Gujarat High Court
Varsani Construction Company vs Sundaram Finance Ltd & on 23 October, 2015
Bench: Jayant Patel, N.V.Anjaria
C/SCA/17671/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 17671 of 2015
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VARSANI CONSTRUCTION COMPANY....Petitioner(s)
Versus
SUNDARAM FINANCE LTD & 1....Respondent(s)
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Appearance:
ADITYA A GUPTA, ADVOCATE for the Petitioner
MR AR GUPTA, ADVOCATE for the Petitioner
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CORAM: HONOURABLE THE ACTING CHIEF JUSTICE MR.
JAYANT PATEL
and
HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 23/10/2015
ORAL ORDER
(PER : HONOURABLE THE ACTING CHIEF JUSTICE MR. JAYANT PATEL)
1. The petitioner of this petition is seeking challenge to the circular dated 24th April, 2009 issued by the Reserve Bank of India, whereby the Reserve Bank of India had issued certain clarification regarding repossession of the vehicles financed by the Non-Banking Financial Companies (hereafter to be referred to as "the NBFCs"). The petitioner is also seeking declaration that the respondent no.1 which is NBFC cannot repossess hypothecated assets without intervention of the Court. The petitioner has further prayed to declare that sale of the Page 1 of 5 HC-NIC Page 1 of 5 Created On Tue Oct 27 01:08:07 IST 2015 C/SCA/17671/2015 ORDER machines of the petitioner by respondent no.1 is invalid, illegal and null and void. The other consequential prayers made by the petitioner are to give full accounts etc. of the loan transaction of the petitioner.
2. We have heard Mr. Gupta, learned counsel appearing on behalf of the petitioner. The contention was that even if in the loan agreement there is express authority given by the loanee to the NBFC-the respondent no.1 herein, it is not open to respondent no.1 herein to invoke the said clause of the loan agreement without the intervention of the Court. He submitted that mainly the issue pertains to applicability of specific performance of contract and the public policy. He also submitted that without the intervention of the Court, the NBFC like respondent no.1 herein has neither any power to repossess nor has any power to sell the assets for realization of the loan. However, he fairly admitted that right of repossession is already exercised by the respondent no.1 and the machineries are also sold for which notices were issued by the respondent no.1 to the petitioner. It was submitted that Civil Suit No. 282 of 2015 was filed in the competent court, but the petitioner is ready to withdraw the said suit. He also drew our attention to the similar petition filed by the very petitioner being Special Civil Application No. 6572 of 2015 before this Court in respect to different transaction against another NBFC, namely, Srei Equipment Finance Pvt. Page 2 of 5 HC-NIC Page 2 of 5 Created On Tue Oct 27 01:08:07 IST 2015 C/SCA/17671/2015 ORDER Ltd.which came to be dismissed by this Court on 22.6.2015 against which the petitioner has carried the matter before the Apex Court by preferring Special Leave to Appeal No. 25810 of 2015 and the Apex Court has issued notice in the said matter by order dated 14.9.2015.
3. It was submitted that under these circumstances, this Court may interfere.
4. As such, it is an admitted position that in the transaction of loan agreement vide condition no.14.2, the following was provided:
"14.2 In the event of failure of the Borrower in complying with the demand in the said notice, the Borrower shall be bound to surrender the asset to the Lender at the cost of the Borrower at such location, as the Lender may designate, in the same condition in which it was originally delivered to the Borrower, ordinary wear and tear excepted, failing which, the Lender shall be entitled to seize the Asset wherever it is, without any further notice. The Borrower shall not prevent or obstruct the Lender from taking the possession of the Asset. For this purpose, the Lender's authorized representatives, employees, officers and agents will have unrestricted right of entry and shall be entitled to enter upon the premises, or garage, or godown, where the Asset shall be lying or kept, and to seize the Asset. In the event of the Borrower not cooperating, the Lender, if necessary, have the right to break open any such place where the Asset is believed to be kept and to seize the Asset. The Lender will be well within its rights to use tow-van or any carrier to carry away the Asset. The Borrower shall be liable to pay any towing charges and other such expenses incurred by the Lender in connection with the seizure of the Asset and for its sale etc."
5. It is also an admitted position that the loan agreement is entered into on 30.12.2011. At the time when the agreement was entered into, the circular of the Reserve Bank of India Page 3 of 5 HC-NIC Page 3 of 5 Created On Tue Oct 27 01:08:07 IST 2015 C/SCA/17671/2015 ORDER dated 24th April, 2009 was already issued and in operation. Inspite of the same, the petitioner, by its own volition, at the time when the loan is taken, entered into the agreement. If the matter is considered strictly on the discretion to be exercised while considering the matter under Article 226 of the Constitution, one can say that it would not lie in the mouth of the petitioner to challenge the said clause of the agreement for which by its own volition, the agreement was entered into and, therefore, the petitioner may not be entitled to invoke the writ jurisdiction of this Court under Article 226 of the Constitution.
6. The aforesaid is coupled with the additional aspect that for the very subject-matter, Civil Suit No. 282 of 2015 had been preferred, wherein, prayers made are for challenging the action of the respondent no.1 to take possession of the suit machinery and to sell the same without due process of law. The petitioner can also challenge the legality and validity of the circular in the said proceedings of the Civil Suit, if otherwise permissible in accordance with law. Under these circumstances, separate proceeding by invoking the writ jurisdiction of this Court may not be required to be entertained when for the very subject-matter, civil suit proceedings are also filed.
7. In view of the above, we find that the present petition does not deserve to be entertained and the same deserves to be dismissed. The aforesaid is coupled with the circumstances that Page 4 of 5 HC-NIC Page 4 of 5 Created On Tue Oct 27 01:08:07 IST 2015 C/SCA/17671/2015 ORDER for the similar prayer, the petitioner had also preferred another petition being Special Civil Application No. 6572 of 2015 against another NBFC which came to be dismissed by this Court vide order dated 22.6.2015, which is annexed as Annexure:L to the petition.
8. In view of the aforesaid both the aspects, we do not find any case is made out for interference. Hence, the petition is dismissed.
(JAYANT PATEL, ACJ.) (N.V.ANJARIA, J.) pirzada Page 5 of 5 HC-NIC Page 5 of 5 Created On Tue Oct 27 01:08:07 IST 2015