Allahabad High Court
Bank Of Baroda vs District Magistrate Maharajganj And 4 ... on 18 February, 2022
Bench: Surya Prakash Kesarwani, Jayant Banerji
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No.3 Case :- WRIT - C No. - 1755 of 2022 Petitioner :- Bank Of Baroda Respondent :- District Magistrate Maharajganj And 4 Others Counsel for Petitioner :- Shashi Bhushan Singh Counsel for Respondent :- C.S.C. Hon'ble Surya Prakash Kesarwani,J.
Hon'ble Jayant Banerji,J.
1. Heard Shri Shashi Bhushan Singh, learned counsel for the petitioner and Shri B.P. Singh Kachhawaha, learned Standing Counsel for the State-respondents.
2. When the case was listed on 10.02.2022, the following order was passed :-
"Heard Shri Shashi Bhushan Singh, learned counsel for the petitioner and the learned Standing Counsel for the respondent-State.
This writ petition has been filed by the bank praying for the following reliefs:-
"(i) Issue a writ, order or direction in the nature of mandamus commanding the Respondent no.1/District Magistrate, Maharajganj to decide the application dated 15.04.2017 bearing case no.289 of 2017 and computerised case no D 201705470289 titled as "Manager Dena bank Gorakhpur vs. Maya Devi and others" preferred by the petitioner bank, U/Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as the statutory time period has elapsed much back; and
(ii) Issue in favour of the petitioner any other writ, order or direction which this Hon'ble Court may deem just and proper in the circumstances of the case as also in the interest of justice."
In Writ-C No.7126 [Indian Bank (Erstwhile Allahabad Bank) vs. State Of U.P. and 4 Others], a coordinate Bench of this Court passed the following order on 24.08.2021:-
"Heard Shri Habib Ahmad, learned counsel for the petitioner and Shri B.P. Singh Kachhawah, learned Standing Counsel for the State.
This petition has been filed by the Bank seeking a direction in the nature of mandamus for timely conclusion of the proceedings under Section 14 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as an 'SARFAESI Act') being Case No. 3878 of 2018 (Allahabad Bank vs. Sushmita Srivastava and others).
Submission of learned counsel for the petitioner is that the proceedings under Section 13 of the Act had been concluded on 24.11.2017. Thereafter, the petitioner had filed an application dated 23.01.2018 under Section 14 of the Act before the District Magistrate, Gorakhpur to secure the physical possession of the secured asset, but the same has remained pending for more than three and a half years. He further submits that the first proviso to Section 14 of the SARFAESI Act clearly provides a time period of 30 days for concluding those proceedings. In any case, the second proviso thereto provides for an extension of that time period to 60 days, for reasons recorded in writing. That being the clear mandate of the law, all efforts should be made by the concerned to ensure strict compliance, so that the proceedings under Section 14 of the Act are concluded, within a period of 60 days from the date of filing of such application.
While the Act requires recording of reasons beyond delay of 30 days, we feel that in the event of delay beyond 60 days, the matter should be monitored by the concerned District Magistrate. The reasons for delay should be regularly examined and necessary directions issued in writing to ensure full/effective compliance of the law.
The Apex Court in C.Bright vs. The District Collector & Ors. 2020 AIR SC 5747 has held as under:-
"20. The Act was enacted to provide a machinery for empowering banks and financial institutions, so that they may have the power to take possession of secured assets and to sell them. The DRT Act was first enacted to streamline the recovery of public dues but the proceedings under the said Act have not given desirous results. Therefore, the Act in question was enacted. This Court in Mardia Chemical, Transcore and Hindon Forge Private Limited has held that the purpose of the Act pertains to the speedy recovery of dues, by banks and financial institutions. The true intention of the Legislature is a determining factor herein. Keeping the objective of the Act in mind, the time limit to take action by the District Magistrate has been fixed to impress upon the authority to take possession of the secured assets. However, inability to take possession within time limit does not render the District Magistrate Functus Officio. The secured creditor has no control over the District Magistrate who is exercising jurisdiction under Section 14 of the Act for public good to facilitate recovery of public dues. Therefore, Section 14 of the Act is not to be interpreted literally without considering the object and purpose of the Act. If any other interpretation is placed upon the language of Section 14, it would be contrary to the purpose of the Act. The time limit is to instill a confidence in creditors that the District Magistrate will make an attempt to deliver possession as well as to impose a duty on the District Magistrate to make an earnest effort to comply with the man- date of the statute to deliver the possession within 30 days and for reasons to be recorded within 60 days. In this light, the remedy under Section 14 of the Act is not rendered redundant if the District Magistrate is unable to handover the possession. The District Magistrate will still be enjoined upon, the duty to facilitate delivery of possession at the earliest."
Since, large number of matters are coming up before this Court on regular basis, wherein, repeatedly banks are seeking directions of this Court to conclude the proceedings under Section 14 of the Act, we find that the trend thus developing runs against the statutory scheme as explained by the Supreme Court in the decision of C.Bright (Supra).
Accordingly, we dispose of the writ petition with a direction that the instant proceedings be concluded necessarily within a period 30 days' unless there is any legal impediment in the nature of any stay order obtained by the competent court.
In view of large number of petitions coming up before this Court, we issue a direction to all the District Magistrates in the State of U.P. to keep a record/register of all the pending applications filed under Section 14 of the Act that may clearly disclose to the District Magistrate (on a fortnightly basis) details of all institutions of such applications made in that district and their disposal within that time.
The said register may be duly inspected by the District Magistrate from time to time and also countersigned by him. Based on the entries recorded in such register, a quarterly report of all institution of applications filed under Section 14 of the Act together with the length of pendency of each application be sent to the Registrar General of this Court in the tabular form that may indicate the requirement of the Act is being fulfilled, in letter and spirit, who shall place the same before the appropriate Committee dealing with the functioning of the Debt Recovery Tribunals and Debt Recovery Appellate Tribunals.
The above direction has become necessary because at present, it appears that generally the proceedings for obtaining actual physical possession are being delayed much beyond the time limit set by the statute. It creates avoidable litigation and defeats the very object of the Act.
Let a copy of this order be communicated by the Registrar General to the Chief Secretary, Government of Uttar Pradesh for further intimation and compliance by all the District Magistrates in the State of U.P and the Debt Recovery Appellate Tribunal, Prayagraj. Also, let a copy of this order be placed before the appropriate Committee dealing with the functioning of the Debt Recovery Tribunals and Debt Recovery Appellate Tribunals."
We find that despite clear orders of this Court, the District Magistrates of different districts are not yet complying with the aforesaid directions. It appears that the Chief Secretary of the Government of Uttar Pradesh has also not taken any action to ensure compliance of the orders of this Court.
In view of the aforesaid, we direct the Chief Secretary of Uttar Pradesh to file his personal affidavit within one week from today and show cause for non-compliance of the statutory provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as well as the order of this Court in the case of Indian Bank (supra). The respondent no.1 is also directed to file counter affidavit within the same period.
Put up as a fresh case before the appropriate Bench on 18.02.2022."
3. A personal affidavit of the Chief Secretary, U.P. Lucknow dated 18.02.2022 and a counter affidavit on behalf of respondent no.1/District Magistrate, Maharajganj dated 18.02.2022 have been filed today, which are taken on record. Learned Standing Counsel has also produced before us instructions of the Additional Chief Secretary, Home, dated 14.02.2022, which is kept on record.
4. Shri Durga Shanker Mishra, Chief Secretary, Uttar Pradesh, Lucknow in his personal affidavit has stated as follows:-
"5. That, it is most respectfully submitted that in compliance of the order dated 24-08-2021 passed by this Hon'ble Court in Writ Petition No.(C) No.7126/2021 Indian Bank (Allahabad Bank) Vs. State of U.P. and others, the Secretary, Finance (Institutional) Govt. of U.P. Lucknow, vide Government Order No.-533B/V.(San.) Anu.-35-2020-21 dated 13.09.2021 has issued directions to all the District Magistrate of the Uttar Pradesh to this effect to decide all the pending matters, filed under Section 14 of the SARFAESI Act, 2002, within 30 days (if there is no legal obstruction of any kind) on priority basis by running a special campaign. For kind perusal of this Hon'ble Court, the copy of the Government Order dated 13.09.2021 issued by the Secretary, Finance (Institutional) U.P. Govt. Lucknow is being filed herewith and marked as ANNEXURE NO.1 to this affidavit.
6. That, it is further most respectfully submitted that in compliance of the order dated February 10, 2022 passed by Hon'ble Court in Writ Petition No. 1755/2022 Bank of Baroda Versus District Magistrate Maharajganj and others, again the Finance Department has Government Order No.41 B/V.(San.) Anu-35-2021 dated 11 February, 2022, wherein direction have been issued to all the District Magistrates, Uttar Pradesh and others to ensure strict compliance of earlier Government Order dated 13.09.2021 issued by the Secretary Finance (institutional) Govt. of U.P. Lucknow in compliance of the order dated 24.08.2021 passed by this Hon'ble Court in WRIT PETITION (C) No.7126/2021 Indian Bank (Allahabad Bank) Vs. State of Uttar Pradesh and others. For kind perusal of this Hon'ble Court, the copy of the Government Order dated 11.02.2022, issued by the Finance Department is being filed herewith and marked as ANNEXURE NO.2 to this affidavit."
5. Annexure-1 to the aforequoted affidavit is reproduced below:-
"संख्या-533 बी०/ वि०(सं०) अनु०-35-2021 प्रेषक, संजय कुमार, सचिव, उ०प्र० शासन।
सेवा में,
1. समस्त जिलाधिकारी, उत्तर प्रदेश।
2. ऋण वसूली अपीलीय न्यायाधिकरण, प्रयागराज l वित्त (संस्थागत) अनुभाग-35 लखनऊ: दिनांक: 13 सितम्बर, 2021 विषय- सिक्योरिटाइजेशन एंड रिकंस्ट्रक्शन ऑफ फाइनेंशियल एसेट्स एंड एनफोर्समेंट ऑफ सिक्योरिटी इंटरेस्ट एक्ट (सरफेसी अधिनियम) 2002 की धारा-14 के तहत कार्यवाही किए जाने के सम्बन्ध में।
महोदय, उपर्युक्त विषयक स्थायी अधिवक्ता मा० उच्च न्यायालय, इलाहाबाद के पत्र सं०-सिविल/डब्ल्यू 4317सी दिनांक 02.09.2021 (छायाप्रति संलग्न) का कृपया संदर्भ ग्रहण करने का कष्ट करें, जिसके माध्यम से मा० उच्च न्यायालय, इलाहाबाद द्वारा पारित निर्णय दिनांक 24.08.2021 के क्रम में समस्त जिलाधिकारियों के साथ-साथ ऋण वसूली अपीलीय न्यायाधिकरण को सरफेसी अधिनियम-2002 की धारा-14 के तहत दिशा-निर्देश जारी किए जाने के निर्देश दिये गये हैं l 2- अतः इस सम्बन्ध में मुझे यह कहने का निर्देश हुआ है कि कृपया अपने-अपने जिलों में मा० उच्च न्यायालय, इलाहाबाद के आदेश दिनांक 24.08.2021 के क्रम में सरफेसी अधिनियम-2002 की धारा-14 के तहत दायर सभी लम्बित प्रकरणों पर विशेष अभियान चलाकर प्राथमिकता के आधार पर 30 दिनों (यदि किसी प्रकार की कोई कानूनी/विधिक बाधा न हो तो) के अन्दर निस्तारित करने की कार्यवाही सुनिश्चित कराने का कष्ट करें।
संलग्नकः यथोक्त। l भवदीय, (संजय कुमार) सचिव ।"
6. In the counter affidavit filed on behalf of the respondent no.1/District Magistrate, Maharajganj by Shri Vivekanand Dubey, posted as Naib Tehsildar, Nautanwa, District Maharajganj, it has been stated that on 04.05.2017, the file was transferred by the respondent no.1 to the Additional District Magistrate (Finance & Revenue), Maharajganj for 'expedite' disposal, which has been decided on 14.02.2022. It has further been stated that during pendency of the case in the court of the Additional District Magistrate (Finance & Revenue) Maharajganj, the debtor has filed Writ-C No.22486 of 2017 in which, by an order dated 22.05.2017, the debtor was directed to pay the outstanding amount of the bank in four installments, i.e. 30.06.2017, 31.10.2017, 28.02.2018, 30.06.2018. It is stated that no amount was paid by the borrower on the said dates. It is further stated that due to COVID-19, the judicial work was suspended in the last years. A copy of the order dated 14.02.2022 passed by the Additional District Magistrate (F & R) Maharajganj as well as the copy of the judgment and order dated 22.05.2017 passed in Writ-C No.22486 of 2017 have been enclosed with this counter affidavit.
7. The enclosures to the personal affidavit of the Chief Secretary reveal that a Government Order dated 13.09.2021 was issued by the Secretary, Government of Uttar Pradesh directing all the District Magistrates of Uttar Pradesh to decide all the pending cases under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short 'SARFAESI Act') within 30 days (in case there is no legal impediment to the same) pursuant to the judgment dated 24.08.2021 passed by this Court. Further, the second enclosure is another Government Order issued by the Special Secretary to the Government of U.P. dated 11.02.2022 to all the District Magistrates directing strict compliance of the Government Order dated 13.09.2021 issued pursuant to the judgment and order dated 24.08.2021 passed in Writ-C No.7126 of 2021.
8. The judgment of this Court dated 24.08.2021 has already been quoted above. A specific direction has been issued to all the District Magistrates of the State to keep a record/register of all the pending applications filed under Section 14 of the SARFAESI Act that may clearly disclose to the District Magistrate (on a fortnightly basis) details of all institutions of such applications made in that district and their disposal within time. Further directions in the judgment are as follows:-
"The said register may be duly inspected by the District Magistrate from time to time and also countersigned by him. Based on the entries recorded in such register, a quarterly report of all institution of applications filed under Section 14 of the Act together with the length of pendency of each application be sent to the Registrar General of this Court in the tabular form that may indicate the requirement of the Act is being fulfilled, in letter and spirit, who shall place the same before the appropriate Committee dealing with the functioning of the Debt Recovery Tribunals and Debt Recovery Appellate Tribunals."
9. There is nothing on record to demonstrate that the District Magistrates are maintaining record/registers and are monitoring the disposal of applications filed under Section 14 of the SARFAESI Act. The counter affidavit filed on behalf of the District Magistrate in the case in hand reflects that by an order dated 22.05.2017, this Court in Writ-C No.22486 of 2017 directed further proceedings against the respondent no.2 to be kept in abeyance with liberty to deposit the demanded amount with up-to-date interest with four equal installments with the last installment to be paid by 30.06.2018. It has nowhere been stated in the counter affidavit that the application under Section 14 of the SARFAESI Act could not be disposed of by the authority concerned for want of information regarding non-compliance of the aforesaid judgment and order dated 22.05.2017 passed by this Court in Writ- C No.22486 of 2017. Rather, it has been stated that due to COVID-19, the judicial work was suspended in the last years.
10. Such a conduct by the authority, charged with deciding/disposing of the applications filed under Section 14 of the SARFAESI Act, cannot but be said to be action taken pursuant to the order dated 10.02.2022 passed by this Court in the present writ petition. It is evident that the Government Order dated 13.09.2021, that has been enclosed as Annexure-1 to the personal affidavit filed by the Chief Secretary has been neglected by the respondent-authority/the authority seized of the case under Section 14 of the SARFAESI Act.
11. This Court is dealing with several writ petitions every week being filed by secured creditors seeking directions to the District Magistrate for deciding applications under Section 14 of the SARFAESI Act.
12. Under the circumstances, it is for the Chief Secretary of the State to take a serious look at the state of affairs and ensure compliance of the judgment and order dated 24.08.2021 passed by this Court as well as the Government Orders issued by the Government itself and take suitable action for violation of the same. We also direct the Chief Secretary of State of Uttar Pradesh to also ensure compliance of those directions in the judgment dated 24.08.2021 which are highlighted in bold letters above.
13. Learned counsel for the petitioner-bank has submitted that in view of the counter affidavit filed on behalf of the District Magistrate, the cause of action does not survive.
14. Therefore, subject to the directions made above for appropriate action by the Chief Secretary of the State of Uttar Pradesh, this writ petition is disposed of.
Date :18.02.2022 SK