In the High Court of Judicature at Madras Dated : 10.06.2011 Coram : The Hon'ble Mr.Justice D.MURUGESAN and The Hon'ble Mr.Justice K.K.SASIDHARAN W.P.No.9072 of 2011 and M.P.Nos.1 and 2 of 2011 R.Shiva Subramaniyan .. Petitioner -vs- 1. Senior Manager, State Bank of India, Erode Branch, Erode. 2. Assistant General Manager, State Bank of India, Erode Branch, Erode. 3. The Reserve Bank of India, Fort Glacis, Rajaji Salai, Chennai. .. Respondents Petition filed under Article 226 of the Constitution of India praying for issue of writ of Certiorari to call for the records pertaining to the order passed by the learned Chief Judicial Magistrate, Coimbatore in C.M.P.No.1283 of 2010 and quash the same. For Appellant : Mr.Rajkumar Paul For Respondents : Mr.K.Sankaran for RR1 & 2 * * * * * O R D E R
(Order of the Court was made by D.MURUGESAN, J.)
The writ petition questions the following order of the Chief Judicial Magistrate dated 14.10.2010 passed under Section 14 of the SARFAESI Act,
” Whereas it is deemed requisite for the purpose of this petition that a commission should be issue. Your are hereby appointed as Commissioner for the purpose of taking possession of the petition mentioned property described hereunder to take possession of the secured assets mentioned in the schedule and to had over the same to the Authorised Officer of the petitioner bank with the assistance of the Inspector of Police, B.5 Singanallur Police Station, Coimbatore.
A sum of Rs.15000/- (Rupees fifteen thousand only) being your fee in the above and, the same will be paid directly by the petitioner.
SCHEDULE OF PROPERTY
The property belongs to Sri R.Siva Subramaniyam, S/o.Raja Naidu, in Coimbatore Registration District, Singanallur Village, R.S.No.109/1, Punja acre 5.19, in this extent of 2.59 = acres of land, in this excluding the 0.44 = acre of land the remaining extent of 2.15 acres of land, in this the house site No.22 among the layout formed and situates within the following boundaries:
East of the house site No.17
West of 20 feet broad north south road
South of the house site No.21
North of the R.S.No.110
Which admeasures 40’6″ on east west on south, 41’3″ feet on east west on north and 37’6″ on north south on both sides with a total extent of 1533 sq.ft of land and the house therein with Door No.22 of Renuka Nagar and the common rights in all roads and all easementary thereo.
As per the sub-divisions the above said property situates in R.S.No.109/1E and within the Coimbatore Corporation limits.”
The challenge to the above order arises under the following circumstances.
2.The petitioner availed a loan of Rs.55 lakhs from the State Bank of India, Erode Branch, during the year 2008. The petitioner became defaulter in repayment after April, 2009. The debt of the petitioner became a non-performing asset and hence, the respondent-bank issued notice under Section 13(2) of the SARFAESI Act dated 01.03.2010 demanding a sum of Rs.55,81,544/-. As the said demand notice was not honoured and the amount demanded was not paid, the respondent-bank issued possession notice dated 05.05.2010 under Section 13(4) and had taken symbolic possession.
3.The notice under Section 13(4) was questioned by the petitioner in W.P.No.13004 of 2010 and the same was dismissed by this Court on 23.08.2010 on the ground that the petitioner has got a remedy of appeal under Section 17 of the Act. Thereafter, the petitioner had filed an appeal before the Debts Recovery Tribunal, Coimbatore challenging the possession notice with delay in preferring the appeal. While the appeal is pending, the respondent-bank has also filed an application under Section 14 of the Act before the learned Chief Judicial Magistrate, Coimbatore, who passed the order questioned in this writ petition.
4.We have heard the learned counsel appearing for the petitioner and the learned counsel for the respondents-bank.
5.The question for our consideration is as to whether an order of the kind passed by the learned Chief Judicial Magistrate could be sustained in the eye of law.
6.The learned counsel appearing for the petitioner would submit that though there is a provision of appeal as per the judgment of the Apex Court in (2010) 8 SCC 110, United Bank of India vs. Satyavati Tondon and others, in the event the order is ex facie illegal and contrary to the settled law, the writ petition is maintainable and the alternative remedy cannot be a bar in such matters. As the order is passed without application of mind, it is liable to be set aside.
7.On the other hand, two objections are raised by the learned counsel appearing for the respondents-bank. According to the learned counsel for the respondents-bank, the petitioner has already filed an appeal before the Tribunal questioning the order of the learned Chief Judicial Magistrate. Having availed such remedy, the petitioner cannot maintain the writ petition. Secondly, in any event, the functioning of the Magistrate under Section 14 is only ministerial and as there is no requirement of any adjudication before appointing an advocate commissioner and therefore, no fault can be found as to the impugned order.
8.We have carefully considered both the submissions. Before we refer to the judgment of this Court on the issue, we are inclined to refer to the judgment of the Supreme Court reported in (2010) 8 SCC 110, United Bank of India vs. Satyavati Tondon and others. While considering the power of the High Court to entertain the writ petitions challenging notice under Section 13(4) and Section 14 of the SARFAESI Act, the Apex Court held that the writ petitions should not be normally entertained as there is an effective alternative remedy of appeal under Section 17 of the Act. The Apex Court found that the action of the bank to approach the District Magistrate/Chief Judicial Magistrate under Section 14 is also a measure in continuance of the measures to recover the debts due to the bank under Section 13(2) as well as under Section 13(4). However, while holding so, the Apex Court in paragraph 45 has also held as follows:-
“45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detail mechanism for redressal of his grievance.”
9.It is true that this Court sitting under Article 226 of the Constitution should be cautious to entertain a writ petition in the event an effective alternative remedy is available to the writ petitioner. The above rule is not absolute as the power of this Court is not taken away to entertain the writ petition challenging an order, which is ex-facie illegal and cannot be sustained in the eye of law, as laid down by the Apex Court as well as High Courts. A Division Bench of this Court, in the judgment reported in 2010 CIJ 386 CLJ, (V.Noble Kumar vs. The Authorised Officer, Standard Chartered Bank, Auto and Mortgage Collections, Chennai and others), has held that for the purpose of invocation of Section 14, the following conditions must be fulfilled:-
(i) There must be a debt by a borrower from a secured creditor under a security agreement;
(ii) There must be a default in repayment of secured debt or any instalment thereof by the borrower;
(iii)The borrower’s account in respect of such debt is classified by the secured creditor as ‘non-performing asset’;
(iv) A notice in writing should be issued by the secured creditor to the borrower to discharge in full his liabilities within sixty days from the date of the notice;
(v) In terms of sub-section (3) of section 13, the notice shall also give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor.
In the event, a provision of appeal is available to question the order passed under Section 14, that order must give reasons so as to enable the aggrieved person to prefer appeal. In the event the order is totally non-speaking and without any application of mind and that too, without any reason, availing of alternative remedy is of no use as such aggrieved person may not have any ground to raise before the appellate authority except stating that the order is a non-speaking order. The SARFAESI Act is intended to recover the debts and stringent measures are provided and hence, strict compliance of each of the provisions of the Act is absolutely necessary.
10.In this case, the order, which we have extracted in the earlier portion, does not indicate of any application of mind to the issue involved. First of all, the learned Magistrate has not even satisfied himself whether there is territorial jurisdiction to entertain the petition. Secondly, there is no reference as to whether notice under Section 13(2) has been issued or not and thirdly, whether a possession notice has been issued and there was resistance from the person occupying the secured immovable asset in question so as to compel the bank to approach the Magistrate. The application filed by the bank contains all the details including the relevant records. It may be true that the bank might have complied with all the provisions for invoking Section 14 of the Act. Nevertheless, though the learned Magistrate is discharging only ministerial function and no adjudication is necessary, having regard to the right to property under Article 300A is involved, certain minimum requirement of application of mind is necessary.
11.In fact, when an application is filed, the learned Magistrate has only said that it is deemed requisite for the purpose of the petition that a commission is to be issued. Since we entertained certain doubts about the very order, as we were under the impression that there would be a separate detailed order, we directed the learned counsel appearing for the respondents-bank to produce a copy of the order if any passed by the learned Magistrate. Accordingly, the proceedings of the learned Magistrate is produced. It is seen that on 14.10.2010, the following endorsement has been made:-
“Petnr. prays to appoint an Advt/Commissioner to take possession in petn mentioned property and handed over the same to the petitioner.”
Thereafter, on 18.10.2010, there is another endorsement, viz.,
“Perused Records. Prima facie case made out. Miss.J.Suganthi, is appointed as Advt./ Commissioner. Her remuneration is fixed at Rs.15000/- paid by the petitioner directly by way of D.D. or cheque within a week. The Advt./Commr. is directed to take possession of petition mentioned property and handed over the same to the petnr.”
“Issue warrant. Commissioner report by 16.11.2010.”
12.A careful perusal of the above indicates that the learned Chief Judicial Magistrate has only endorsed in words “Issue warrant”. In our opinion, such orders cannot be considered to be an order after application of mind to the materials available before the Court.
13.In fact, after considering the ratio laid down by this Court in Nobel Kumar’s case, referred supra, under similar circumstances in W.P.No.16754 of 2010 dated 25.04.2011, this Court had entertained the writ petition challenging the order of the Chief Judicial Magistrate, Coimbatore and quashed the same and remitted the matter back to the Magistrate with a further direction that if the possession is already taken pursuant to the said order of the Magistrate, it shall be restored to the petitioner therein. As the impugned order suffers from total non-application of mind, in our opinion, the petitioner cannot be thrown out solely on the ground that he should vindicate his grievance only before the Tribunal under Section 14 of the Act.
14.Having regard to the peculiar facts and circumstances of the case, we are of the considered view that the impugned order is liable to be set aside and accordingly, the same is set aside. The matter is remitted back to the learned Chief Judicial Magistrate, Coimbatore, who shall consider the application in the light of the order passed in Noble Kumar’s case, referred supra and show at least minimum application of mind to the petition filed by the bank for appointment of advocate commissioner. It is reported that the possession of the property has already been taken. The respondents-bank is directed to restore the possession of the property to the petitioner. The learned Chief Judicial Magistrate, Coimbatore, shall take up the application and dispose of the same, if it is
D.MURUGESAN, J.
and
K.K.SASIDHARAN, J.
(sra)
reported that the possession is restored. Such an order shall be passed in a period of fifteen days from the date when the restoration of possession is made.
15.With the above observation and direction, the writ petition is allowed. No costs. Consequently, connected M.Ps. are closed.
(D.M.,J.) (K.K.S.,J.)
10.06.2011
Note: Issue order copy
by 15.06.2011.
Index : yes/no
Internet : yes/no
sra
W.P.No.9072 of 2011