the provisions of the Act.
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8. Learned counsel for respondent No.1 Sri.K.V.Lokesh would submit the petitioners have not made out grounds for making out a case against respondent No.1.
9. Before adverting to the contention and other aspects it is necessary to mention Section 29 of the Act which is as under:
Section 29 -Offences-- If any person contravenes or attempts to contravene or abets the contravention of the provisions of this Act or of any rules made thereunder, he shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with both.
10. The said provision of law relates to offence which related to contravention of the provisions of the Act. The offence according to the petitioners is non 7 issuance of notice under Section 13(4) of the Act before considering Section 13(4) it is necessary to glance sub-section (2) of the said Act which is as under:
Section 13 (2) - Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4).
[Provided that --(i) the requirement of classification of secured debt as non- performing asset under this sub-section 8 shall not apply to a borrower who has raised funds through issue of debt securities; and
(ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the debenture trustee.] (4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:--
(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;9
[(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset:
Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt:
Provided further that where the management of whole, of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt;]
(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor;10
(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.
11. In the event of debt to be transformed to non performing asset (NPA) and the secured creditor may require borrower giving notice in writing to discharge the full liability within 60 days failing which the secured creditor shall be entitled to exercise all measures or any of the measures.
12. Insofar as Section 13(4) is concerned it is in respect of taking possession. The grievance of the petitioners is that they were not issued with the notice of initiation of proceedings or taking over possession. 11 Learned counsel for petitioners submit possession is taken over.
13. The petition is filed under Section 29 of the Act and the contents of the said provision of law is as under:
"Section 29. Offences:- If any person contravenes or attempts to contravene or abets the contravention of the provisions of this Act or of any rules made thereunder, he shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with both."
14. At this juncture, the independent reading of Section 29 of the Act would be incomplete as Section 30 of the said act is to be read along with Section 29 which is as under:
"Section 30. Cognizance of offences:- (1) No Court shall take cognizance of any 12 offence punishable under section 27 in relation to non-compliance with the provisions of section 23, section 24, or section 25 or under section 28 or section 29 or any other provisions of the Act, except upon a complaint in writing made by an officer of the Central Registry or an officer of the Reserve Bank, generally or specially authorized in writing in this behalf by the Central Registrar or, as the case may be, the Reserve Bank.
(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act."
15. It is submitted that the present position is possession was taken over, auction was conducted and property was sold in auction and the possession was taken over twelve years back. In the circumstances, I find there are no circumstances or 13 material placed before this court to proceed against respondent No.1.
16. Learned counsel for the petitioners would submit that the property was sold for Rs.1,00,000/- and learned counsel for respondent No.1 submits that the property was sold for Rs.23 lakhs on 30.11.2007.
17. There does not appear the element of offence by the respondent-Bank connecting the debt or liability of the petitioners.
18. To proceed against respondent No.1-Bank for the offence punishable under Section 29 of the Act, non issuance of the notice cannot be treated as offence. It appears that the petitioners have not come up with full material facts and petition is devoid 14 of merits and does not require further proceedings. Accordingly, the same stands rejected.
Sd/-
JUDGE SBN/HJ