- (1.) FACTS : On February 6, 1996 Agarwals formed a company by the name of M/s Chetani Exim Pvt. Ltd., the couple Dinesh Kumar Agarwal and Sunita Agarwal became its Directors. Chetani applied for financial support from Andhra Bank. The Bank sanctioned credit facility to the extent of Rs.40 lacs as working capital vide letter dated February 1, 2007. Dinesh and Sunita executed personal guarantee to the extent of Rs.10 lacs and Rs.8 lacs respectively. Agarwals did not adhere to the repayment schedule. The Bank declared the account as non-performing. On October 7, 2009, the Bank served a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as 'SARFAESI' Act. inter alia demanding a sum of Rs.46,97,257.02. The respondent replied to the said notice on November 28, 2009 by contending; the said notice was illegal and as such liable to be quashed. In paragraph 7 (II) of the said letter the learned advocate appearing for Agarwals would contend, "before taking such qusi step under the Act of 2002 the bank ought to have allowed and/or called upon my client to pay balance unpaid amount under compromise settlement which settlement is still in operation and vogue". The Bank replied by letter dated December 9, 2009, the Agarwals never turned up to the branch for any discussion. Chetani replied by letter dated December 24, 2009 asking for time, date and venue for discussing settlement. Nothing happened. The authority waited for about three years and ultimately took physical possession of the flat being the only tangible asset belonging to Agarwals. On November 6, 2012 challenging the action of the Bank for taking possession of the flat in question Agawrals and Chetani filed a writ petition before the learned Single Judge on December 13, 2012. The learned Single Judge allowed the writ petition vide judgment and order dated February 1, 2013 quashing the action taken by the bank under Section 13(4) coupled with liberty to proceed afresh. Being aggrieved, Bank preferred the instant appeal that we heard on April 8, 2013.
(2.) ANALYSIS OF THE JUDGMENT AND ORDER OF THE LEARNED SINGLE JUDGE :Learned Judge did not consider the merits of the case. His Lordship considered the provisions of law and ultimately came to the conclusion, the action on the part of the Bank was illegal. Pertinent to note, the Bank approached the Chief Judicial Magistrate, Barasat, 24-Parganas with an application under Section 14 of the SARFAESI Act and obtained an order on September 16, 2011 to take actual physical possession of the immovable properties/secured assets. According to the learned Judge, Section 14 would not empower a Chief Judicial Magistrate to pass such order as the power was vested upon the Chief Metropolitan Magistrate in Metropolis and the District Magistrate in the rest part of the State. Barasat is not a Metropolis nor is Baguihati where the flat is situated. Hence, the Chief Judicial Magistrate did not have any authority under Section 14. The Bank should have approached the District Magistrate, 24-Parganas (North) for appropriate order. His Lordship differed with the view expressed by the Kerala High Court in the case of Solaris Systems (P) Ltd. Vs. Oriental Bank of Commerce,2006 2 DRTC 408 Kerala and relied on the decision of the Bombay High Court in the case of Indusind Bank Ltd. Vs. State of Maharashtra, 2008 AIR(Bom) 2474. His Lordship also considered the Apex Court decision in the case of M/s. Transcore Vs. Union of India & Anr., 2007 AIR(SC) 712 and in the case of United Bank of India Vs. Satyawati Tondon & Ors., 2010 8 SCC 110. His Lordship lastly relied on the Apex Court decision in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai, 1998 8 SCC 1. We are told in a case of the like nature His Lordship in W.P. No. 5968 (w) of 2013 Banani Kar & Anr. Vs. Union of India and Ors, quashed an attempt of the secured creditor on the strength of an order passed by the Chief Judicial Magistrate, 24-Parganas (South) vide judgment and order dated March 8, 2013.
(3.) CONTENTIONS : Mr. Sovon Siddhanta, learned counsel appearing with Mr. Dinendra Nath Chatterjee, learned counsel advanced the argument on behalf of the Bank. Mr. Siddhanta would bank upon the Kerala High Court decision and contend, once the Chief Metropolitan Magistrate was permitted to exercise power under Section 14 there would be no reason why the Chief Judicial Magistrate in respect of other cities and/or towns would not be empowered to exercise such judicial power which their counterpart would avail sitting in Metropolis. Mr. Siddhanta drew our attention to the decision of the learned Single Judge in case of Solaris Systems (P) Ltd. . He would also rely upon a Madras High Court decision in the case of Dhanlakshmi Bank Ltd. Vs. Kovai Foods and Beverages & Ors., 2007 3 BankCas 612. The learned Single Judge of the Madras High Court considered Section 14 and observed as follows: "On perusal of the impugned order it appears that the learned Chief Judicial Magistrate is under misconception. Since the term "Chief Judicial Magistrate" is missing in the Act, instead "District Magistrate" is mentioned, erroneously returned the application. Power has been conferred on the District Head in metropolitan areas as well as in the non-metropolitan areas to initiate proceedings in this regard. Section 17(1) of the Cr.P.C. reads as follows : "The High Court shall, in relation to every metropolitan area within its local jurisdiction, appoint a Metropolitan Magistrate to be the Chief Metropolitan magistrate for such metropolitan area." Section 12(1) of the Cr.P.C. reads as follows : "In every district (not being a metropolitan area), the High Court shall appoint a Judicial Magistrate of the First Class to be the Chief Judicial Magistrate." ;