Centurion Bank of Punjab, now Merged with HDFC Bank Ltd. vs Pratham Impex Private Limited

B.S. Patil, J.—In these writ petitions, Petitioner is challenging the orders dated 22.02.2011 and 24.02.2011 passed by the VIII Additional Chief Metropolitan Magistrate, Bangalore, in Crl. Misc. P. No. 617/2010.

Criminal Miscellaneous Petition was filed by the Petitioner-bank u/s 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, hereinafter referred to as ''the Act'') seeking police protection to take possession of the secured asset. The miscellaneous case came to be allowed on 31.03.2010. However, as an application was filed in the meanwhile u/s 17(1) of the Act before the Debts Recovery Tribunal, the Petitioner-bank, it is urged, had not taken possession of the secured asset. According to the Petitioner-bank, it has taken possession of the secured asset on 17.02.2011 as S.A. No. 424/2010 filed by the Respondent came to be dismissed on 31.08.2010.

The borrower - Respondent herein has moved the learned Magistrate who had disposed of the Criminal Miscellaneous filed seeking stay of the order passed u/s 14 of the Act and also sought for time to settle the dues. Learned Magistrate has entertained the said application and has passed an order dated 22.02.2011 granting three months time to the borrower to pay the amount due to the bank. In fact, the learned Magistrate has granted time till 22.05.2011 and until then, the Authorised Officer of the bank has been directed not to take possession of the secured asset by executing the order passed by the learned Magistrate. Subsequently, on 24.02.2011, another order is passed by the learned Magistrate after the ease was advanced on the application filed by the Petitioner. The operative portion of the said order states that the Petitioner-bank had played fraud against the Court in not informing about taking over possession and had made the Court to pass the order. The Court below has proceeded on the basis that the bank had suppressed before the Court on 22.02.2011, the feet that it had taken possession of the property on 17.02.2011 and the said suppression amounted to playing fraud against the Court.

The entire premises on which the Court below has proceeded is totally erroneous. Learned Magistrate has no jurisdiction to grant time to the borrower to pay the amount. The power u/s 14 of the Act is only limited and confined to granting the aid or protection as provided under the provisions to enable the creditor to take possession of the property. No further power or jurisdiction is vested with the learned Magistrate to grant time to the borrower to pay the amount or to restrain the bank from taking possession of the secured asset. It is only u/s 17(1) of the Act that the aggrieved person is entitled to agitate his grievance before the Tribunal.

It is submitted by the counsel for the Respondent that in the instant case, the matter is now pending before the Debts Recovery Appellate Tribunal. If that is so, it is open to the Respondent to seek redressal of his grievance before the Appellate Tribunal. Hence, the impugned orders passed by the learned Magistrate being without jurisdiction are unsustainable. Accordingly, these writ petitions are allowed. Impugned orders are set aside. Liberty is reserved to the Respondent to pursue the matter before the Debts Recovery Appellate Tribunal.