HDFC BANK LTD Vs. DISTRICT MAGISTRATE AND OTHERS

JUDGEMENT

(1.) The petitioner has prayed for the issuance of a writ in the nature of mandamus seeking a direction to respondents No.l to 5 to execute the order dtd. 12/1/2018 whereby the application filed by the petitioner under Sec. 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short 'the Act'] has been allowed.

(2.) In brief, the facts narrated in the Court by the counsel for the parties are that respondent No.2 [hereinafter referred to as 'the Company') secured a loan of Rs.16.00 crore from the petitioner-bank by mortgaging a residential house. Before the mortgage was created, respondent No.3 hadsworn an affidavit on 14/5/2009 in which he categorically averred that the mortgaged property is free from all sorts of encumbrances and charges, there is no lien on it and there is no litigation pending in Court in regard to the mortgaged property. However, it transpires from the record that on 14/7/2009, possession of the mortgaged property was handed over by respondent No.3 to respondent No.6, who happens to be his brother-in-law (wife's brother), by way of a registered lease deed for a period of 15 years. Since there was a default in the payment of the amount of loan, therefore, the petitioner declared the account of the borrower as NPA on 27/2/2015 and by virtue of a notice issued under Sec. 13(2) of the Act recalled the loan amount of Rs.4,52,26,700.50 providing them 60 days time. The borrower filed objections under Sec. 13(3-A) of the Act, which were decided by the petitioner on 4/6/2015 and issued possession notice under Sec. 13(4) of the Act on 7/7/2015. In between the borrower having an intuition that the property in dispute may not be repossessed by the petitioner by obtaining the order from the District Magistrate, Ludhiana, filed a caveat on 3/6/2015 in the Court of District Magistrate, Ludhiana. Notice in the caveat was issued on 27/1/2016 but the said caveat was dismissed by the District Magistrate on 12/4/2016. Aggrieved against the said order of dismissal, the borrower filed a review application on 5/9/2016. The application filed under Sec. 114 of the CPC was ultimately dismissed on 19/9/2017 but at the same time, the District Magistrate granted liberty to the secured creditors/petitioner to file a fresh application under Sec. 14(1) of the Act after rectifying grounds of rejection mentioned in the said order. While all these proceedings were going on, respondent No.6 filed a civil suit at Ludhiana on 23/11/2015 seeking a decree of permanent injunction against his landlord/borrower in which temporary injunction under Order 39 Rules 1& 2 of the Code of Civil Procedure, 1908 [for short 'the CPC] was granted on 24/11/2015. While the civil suit was pending, respondent No.6 filed another suit on 17/2/2017 seeking permanent injunction against the petitioner (secured creditor) which was however, withdrawn on 20/2/2017 even before the issuance of notice. Thus the net result was that there was no decree much less injunction of any Court obtained against the secured creditor either at the instance of the borrower or by the said lessee/tenant. The only injunction which was obtained in respect of the property in question was against the borrower in which the decree ultimately has been passed on 3/12/2018 as per which the borrower has been restrained from taking possession from the lessee/respondent No.6 otherwise than in due course of law.

(3.) It is also pertinent to mention that during the pendency of the aforesaid proceedings, the Act was amended and Sub-Sec. 4A was added in Sec. 17 of the Act by way of Act No.44 of 2016, Sec. 14(iv) w.e.f. 1/9/2016. Sec. 17(4A) of the Act is reproduced as under:-