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(Passed on this 13th day of July, 2018) Per : Hemant Gupta, Chief Justice:

The challenge in the present writ appeal is to an order passed by the learned Single Bench on 11.04.2018 in Writ Petition No.8077/2017 (Shri Carnet Elias Fernandes Vemalayam and another vs. District Magistrate and others) whereby an order passed by the District Magistrate, Bhopal on 28.04.2017 under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the Act") has been set aside.

02. The sole reason for setting aside the order of the District Magistrate is that the Bombay High Court in Arbitration Petition No.1118/2015 (Aditya Birla Finance Limited vs. Mr. Carnet Elias Fernandes and another) has passed an order on 04.09.2015 to hand over the physical possession of the property to the Receiver in proceedings initiated by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act"). It was found that since symbolic possession of the property is with the Receiver, therefore, an order passed by the District Magistrate cannot override the order dated 04.09.2015 passed by the Bombay High Court. The relevant extract from the order dated 11.04.2018 (Annexure A-1) passed by the learned Single Bench, reads, thus:

04. Since the learned Single Bench has held that an order passed by the District Magistrate overrides the order of the Bombay High Court, whether such reasoning is legal and proper, needs to be examined.

05. The parties have entered into an agreement on 28.09.2012 whereby the appellant sanctioned loan of Rs.18.00 Crore to the writ petitioners (respondent Nos.1 and 2 herein). The stand of the writ-petitioners is that they faced an acute financial stress on account of an order of the Hon'ble Supreme Court cancelling the coal blocks and the Reserve Bank of India advised the Banks to curtail their exposures on power sector based industries. Thereafter, the writ-petitioners availed a housing loan from the appellant and that the appellant demanded the entire housing loan on 08.01.2015. The stand of the writ-petitioners is that though the agreement contemplated resolution of dispute at Bhopal but the appellant initiated arbitration proceedings in Mumbai by unilaterally altering the arbitration clause. The sole Arbitrator was appointed. The appointment of which was disputed by the writ-petitioners. However, the Arbitrator announced the Award on 05.10.2016 holding the writ-petitioners jointly and severally liable to pay to the appellant a sum of Rs.23,65,07,643/- together with interest thereon @ 12.5% per annum from 01.04.2015 till the date of payment/realization of the amount by the appellant/claimant from the writ-petitioners. The writ-petitioners have filed a petition (Annexure P-6 to the writ petition) under Section 34 of the Arbitration Act, which is pending adjudication before the High Court of Bombay. It is also pleaded by the writ petitioners that a writ petition being W.P. No.11671/2015 (Carnet Elias Fernandes and another vs. Superintendent of Police, Bhopal and others) has been filed before this Court seeking direction for registration of an FIR, which is pending.

06. The appellant filed an application under Section 9 of the Arbitration Act before the Bombay High Court bearing Arbitration Petition No.1118/2015 (supra), on which, vide order passed on 04.09.2015, Court Receiver, High Court, Bombay was appointed as a Receiver in respect of the property of the respondents described in Ex.'U' of the said petition with a direction to appoint the respondents or any person found in possession of the said properties as an agent of the Court Receiver on usual terms and conditions including payment of royalty and on furnishing security. It was made clear that if the respondents (writ-petitioners herein) or such third party do not accept the agency of the Court Receiver on the usual terms and conditions within two weeks from the date of such offer, the Court Receiver shall have power to take physical possession of the said property. It may be mentioned that against an order dated 04.09.2015 passed in proceedings under Section 9 of the Arbitration Act, an appeal was preferred by the writ-petitioners being Appeal (L) No.725 of 2015 (M/s Carnet Elias Fernandes and Another vs. Aditya Birla Finance Limited), wherein, a Division Bench of the Bombay High Court passed an interim order on 18.11.2015, directing the Court Receiver to take symbolic possession and that the writ-petitioners shall be appointed as the agent of the Court Receiver without payment of royalty and security deposit for the time being. Therefore, the writ-petitioners continued to be in actual physical possession though the Court Receiver was appointed.