Kerala High Court
The Federal Bank Limited vs Smt. Thahira on 14 December, 2009
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
MONDAY, THE 6TH DAY OF JUNE 2016/16TH JYAISHTA, 1938
WP(C).No. 39130 of 2015 (M)
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PETITIONER(S) :
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THE FEDERAL BANK LIMITED, VALLITHODE BRANCH,
REPRESENTED BY ITS AUTHORIZED OFFICER/CHIEF MANAGER,
ASSET RECOVERY BRANCH, KOZHIKODE.
BY ADVS.SRI.MOHAN JACOB GEORGE
SMT.P.V.PARVATHI
SMT.REENA THOMAS
SRI.T.K.NAVAS
RESPONDENT(S) :
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1. SMT. THAHIRA,
W/O.ABDUL NAZAR A.K., SHAIK PALACE, MUZHAKUNNU,
VILAKODE, KANNUR DISTRICT.
2. SRI.ABDUL NAZAR A.K.,
SHAIK PALACE, MUZHAKUNNU, VILAKODE,
KANNUR DISTRICT.
3. SUB INSPECTOR OF POLICE,
IRITTY POLICE STATION, KANNUR.
4. SUPERINTENDENT OF POLICE,
KANNUR.
R1 & R2 BY ADVS. SRI.ABU MATHEW
SRI.AJU MATHEW
SRI.ABHILASH MATHOOR
R3 & R4 BY GOVERNMENT PLEADER SMT.LILLY.K.T
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 06-06-2016, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
Msd.
WP(C).No. 39130 of 2015 (M)
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APPENDIX
PETITIONER(S)' EXHIBITS :
P1: COPY OF SECTION 13(2) DEMAND NOTICE ISSUED TO
THE RESPONDENTS 1 AND 2.
P2: COPY OF THE POSSESSION NOTICE DATED 14/12/2009.
P3: COPY OF SALE NOTICE DATED 08/11/2011.
P4: COPY OF THE JUDGMENT DATED 12/12/2011 IN W.P(C).NO.32957/2011.
P5: COPY OF THE ORDER DATED 31/10/2013 IN C.M.P NO.317/2013 OF CJM,
THALASSERY.
P6: COPY OF THE COMMISSION REPORT SUBMITTED BY THE ADVOCATE
COMMISSIONER DATED 13/05/2013.
P7: COPY OF THE INVENTORY PREPARED AT THE TIME OF TAKING
POSSESSION.
P8: COPY OF THE PANCHANAMA PREPARED FOR TAKING POSSESSION OF
THE PROPERTY.
P9: COPY OF THE CERTIFIED EXTRACT OF THE B-DAIRY IN
C.M.P NO.317/2013.
P10: COPY OF THE INTERIM ORDER OF STAY PASSED IN W.P(C).NO.9377/2014.
P11: COPY OF THE COMPLAINT DATED 14/05/2014 SUBMITTED TO
THE STATION HOUSE OFFICER.
P11(A): COPY OF ACKNOWLEDGEMENT OF THE COMPLAINT BY THE STATION
HOUSE OFFICER, IRITTY.
P12: COPY OF THE JUDGMENT DATED 20/06/2014 IN W.P(C).NO.9377/2014
PASSED BY THIS HON'BLE COURT.
P13: COPY OF THE PETITION FILED AS C.M.P 215/2015 BEFORE THE CJM,
THALASSERY.
P14: COPY OF THE ORDER DATED 14/01/2015 PASSED BY THE CJM,
THALASSERY.
RESPONDENT(S)' EXHIBITS : NIL
//TRUE COPY//
P.A.TO JUDGE.
Msd.
A.M. SHAFFIQUE, J.
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W.P.(C) No.39130 of 2015
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Dated this the 6th day of June, 2016
JUDGMENT
Petitioner has approached this Court challenging Ext.P14, an order passed by the Chief Judicial Magistrate, Thalassery, dismissing an application under Section 14 of the SARFAESI Act, 2002. The petitioner also seeks for a direction to implement Ext.P5 by directing the respondent 3 and 4 to remove respondents 1 and 2 from the secured asset of the Bank and hand over vacant possession of the same to the petitioner.
2. The facts involved in the writ petition would disclose that the petitioner Bank had taken proceedings against respondents 1 and 2 under the SARFAESI Act, when they committed default in payment of the dues. According to the Bank, symbolic possession of the secured asset was taken by affixture of notice, as evident from Ext.P2 dated W.P.(C) No.39130 of 2015 -2- 14.12.2009.
3. Though respondents 1 and 2 approached this Court challenging the sale notice published by the petitioner, this Court granted installment facility to respondents 1 and 2 to repay the loan amount in installments since respondents 1 and 2 committed default. Pursuant to the same, the petitioner approached the Chief Judicial Magistrate, Thalassery under Section 14(1) of SARFAESI Act and as per order dated 31.10.2013, an Advocate Commissioner was appointed to take possession of the secured assets and submit a report. Ext.P5 is the said order. According to the petitioner, pursuant to Ext.P5, possession was taken by the Advocate Commissioner and it was handed over to the petitioner Bank. Bank also had posted a security guard in the aforesaid property. Ext.P6 is the report of the Advocate Commissioner dated 13.5.2013 and an inventory was taken and panchanama was prepared and the matter was closed by the Chief Judicial Magistrate as per order dated 13.5.2014. According to the Bank, physical W.P.(C) No.39130 of 2015 -3- possession was taken on 23.4.2014.
4. It is submitted that on the very same day, the security guard engaged by the Bank reported that the locks and seal were broken and a complaint was filed before the police. Thereafter, respondents 1 and 2 filed W.P.(C) No.9377 of 2014 and an interim stay was obtained for three months. Ext.P10 is the order. Pursuant to the stay order, respondents 1 and 2 forcefully entered into the property, threatening the security personnel and showing the stay order obtained from the Court and trespassed into the building and occupied the same. Though a complaint has been given to the police, no action has been taken in the matter. On 20.6.2014, W.P.(C) No.9377 of 2014 had been dismissed. Thereafter, the Bank filed an application before the Chief Judicial Magistrate for re-opening the petition and to issue directions to the Superintendent of Police for extending necessary police protection. But the same was dismissed by Ext.P14. It is at this stage that the petitioner has approached this Court. W.P.(C) No.39130 of 2015 -4-
5. The learned counsel appearing for respondents 1 and 2 submits that the Chief Judicial Magistrate was justified in rejecting the application filed for re-opening the matter under Section 14(1) of SARFAESI Act. It is submitted that respondents 1 and 2 remained in possession of the property and if at all the petitioner wants to dispossess respondents 1 and 2, the remedy is to approach the Civil Court and cannot have a second right to invoke Section 14 (1) of the SARFAESI Act.
6. The learned counsel for the petitioner however submits that the possession had already been taken in terms of Ext.P5, which is evident from the Advocate Commissioner's report Ext.P6. Subsequently, if they trespassed into the property, the police authorities are bound to ensure that the rule of law is maintained and respondents 1 and 2 are evicted from the said premises. Petitioner submits that when the complaint was given in terms of Ext.P11, no action had been taken by the police.
W.P.(C) No.39130 of 2015 -5-
7. Having heard the learned counsel on either side and having perused the records, I am of the view that this is a typical case by which the rule of law has been completely negated by the action of respondents 1 and 2. When a statutory right had been given to the petitioner Bank to take possession of the premises and if necessary, with the assistance by the Chief Judicial Magistrate in terms of Section 14 of the Act, when possession is taken through the said process, possession has to remain with the Bank itself, unless there is any change in circumstances by which the Bank permits respondents 1 and 2 to retain possession or possession is given back. No such eventuality had happened in the case. This is a clear case that respondents 1 and 2 had trespassed into the property, which is taken possession by invoking a legally accepted method. In the said circumstances, when the matter has been brought to the notice of the Chief Judicial Magistrate, the Magistrate ought to have taken further steps pursuant to Section 14 itself. Such W.P.(C) No.39130 of 2015 -6- an inaction has led to situation of travesty of justice. If such illegalities are permitted to continue, it will amount to giving a premium to high handedness. This Court therefore has to ensure that such violations are rectified, and rule of law prevails. Therefore, I am of the view that the learned Chief Judicial Magistrate failed to exercise jurisdiction in the matter. The finding of the Chief Judicial Magistrate that the possession of the secured asset was already handed over to the petitioner and thereafter, it is for the Bank to protect its possession, I do not think, was justifiable in the facts of the present case. The assistance of the Court is taken for the purpose of restoring possession and thereafter, if a borrower trespassed into the property, it cannot be said that the power of the Magistrate is denuded in any form. Section 14 of the Act reads as under:
"14. Chief Metorpolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset. - (1) Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of W.P.(C) No.39130 of 2015 -7- this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metorpolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him -
(a) take possession of such asset and documents relating thereto; xxx [(1A) The District or the Chief Metropolitan Magistrate may authorise any officer subordinate to him,-
(i) to take possession of such assets and documents relating thereto; and
(ii) to forward such assets and documents to the secured creditor.] (2) For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary.
(3) No act of the the Chief Metropolitan Magistrate or the District Magistrate [any officer authorised by the Chief Metropolitan Magistrate or District Magistrate] done in pursuance of this section shall be called in question in any court or before any authority."
W.P.(C) No.39130 of 2015 -8-
Going by the same statutory provision, there is no impediment for the Chief Judicial Magistrate to exercise the power, especially in the light of Section 14 (2). Therefore, Ext.P14 to that extent, it is unsustainable. It is always open for the Magistrate to take note of the factual circumstances involved in the matter and to pass appropriate orders to ensure that the statutory right of the petitioner Bank is protected.
8. Coming to the facts of the case, I am of the view that though the Magistrate had not exercised powers, it shall always open for this Court to ensure that the illegality committed by respondents 1 and 2 are rectified. I am satisfied that the possession was taken by the Bank, especially, in the light of Exts.P5 and P6. In the said circumstances, respondents 1 and 2 have no right or power to trespass over the property. Accordingly, there will be a direction to respondents 3 and 4 to forcefully remove respondents 1 and 2 or any other person from the building aforesaid and ensure W.P.(C) No.39130 of 2015 -9- that the possession is restored to the petitioner Bank. This shall be done within a period 15 days from the date of receipt of a copy of this judgment.
Sd/-
A.M. SHAFFIQUE JUDGE Scl/7.06.2016