State Bank of India vs Sri K. Lingappa and Others

N. Kumar, J.—This Writ Appeal is filed, challenging the order dated 02.09.2009 in W.P. No. 12812/2008 passed by the learned single Judge who has declined to interfere with the order passed by the Magistrate allowing the impleading application in a proceedings initiated before him u/s 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ''the Act''). Learned counsel for the Appellant/Bank assailing the impugned orders contends in a proceedings initiated u/s 14 of the Act, the learned Magistrate has no power to adjudicate the dispute and giving rights to the persons who are impleaded, i.e., the tenants and therefore, allowing the application for impleadment is illegal and requires to be set aside. The learned single Judge was not justified in up-holding such an order.

The Bank has approached the Magistrate for assistance to take possession of the property belonging to the debtor. They have not mentioned in their petition that the tenants are in possession of the property. Therefore, the tenants have filed an application to implead themselves and to bring it to the notice of the Magistrate that it is they who are in possession and not the debtor. That application is allowed. However, in the proceedings before the Magistrate, he has no jurisdiction to decide the rights of the tenants over the property in question. Therefore, it is open to the Bank to contend before the Magistrate notwithstanding with the allowing of the impleading application, there is nothing for him to adjudicate in the proceedings and he has to only extend the assistance to take possession of the property which belongs to the debtor.

The judgments on which the learned counsel for the appellant wants to rely in support of the said contention are to be relied on before the learned Magistrate and it is for the learned Magistrate to pass orders after looking into the said judgments. In that view of the matter, we do not see any justification to interfere with the said order. Accordingly, appeal is dismissed, reserving liberty to the appellant to urge all the grounds which are urged in this writ appeal, before the Magistrate.