1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE PRAKASH CHANDRA GUPTA
ON THE 8 th OF MAY, 2023
WRIT PETITION No. 10672 of 2023
BETWEEN:-
FULLERTON INDIA CREDIT COMPANY LIMTIED
THROUGH AUTHORIZED OFFICER PRATIK DUBEY S/O
SHRI SUDHIR DUBEY, AGED ABOUT 33 YEARS,
OCCUPATION: SERVICE 1ST FLOOR, BLOCK 4, 9/1 MG
ROAD, NEAR TREASURE ISLAND MALL, BEHIND YES
BANK INDORE (MADHYA PRADESH)
.....PETITIONER
(SHRI RAVINDRA MAHESHWARI,-ADVOCATE)
AND
1. ADDITIONAL DISTRICT MAGISTRATE
COLLECTOR OFFICE, MOTI TABELA, INDORE
(MADHYA PRADESH)
2. M/S. HOTEL SAVERA THROUGH PROPRIETOR
SHRI AMAN S/O VIJAY KUMAR DAWAR 44 NEW
9/4, CHOTI GAWAL TOLI, INDORE (MADHYA
PRADESH)
3. SHRI AMAN S/O SHRI VIJAY KUMAR DAWAR
OCCUPATION: BUSINESS PLOT NO. 413, FOURTH
FLOOR, SHEENATH AVENUE, 158, MURAI
MOHALLA, KIBE COMPOUND INFRONT OF DAWA
BAZAR, INDORE (MADHYA PRADESH)
4. SHRI VIJAY KUMAR DAWAR S/O SHRI
OCCUPATION: BUSINESS PLOT NO. 413, FOURTH
FLOOR, SHEENATH AVENUE, 158, MURAI
MOHALLA, KIBE COMPOUND INFRONT OF DAWA
BAZAR, INDORE (MADHYA PRADESH)
5. SMT. NEETA W/O SHRI VIJAY KUMAR DAWAR
OCCUPATION: BUSINESS PLOT NO. 413, FOURTH
2
FLOOR, SHEENATH AVENUE, 158, MURAI
MOHALLA, KIBE COMPOUND INFRONT OF DAWA
BAZAR, INDORE (MADHYA PRADESH)
.....RESPONDENTS
( SHRI BHUWAN GAUTAM-GOVERNMENT ADVOCATE)
This petition coming on for admission this day, JUSTICE SUSHRUT
ARVIND DHARMADHIKARI passed the following:
ORDER
1. By this petition, petitioner has prayed for the following reliefs:
" i. Kindly, issue an appropriate writ and/or direction and/or
order to allow this petition and set aside/quash the impugned order
dated 16-01-2023 and 05-04-2023 in SARFAESI Case No.
0031/B-121/2022-23 (Fullerton India V/s Hotel Savera and
others) passed by the Respondent No. 1, Learned Additional
District Magistrate, Indore.
ii. Kindly, issue an appropriate writ and/or direction and/or
order to direct the Additional District Magistrate, Indore to decide
the application filed by the petitioner bank under, section 14 of the
SARFAESI Act without awarding any opportunity of hearing to
the respondent no. 2 to 5 and without considering any of the
contentions / submissions / documents of the respondent no. 2 to 5
at any stage of such proceedings and consequently assist petitioner
in getting the possession of the secured asset.
iii. Kindly, issue any such further or other appropriate writ
and/or direction and/or order in favour of petitioner as may be
deemed. appropriate looking to the facts and circumstances
involved in the matter.
3
iv. Kindly, award the entire cost of the writ petition in favour
of the Petitioner."
2. The brief facts of the case are that the respondent nos. 2 to 5 who are
borrowers, have availed a loan facility from the Petitioner amounting to
Rs.97,78,740/- and for that particular loan, the respondent Nos.2 to 5 has
mortgaged their property situated at Commercial House (Hotel Savera), Plot
No. 9/4 (Old No.44), Kibe Compound, Chhoti Gwaltoli, Tehsil, District Indore.
Thereafter, the respondent Nos. 2 to 5 were defaulting in the payment of loan to
the petitioner because of which the petitioner has classified their loan account as
Non-Performing Asset (NPA) on 31-07-2022. In consequence of the same, the
petitioner issued a notice on 30-08-2022 to the respondent nos.2 to 5 for
discharging their full liabilities towards the petitioner within 60 days of receipt
of the notice as per Section 13(2) of the Securitization and Reconstruction of
Financial Asset and Enforcement of Security Interest Act, 2002 (hereinafter
referred to as SARFAESI ACT). Thereafter, the petitioner further filed an
application on 16-01-2023 under Section 14 of the SARFAESI Act before the
District Magistrate, Indore, seeking assistance in taking possession of the
mortgaged property from the respondent Nos. 2 to 5. The petitioner's
application was transferred to the Additional District Collector, Indore. The said
application was registered bearing No. 0031/B-121/2022-23. The Additional
District Collector took cognizance upon the application filed by the petitioner
and issued notice to the respondent Nos. 2 and 3 vide order dated 16.01.2023
Upon said notice, the respondents have appeared before the Additional District
Magistrate, Indore on 01.03.2023. Being aggrieved by the said proceedings of
the case pending before the Additional District Magistrate, the petitioner has
filed the present petition.
4
3. Heard arguments and perused the record.
4. Section 14 of the SARFAESI ACT is reproduced below:-
" 14. Chief Metropolitan 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 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 Metropolitan Magistrate or, as
the case may be, the District Magistrate shall, on such request
being made to him- a. Take possession of such asset in documents
relating thereto; and (b) forward such asset 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 Chief Metropolitan Magistrate or the
District Magistrate done in pursuance of this section shall be called
in question in any court or before any authority."
5
5. Counsel for the petitioner has heavily placed reliance upon the
judgment passed by Division Bench at Principal Seat Jabalpur in WA No.
784/2018 (Aditya Birla Finance Limited Vs. Shri Carnet Elias Fernandes
Vemalayam). Relevant para of which is reproduced below:-
"28. Coming to the argument that opportunity of hearing
was not granted to the writ-petitioners and that the order passed by
the District Magistrate violates the principles of natural justice is
again not tenable. The Bombay High Court in a judgment
reported as 2007 Cri LJ 2544 (Bom.) (Trade Well vs. Indian
Bank) has held that the District Magistrate is not required to give
notice either to the borrower or to the third party. He is only to
verify from the Bank whether notice under Section 13(2) of the Act
has been issued or not. The said judgment has been quoted with
approval by the Supreme Court in a judgment reported as (2013)
9 SCC 620 (Standard Chartered Bank, etc. vs. V. Noble Kumar
and others, etc), wherein it was held as under:-
" 22. However, the Bombay High Court in Trade Well v.
Indian Bank [2007 Cri.L.J. 2544 (Bom.)] opined;
"2 ...CMM/DM acting under Section 14 of the NPA Act is
not required to give notice either to the borrower or to the third
party.
3. He has to only verify from the bank or financial institution
whether notice under Section 13(2) of the NPA Act is given or not
and whether the secured assets fall within his jurisdiction. There is
no adjudication. of any kind at this stage.
4. It is only if the above conditions are not fulfilled that the
6
CMM/DM can refuse to pass an order under Section 14 of the NPA
Act by recording that the above conditions are not fulfilled. If these
two conditions are fulfilled, he cannot refuse to pass an order
under Section 14."
The said judgment was followed by the Madras High Court
in Indian Overseas Bank v. Sree Aravindh Steels Ltd. [AIR 2009
Mad. 10]. Subsequently, Parliament inserted a proviso to section
14(1) and also subsection (1-A) by Act 1 of 2013.
25. The satisfaction of the Magistrate contemplated under
the second proviso to section 14(1) necessarily requires the
Magistrate to examine the factual correctness of the assertions
made in such an affidavit but not the legal niceties of the
transaction. It is only after recording of his satisfaction the
Magistrate can pass appropriate orders regarding taking of
possession of the secured asset."
Thus, the proceedings under Section 14 of the Act are not proceedings
to adjudicate the rights of the parties. Therefore, no notice is contemplated to
be served upon the debtor, as such proceedings are taken only after serving
notice under Section 13 of SARFAESI Act.
6. In view of the aforesaid, as per Section 14 of the SARFAESI Act, the
District/Chief Metropolitan Magistrate is required to assist the secured creditors
in taking possession of secured assets. The District Magistrate is not required
to give any notice to either the borrowers or to the third party. He is only
required to verify from the Bank whether notice under Section 13(2) of the
SARFAESI Act has been issued/served or not. [See: (2013) 9 SCC 620
7
(Standard Chartered Bank, etc. vs. V. Noble Kumar and others, etc).
7. Accordingly, the present petition is allowed. The orders dated 16-01-
2023 and 05-04-2023, passed in Case No. 0031/B-121/2022-23, is hereby
quashed. Additional District Magistrate, Indore is directed to decide the
application filed by the petitioner under Section 14 of SARFAESI Act without
affording any opportunity of hearing to the respondent No. 2 and 5 and without
considering any of the contentions or submissions or documents at any stage of
the proceedings.
8.Writ petition stands allowed and disposed of.
(S. A. DHARMADHIKARI) (PRAKASH CHANDRA GUPTA)
JUDGE JUDGE
VD
VARSHA DUBEY
2023.05.11
13:28:57 +05'30'
