Bombay High Court
Iifl Home Finance Ltd vs The State Of Maharashtra And Anr on 3 August, 2022
Author: K.R. Shriram
Bench: K.R. Shriram
1/4 9-WPL-20297-2022.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
PURTI
PRASAD ORDINARY ORIGINAL CIVIL JURISDICTION
PARAB
Digitally signed by
PURTI PRASAD
PARAB
Date: 2022.08.10
WRIT PETITION (L) NO. 20297 OF 2022
10:54:46 +0530
IIFL Home Finance Limited ....Petitioner
V/s.
The State of Maharashtra and Anr. ....Respondents
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Ms. Hemal Bhanushali i/b Mr. R.L. Motwani for Petitioner.
Mr. L.T. Satelkar, AGP for Respondent No.1 - State.
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CORAM : K.R. SHRIRAM &
A.S. DOCTOR, JJ.
DATED : 3rd AUGUST 2022 P.C. :
1. In this petition, Ms. Bhanushali states that the Magistrate's order/letter dated 7th June 2022 is contrary to settled provisions of law in as much as Section 14 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act) is merely an enabling provision under Chapter III of the SARFAESI Act to enable a secured creditor to recover possession of the secured assets from a defaulting and non-cooperative borrower and the function of the relevant authority under Section 14 of the SARFAESI Act is purely ministerial and restricted to ensuring that the secured creditor has complied with the requirements as set out in Section 14 (1) (i) to (ix) of the SARFAESI Act. Ms. Bhanushali submitted that once the authority is satisfied that the requirements of Section 14 have been met and/or complied with, the authority has to proceed to take possession of the Purti Parab 2/4 9-WPL-20297-2022.doc secured assets. Ms. Bhanushali relied upon judgment of the Hon'ble Apex Court in NKGSB Cooperative Bank Limited vs. Subir Chakravarty and Ors.1, Kotak Mahindra Bank Ltd. and Ors. vs. The State of Maharashtra and Ors.2 and yet to be reported judgment of this court in Authorized Officer, I.D.B.I Bank Ltd. and Ors. vs. The State of Maharashtra and Anr.3
2. Mr. Satelkar stated that the law is very clear and there can be no issue on the submissions made by Ms. Bhanushali. Mr. Satelkar in fact went ahead to submit that in another matter which was disposed today namely Writ Petition No. 9090 of 2020 the same Magistrate had passed the similar order and therefore this court can pass the same order as was passed in Writ Petition No. 9090 of 2020. In the said Writ Petition the court was pleased to pass the following order :
1. Petitioner is impugning an order dated 7 th June 2022 passed by Respondent No.2 - District Magistrate, Pune.
According to Mr. Shroff the order goes totally contrary to settled law.
2. By the said order, Respondent No.2 has disposed the Securitization Application of petitioner on the pretext that the Police Commissioner, Economic and Cyber Crime Branch, Pune vide his order dated 26th November 2021 has directed submission of proposal to Home Department, Maharashtra regarding attachment of secured property as the borrowers and others have defaulted to return the deposits received from the depositors on maturity and against them C.R. No. 3/2021 has been filed under Section 406, 420 and Section 34 at Swargate Police Station, Pune City, under Sub Section (1) of Section 4, Section 5 and Section 8 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (Mah. 16 of 2000) (the MPID Act). Respondent No.2 in the 1 MANU/SC/0247/2022 2 MANU/MH/0877/2018 3 Civil Writ Petition No. 5055 of 2021 Purti Parab 3/4 9-WPL-20297-2022.doc impugned order has stated that therefore possession of the secured property cannot be taken for the time being. Mr. Shroff submitted that even in most recent judgment of this court in Civil Writ Petition No. 5055 of 2021 dated 19 th July 2022 (yet to be reported), this court has held that Section 14 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act) is only an enabling provision which comes into play only after the defaulting borrower has failed and/or neglected to discharge in full its liability to the secured creditor and is limited to providing assistance to the secured creditor to recover possession of secured asset against non-co-operative borrowers.
3. Ms. Bhide in fairness submitted that the law is quite clear on this subject and courts have held time and again what is the scope of Section 14 of the SARFAESI Act. We would therefore agree with Mr. Shroff that Respondent No.2 has not only transgressed the jurisdiction vested to him under Section 14 of the SARFAESI Act but had infact acted contrary to it. The jurisdiction vested under Section 14 of the SARFAESI Act is limited only to assisting a secured creditor in taking possession of the secured assets and nothing more. Section 14 does not contemplate, much less provide for any person to resist the taking of possession of the secured assets of the authorities so mentioned in Section 14 of the SARFAESI Act. The function of the relevant authority under Section 14 of the SARFAESI Act is purely ministerial and restricted to ensuring that the secured creditor has complied with the requirements as set out in Section 14 (1) (i) to (ix). Once the authority is satisfied that the requirements of Section 14 have been met and/or complied with, the authority has to proceed to take possession of the secured asset.
4. In the circumstances, since the issue involved is very narrow and a pure question of law, we hereby dispose the petition itself in terms of prayer clause - (a) which reads as under :
(a) That this Hon'ble Court may be pleased to issue the Writ of Mandamus or Writ in the nature of Mandamus or any other appropriate Writ, thereby directing the Respondent No.2 to restore the Securitisation Application dated 5th May, 2022 being Secu/SR/1896/2022 on the file of the Respondent No.2 and direct the Respondent No.2 to pass necessary orders within 30 days thereafter, as per the mandate of the SARFAESI Act.
5. The Securitization Application No.SECU/SR/1896/2022 is restored to file of Respondent No.2. Respondent No.2 shall Purti Parab 4/4 9-WPL-20297-2022.doc dispose the application within 30 days of receiving copy of this order.
6. Petition disposed.
3. Accordingly, petition stands disposed in terms of prayer clause
- (a) which reads as under :
(a) that this Hon'ble Court may be pleased to issue a Writ, Order or Direction, including a Writ in the nature of Mandamus directing the District Magistrate Pune, to dispose of the Petitioner's Application No. 1233 of 2022 in a time bound manner, within such reasonable period as this Hon'ble Court deem fit and proper.
4. Respondent No.2 is directed to dispose the application within six weeks of receiving copy of this order.
5. Petition disposed.
(A.S. DOCTOR, J.) (K.R. SHRIRAM, J.) Purti Parab