Chhattisgarh Rajya Gramin Bank v. District Magistrate Raipur

: Shri Saket Pandey, Advocate. For Respondent/State : Shri Rahul Tamaskar, G.A. Hon'ble Shri Justice Sachin Singh Rajput Order on Board

20.05.2025

This Writ Petition under Article 226 of the Constitution of India has been preferred by the Petitioner for issuance of direction to Respondent No.1 to decide the application filed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) in Revenue Case No.310/B-121/2023-2024.

Shri Pandey submits that the procedure contemplated under Section 14 of the SARFAESI Act was commenced against the borrowers and guarantors i.e. Respondents No.2 to 4 as the borrower was declared non-performing asset (NPA). The said application was filed on 22.11.2023 before Respondent No.1 along with an affidavit of the authorised officer. He further submits that according to proviso to Section 14 of the said Act, the decision of like nature of the application has to be made within a period of 30 days and if not so, within a further period of 60 days, however, despite the fact that more than 1 year has elapsed, the proceeding under Section 14 of the said Act pending before Respondent No.1 3 has not been concluded. He, therefore, submits that Respondent No.1 may be directed to conclude the proceedings under Section 14 of the SARFAESI Act pending before it within a reasonable period of time.

On the flip side, Shri Tamaskar submits that the documents appended with the Writ Petition reflect that the said application is pending, however, the affidavit appended with the said application does not appear to have complied with the law laid down in the matter of RD Jain and Company vs. Capital First Limited and Others reported in (2023) 1 SCC 675. He further submits that necessary requirement as laid down in the case law cited above appears to have not been mentioned in the application appended with the Petition and as such, the Petition cannot be entertained and is liable to be dismissed.

Heard learned Counsel for the parties and perused the documents annexed with the Petition carefully.

For ready reference, proviso to Section 14 of the SARFAESI Act is reproduced hereunder:-

Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that- (i)the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application; (ii)the borrower has created security interest over various properties and that the Bank or Financial Institution is holding a valid and subsisting security interest over such properties and the claim of the Bank or 4 Financial Institution is within the limitation period; (iii)the borrower has created security interest over various properties giving the details of properties referred to in sub-clause (ii) above. (iv)the borrower has committed default in repayment of the financial assistance granted aggregating the specified amount; (v)consequent upon such default in repayment of the financial assistance the account of the borrower has been classified as a non-performing asset; (vi)affirming that the period of sixty days notice as required by the provisions of sub- section (2) of section 13, demanding payment of the defaulted financial assistance has been served on the borrower; (vii)the objection or representation in reply to the notice received from the borrower has been considered by the secured creditor and reasons for non-acceptance of such objection or representation had been communicated to the borrower; (viii)the borrower has not made any repayment of the financial assistance in spite of the above notice and the Authorised Officer is, therefore, entitled to take possession of the secured assets under the provisions of sub- section (4) of section 13 read with section 14 of the principal Act; (ix)that the provisions of this Act and the rules made thereunder had been complied with: Provided further that on receipt of the affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets [within a period of thirty days from the date of application] [Provided also that if no order is passed by the Chief Metropolitan Magistrate or District within the said period of thirty days for reasons beyond his control, he may, after recording reasons in writing for the same, pass the order within such further period but not exceeding in aggregate sixty days] Provided also that the requirement of filing affidavit stated in the first proviso shall not apply to proceeding pending before any District Magistrate or the Chief Metropolitan Magistrate, as the case may be, on the date of commencement of this Act.] (1A)[ The District Magistrate or the Chief Metropolitan Magistrate may authorise any officer subordinate to him,- 5 (i)to take possession of such assets and documents relating thereto; and (ii)to forward such assets 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 [any officer authorised by the Chief Metropolitan Magistrate or District Magistrate] done in pursuance of this section shall be called in question in any Court or before any authority.

The aforesaid proviso stipulates that on receipt of the affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets within a period of thirty days from the date of application and if he fails to do so within the said period of thirty days for reasons beyond his control, he may, after recording reasons in writing for the same, pass the order within such further period but not exceeding in aggregate sixty days.

Taking into consideration the submissions made at the bar, having perused the documents appended with the Petition and keeping in view the law laid down in the matter of RD Jain and Company (supra), this Court is inclined to direct Respondent No.1 to take a decision on the application filed under Section 14 of the SARFAESI Act within a further period of 30 days from the date of receipt of copy of this order in accordance with law. Ordered 6 accordingly.

With the aforesaid direction, the instant Petition stands disposed of.

Consequently, all pending applications also stand disposed of. Sd/- Priya (Sachin Singh Rajput) JUDGE