Bombay High Court
Housing Development Finance ... vs The District Magistrate, Washim, And ... on 26 July, 2016
Author: B.P. Dharmadhikari
Bench: B.P. Dharmadhikari
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH
WRIT PETITION NO. 5195 OF 2015
Housing Development Finance
Corporation Limited (HDFC Ltd.)
A company registered under the
Companies Act, 1956, and a
Financial Institution within the
meaning of sub-clause (iv) of clause
(m) of sub-section (1) of Section 2
of the Securitization & Reconstruction
of Financial Assets & Enforcement of
Security Interest Act, 2002, read with
Notification No.GSR S.O. 1282 (E)
dated 10/11/2003 issued by the
Government of India, Department of
Economic Affairs (Banking Division)
having its Head Office at Ramon
House, H.T. Parekh Marg, 169, Backbey
Reclamation, Church Gate, Mumbai -
400 020 and having branches all over
India including one at HDFC House,
Pandit Ravi Shankar Shukla Marg,
VIP Road, Civil Lines, Nagpur 440 001
acting through its Authorized Officer
Shri Raj s/o Shankar Mahadik. ... PETITIONER
Versus
1. The District Magistrate,
Washim.
2. Shri Radheshyam s/o Champalal
Panpalia, aged about - Major,
occupation - Service, r/o Plot
No. 63, Gat No. 202, Near
Santoshi Mata Mandir, Shelu Phata,
Malegaon, Washim.
3. Smt. Sunita w/o Radheshyam
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Panpalia, aged about - Major,
occupation - Service, r/o Plot
No. 63, Gat No. 202, Near
Santoshi Mata Mandir, Shelu
Phata, Malegaon, Washim. ... RESPONDENTS
Shri A.T. Purohit, Advocate for the petitioner.
Shri N.S. Rao, AGP for respondent No. 1.
Shri V.P. Panpalia, Advocate for respondent Nos. 2 & 3.
.....
ig CORAM : B.P. DHARMADHIKARI &
KUM. INDIRA JAIN, JJ.
JULY 26, 2016.
ORAL JUDGMENT : (PER B.P. DHARMADHIKARI, J.)
Heard Shri Purohit, learned counsel for the petitioner, Shri Rao, learned AGP for respondent No. 1 and Shri Panpalia, learned counsel for respondent Nos. 2 & 3, for sometime.
2. The question is, whether the impugned order dated 13.02.2015 passed by the District Magistrate, Washim, in Case No. 3 of 2014 is in accordance with the Scheme of Section 14 of the Securitization And Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI Act).
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3. We have perused that order. Respondent No. 1 -
District Magistrate has found that secured creditor did not produce before it document creating security interest in its favour. Thereafter, on account of confusion about identity of property, he has attempted to obtain report of the Tahsildar and the Tahsildar has mentioned that Plot No. 62 is not in existence. However, Respondent No. 1 has taken note of the fact that copy of sale deed is made available by the secured creditor on record.
4. Shri Purohit, learned counsel, has relied upon Division Bench judgment of this Court in the case of M/s. Trade Well & Anr. vs. Indian Bank & Anr., reported at 2007 ALL MR (Cri) 1357, to urge that under Section 14 of the SARFAESI Act, Respondent No. 1 has got very limited jurisdiction. According to him, once valid notice under Section 13(2), compliance with Section 13(4) and proper initiation of proceedings under Section 14 of the SARFAESI Act is established, the further adjudication under Section 14 is not permitted. He further states that a perusal of order sheet itself shows that all relevant ::: Uploaded on - 28/07/2016 ::: Downloaded on - 30/07/2016 00:23:49 ::: wp5195.15 4 documents were produced/ supplied by the petitioner. He is relying upon the stipulation on these lines in the order sheet dated 12.09.2014 maintained by the District Magistrate.
5. Shri Rao, learned AGP relies upon the reply affidavit and submits that the document creating security was never furnished as there was dispute about the identity of the property. The sale deed does not contain any plot number, therefore, Respondent No. 1 asked the Tahsildar to visit the spot and to submit his report.
6. Shri Panpalia, learned counsel for the borrowers, adopts the arguments of the learned AGP. He further adds that as plot No. 62 has never been subjected to any security, notice about said plot under Section 13(2) or further proceedings about it under SARFAESI Act are not maintainable. He also states that Respondent No. 1 has rightly found that the present respondents have not created any security on any immovable property in favour of the petitioner.
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7. It is apparent that though while exercising jurisdiction under Section 14 of the SARFAESI Act, no adjudication as such is possible, the secured creditor has to satisfy the office of Respondent No. 1 that it has complied with necessary terms and conditions including service of valid notice and the fact that it is proceeding against the secured assets. The Division Bench judgment in the case of M/s. Trade Well & Anr.
vs. Indian Bank & Anr., (supra), in para 19(3) also contemplates verification by the Collector about location of secured assets within his jurisdiction. If this is to be ascertained, it is apparent that Respondent No. 1 must be satisfied about the description and identity of secured assets.
8. Shri Purohit, learned counsel submits that here security has been created by deposit of title deeds. Hence, production of sale deed before Respondent No. 1 is sufficient to show creation of security. He further contends that availment of loan by Respondent Nos. 2 & 3 is also not in dispute.
9. A copy of sale deed produced before this Court ::: Uploaded on - 28/07/2016 ::: Downloaded on - 30/07/2016 00:23:49 ::: wp5195.15 6 dated 31.03.2003 shows that a piece of land at Mz. Malegaon Pragna, Shirpurta, District - Washim out of Survey No. 63, Gat No. 202, forms its subject matter. Its length East-West and North South with area and boundaries is given. On South the said piece is bound by the land of vendor Radheshyam Gattani.
No plot number as such has been mentioned. Whether this sale deed has been deposited by the borrowers with the petitioner for creating security and the piece of land on the basis of description therein is identifiable or not, were the issues to be looked into by Respondent No. 1.
10. Respondent No. 1 has given liberty to the petitioner to proceed further with recovery by issuing fresh notice to the non-applicant, after due verification of mortgaged property.
11. As availment of loan by Respondent Nos. 2 & 3 is not in dispute, they also attempted to demonstrate before this Court their readiness and willing to pay the balance amount.
12. We find that secured creditor needs to be given ::: Uploaded on - 28/07/2016 ::: Downloaded on - 30/07/2016 00:23:49 ::: wp5195.15 7 proper opportunity to point out the scope of jurisdiction available to Respondent No. 1 in such matters and also to explain the implication flowing out of production of said sale deed by it before the Collector. Hence, without observing anything on merits of the controversy either way, we set aside the impugned order dated 13.02.2015. We direct the parties to appear before Respondent No. 1 on 11.08.2016. Respondent No. 1 shall, after taking note of fetters placed upon its jurisdiction, attempt to find out the correct position within next eight weeks and pass suitable orders afresh.
13. With these directions, we partly allow the present petition and dispose it of. However, there shall be no order as to costs.
JUDGE JUDGE
******
*GS.
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C E R T I F I C A T E
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