Madras High Court
Asset Reconstruction Company (India) ... vs The District Collector Cum Magistrate on 5 July, 2018
Bench: S.Manikumar, Subramonium Prasad
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 05.07.2018 CORAM: THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MR.JUSTICE SUBRAMONIUM PRASAD W.P.No.16530 of 2018 Asset Reconstruction Company (India) Limited, Represented by its Manager and Power of Attorney Holder, Mr.Yuvika Singh, The Ruby, 10th Floor, No.29, Senapathi Bapat Marg, Dadar (W), Mumbai - 400 028. ... Petitioner vs. 1. The District Collector cum Magistrate, Tiruvallur Collectorate, Tiruvallur - 602 001. 2. Ramanasekhar Steels Limited, Represented by its Managing Director, 3. Mr.A.Sreekanth 4. Mr.A.Ramanasekhar 5. Mr.A.Sureshkumar ... Respondents WRIT Petition filed under Article 226 of the Constitution of India, praying for the issuance of a writ of Mandamus, directing the first respondent to forthwith consider and pass appropriate and necessary orders in the petitioners petition bearing reference number 6069/2016/M2 filed on 11.03.2016 before the first respondent under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, within such time frame as this Honourable Court. For Petitioner : Mr.V.V.Sivakumar For Respondents : Mr.N.Manikandan (for R1) Government Advocate ORDER
(Order of the Court was made by S.MANIKUMAR, J) Seeking assistance, for taking physical possession, Assets Reconstruction Company (India) Limited, has filed petition dated 11.03.2016, under Section 14 of the SARFAESI Act, 2002, before the District Collector cum District Magistrate, Thiruvallur District, the 1st respondent herein.
2. According to the petitioner, though, the said petition is taken on file by the 1st respondent, the same is pending for nearly fifteen months. Left with no other alternative, instant writ petition has been filed for a mandamus, directing the 1st respondent, to pass orders on the petition bearing reference No.6069/2016/M2 dated 11.03.2016 filed under Section 14 of the SARFAESI Act, within such time frame to be fixed by this Court.
3. Respondent Nos.2 to 5, are borrowers/guarantors. As the District Collector cum Magistrate, Thiruvallur District, the 1st respondent is bound to pass orders on the application, we are of the view that there is no need to issue notice to respondent Nos.2 to 5. Hence, notice to respondent Nos.2 to 5, is waived.
4. On this day, when the writ petition came up for admission, on instructions, Mr.N.Manikandan, learned Government Advocate submitted that orders are yet to be passed in the application filed under Section 14 of the SARFAESI Act, 2002. He prayed for four weeks time.
5. Heard the learned counsel appearing for the parties and perused the materials available on record.
6. Application dated 11.03.2016 filed under Section 14 of the SARFAESI Act, 2002, has been taken on record by the 1st respondent and vide Rc.No.6069/2016/M2 dated 24.06.2016 and he has directed the Tahsildar, Madhavaram, to submit a report, as hereunder.
Sir, Sub: SARFAESI Act 2002 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Petition Filed M/s.Asset Reconstruction Company (India) Ltd., - S.No.1132/2A - Extent of 38.50 Cents -
located at Madhavaram Village - Loan granted to M/s.Ramanasekahar Steels Ltd., - Defaultment on repayment of loan - taking possession of the secured assets
- Preliminary Report - Requested - Reg.
Ref: M/s.Asset Reconstruction Company (India) Ltd., application under SARFAESI Act, dt.11.03.2016.
****** M/s.Asset Reconstruction Company (India) Ltd., have approached the District Magistrate, praying the District Administration to take possession of the Scheduled mentioned Property under Securitization and Reconstruction of Financial Asset's and Enforcement of Security Interest Act 2002.
Schedule of the Property:
"All that piece and portion of land and factory building, at No.12, Big Street, Kanakkanchatram, Ponniammanmedu, Chennai-10, measuring about 38.50 cents or thereabouts, comprised in S.No.1132/2A, situated at Madhavaram Village and Taluk Tiruvallur District bounded on themselves Boundaries (measuring 38.50 cents) North by S.No.1132/1 (Vacant land) South by S.No.1132 (street) East by S.No.1133 & 1136 West by S.No.1198 (Big Street) Hence you are requested to check thoroughly the facts submitted by the petitioner Bank and physically verify all the original records by summoning the counsel for the Bank to produce the records and submit a detailed report, after inspection of the site, along with the Performa enclosed.
The original application received from the petitioner Bank is also enclosed and the same should be returned without fail. This exercise should be completed within 6 weeks from the date of receipt of this letter.
7. Section 14 of the SARFAESI Act, 2002 mandates that on receipt of an affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit, pass suitable orders for the purpose of taking possession of the secured assets, within a period of 30 days from the date of application. Proviso to the said Section states that if no order is passed by the Chief Metropolitan Magistrate or District Magistrate, within the said period of thirty days, for the reasons beyond his control, he may after recording reasons, in writing, for the same, pass the order within such also period but not exceeding in aggregate 60 days.
8. The Principal Secretary to Government, vide, Letter No.19498/Res.II/2014-1, dated 09.07.2014, has issued directions, stating that there should be speedy disposal of the application filed under Section 14 of the SARFAESI Act. The said letter is extracted hereunder:-
I am to invite your kind attention to the reference cited (copy enclosed) wherein the GM, SLBC, Chennai, has requested to advise the District Collectors (District Magistrates) for speedy disposal of applications filed by banks to assist in taking possession of securities of the defaulters charged to the banks under Section 14 of SARFAESI Act, 2002.
2. In this connection, I am to request you to take necessary action for speedy disposal of the applications filed by the banks in taking possession of securities of the defaulters charged to the banks under Section 14 of SARFAESI Act, 2002, without affecting the image of the administration.
9. Following the said letter, in W.P.No.7813 of 2016, dated 22.04.2016, a Hon'ble Division Bench of this Court, has passed the following order:-
In the light of the above, we direct the District Collector (District Magistrate), Thanjavur District, to pass orders on the Application dated 18/8/2015 in file Ref.No.34810/2015, filed under Section 14 of the SARFAESI Act, within the period of two months from the date of receipt of a copy of this order. While doing so, procedure set out under Section 14 of the Act should be followed. Mr.B.Kumar, learned Additional Government Pleader is directed to forward the copy of this order to the Principal Secretary to Government, Finance (Res.II), Department, Chennai for appropriate follow up action. 10. Along with the supporting affidavit, to the instant writ petition, the petitioner has also enclosed the copies of the petitions, dated 8/1/2014, 7/5/2014, 11/9/2014, 24/12/2014 and 31/1/2015, filed under Section 14 of the SARFAESI Act, 2002.
10. Further, the Secretary to Government, Finance (Res.II) Department vide, Letter No.32082/Fin/Res.II/2017, dated 03.08.2017, has issued directions to all District Collectors, stating that they are supposed to act on the SARFAESI Application within a period of 30 days for the purpose of taking possession by lending banks. The said letter is extracted hereunder:-
To All District Collector (w.e.) Sir / Madam, Sub: SARFAESI Act, 2002 - Action of District Collectors being Chief Metropolitan Magistrate / District Magistrate under Section 14, appropriate file action requested - Reg.
Ref: Letter received from the Zonal Manager of Indian Bank, Zonal Office - DDDC Building, 1st Floor, 91, Pennagaram Road, Dharmapuri - 636 701, dated 28.06.2017 addressed to the CS to Government of Tamil Nadu.
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I am to invite your attention to the reference cited received from the Zonal Manager, Indian Bank in connection with taking appropriate action under Section 14 of the SARFAESI Act, 2002.
2. As per Section 14 of the SARFAESI Act, 2002 the Authorised Officer of lending banks can approach the District Collectors being CMM/DM, by filing an application to take actual possession / Control over the property of the NPA. According to the Act, the District Collectors are supposed to act on that application within a period of 30 days for the purpose of taking possession by lending banks. Therefore, I am to request you to take immediate action as per the SARFAESI Act without any delay.
3. I am also to request you to acknowledge the receipt of this letter.
11. Placing on record the submission of the learned Government Advocate and in the light of the directions issued by the Principal Secretary to Government, vide, Letter No.19498/Res.II/2014-1, dated 09.07.2014, following the earlier order of this Court in W.P.No.7813 of 2016, dated 22.04.2016, and also the subsequent directions of the Secretary to Government, Finance (Res.II) Department vide, vide Letter No.32082/Fin/Res.II/2017, dated 03.08.2017, we direct, the District Collector cum District Magistrate, Thiruvallur District to dispose of the application bearing Reference No.6069/2016/M2 filed on 11.03.2016, if not done earlier, within a period of four weeks, from the date of receipt of a copy of this order. While doing so, District Collector cum District Magistrate, Thiruvallur District, should act in accordance with Section 14 of the SARFAESI Act, 2002
12. Further, Tahsildar, Madhavaram though, not a party to this writ petition, is directed to submit a report, if not done earlier, so as to facilitate the District Collector cum District Magistrate, Thiruvallur District, to pass orders as directed.
13. With the above direction, this writ petition is disposed of accordingly. No costs.
(S.M.K., J.) (S.P., J.) 05.07.2018 Index: Yes/No. Internet: Yes Speaking/Non speaking ars To The District Collector cum District Magistrate, Thiruvallur District.
S.MANIKUMAR,J.
AND SUBRAMONIUM PRASAD, J.
ars W.P.No.16530 of 2018 05.07.2018