Indian Overseas Bank v. G.S.Rajshekaran

In the High Court of Judicature at MadrasDated: 21 - 2 - 2008 Coram:The Honourable Mr.Justice S.J.MukhopadhayaandThe Honourable Mr.Justice M.VenugopalWrit Appeal No.210 of 2008 & M.P.No.1 of 2008Indian Overseas Bank,Rep. by its Authorised Officer/Chief Manager,ARM Branch,Central Office Buildings (Annexe),763, Anna Salai, Chennai-2. .. Appellant/Respondent in WP.1069/08 on the file of this Court.vs.G.S.Rajshekaran .. Respondent/Petitioner in -do-.Writ Appeal against the order of this Court dated 30.1.2008 inWrit Petition No.1069 of 2008 under Article 226 of the Constitutionof India, to issue a Writ of Certiorari calling for the records ofthe impugned Possession notice dated 13.11.2007 of the respondent asCommunicated by letter dated 14.11.2007 bearing Ref.No.ARMB/254/2007-2008 of the respondent and quash the same.For appellant : Mr.M.Sathiyanarayan for M/s.F.B.benjamin GeorgeJudgmentS.J.Mukhopadhaya,JThis Writ Appeal has been preferred by the appellant-IndianOverseas Bank against the order of this Court dated 30.1.2008 in WritPetition No.1069 of 2008.2. In the said case, while the learned single Judge refused tointerfere with the notice issued under Section 13(4) of theSecuritisation and Reconstruction of Financial Assets and Enforcementof Security Interest Act, 2002 (for short, SARFAESI Act) and takinginto consideration the order passed by the appellant-Bank, thelearned single Judge allowed the respondent-Writ Petitioner toapproach the Debts Recovery Tribunal within two weeks from the dateof the order and till such time the appellant-Bank was directed tomaintain the position as on the date of the order passed in the Writ https://hcservices.ecourts.gov.in/hcservices/ Petition. It was also made clear by the learned single Judge that therespondent-Writ Petitioner shall not take advantage of the order inany of the proceedings and shall strictly adhere to the timestipulated by the Court.3. The Writ Appeal has been preferred by the Bank on the groundthat the High Court, in exercise of its powers under Article 226 ofthe Constitution of India, has no power to extend the period oflimitation.4. Learned counsel appearing for the appellant-Bank submittedthat the possession of the secured asset was taken on 13.11.2007 andunder Section 17 of the SARFAESI Act, the said measure has to bechallenged within a period of 45 days from the date of such measure.As such, the period of limitation for filing the application expiredon 28.12.2007. The Writ Petition in question was in fact filed on8.1.2008, i.e. beyond the period of limitation. Therefore, the WritPetition itself was filed after the expiry of the period oflimitation provided under the SARFAESI Act and hence, exclusion ofthe period spent before the wrong forum does not arise in this case.Further argument was also made with regard to the stand as was takenby the respondent/Writ Petitioner and it was submitted that themortgage over the secured asset was created on 18.11.1991, which wasperiodically extended. The action initiated by the secured creditorby demand notice dated 21.8.2007 is well within the period oflimitation.5. Learned counsel appearing for the appellant-Bank also reliedon the decision of the Supreme Court reported in AIR 2004 SC 2371(Mardia Chemicals Ltd. vs. Union of India), wherein the Supreme Courtobserved as follows:"59. We may like to observe that proceedingsunder Section 17 of the Act, in fact are notappellate proceedings. It seems to be a misnomer.In fact that it is the initial action which isbrought before a Forum as prescribed under theAct, raising grievance against the action ormeasures taken by one of the parties to thecontract. It is the stage of initial proceedinglike filing a suit in Civil Court. As a matter offact proceedings under Section 17 of the Act arein lieu of a civil suit which remedy is ordinarilyavailable but for the bar under Section 34 of theAct in the present case. ...."Reliance was also placed on a decision of the Division Bench ofthis Court reported in 2007 (3)CTC 389 (Muthammal Transports vs.P.Swathanthirarajan), wherein, the Division Bench of this Court heldthat the High Court exercising jurisdiction under Article 226 of theConstitution of India, has no power to extend the period oflimitation and could not direct the authority concerned to consider https://hcservices.ecourts.gov.in/hcservices/ the matter on merits without applying the limitation period.6. We have heard the learned counsel appearing for the appellant-Bank at the stage of the admission of the Writ Appeal and perused theimpugned order of the learned single Judge and other records.7. It is not in dispute that the respondent-Writ Petitioner haschallenged the possession notice dated 13.11.2007, as communicated,vide letter dated 14.11.2007, bearing Reference No.ARMB/254/2007-08of the appellant-Bank. He also prayed for an order of interiminjunction restraining the respondent therein (the appellant in thisWrit Appeal) from proceeding further with the proposed auction-saleof the Writ Petitioner's property in terms of the notice dated26.12.2007. The Writ Petition was preferred on 8.1.2008.8. From the aforesaid facts, it would be evident that therespondent-Writ Petitioner had not challenged the notice issued underSection 13(2) of the SARFAESI Act, but challenged the action of theappellant-Bank in taking possession of the secured asset forrealising the same and such action of taking the possession of thesecured asset though started on 13.11.2007, the cause of actioncontinued till the notice dated 26.12.2007 was issued for auction-sale of the secured asset under Section 13(4) of the SARFAESI Act.9. Section 13(4) of the SARFAESI Act enables the secured creditorto take recourse to one or more of the measures to recover thesecured debt as shown under Clauses (a), (b), (c) and (d) of Section13(4). The cause of action takes place as and when one or other suchmeasure to recover the secured debt is taken by the secured creditor.10. In the present case, the first cause of action started whenthe possession was taken, vide notice dated 13.11.2007, followed bythe subsequent cause of action taken place on 26.12.2007 when theauction-sale notice under Section 13(4)(a) of the SARFAESI Act waspublished by the secured creditor-appellant-Bank. There being acontinuous cause of action having lastly taken on 26.12.2007, and asthe Writ Petition was filed on 8.1.2008, we are of the view that theWrit Petition was filed before this Court well within the period oflimitation of 45 days.11. Apart from the merits of the case, we have also noticed theattitude and action of the appellant-Bank. The Writ Petition wasfiled by the respondent-Writ Petitioner. The High Court under Article226 of the Constitution of India, could have entertained the saidWrit Petition to determine the case on merits, as the provisions ofthe SARFAESI Act cannot take away the power of the High Court underArticle 226 of the Constitution of India. It is only because thealternative forum is prescribed under the law, the learned singleJudge refused to entertain the Writ Petition and allowed therespondent-Writ Petitioner to move before the Debts Recovery Tribunal https://hcservices.ecourts.gov.in/hcservices/ under Section 17 of the SARFAESI Act. After getting the casedismissed by the learned single Judge, now the appellant-Bank isopposing the respondent-Writ petitioner even to prefer theapplication (appeal) under Section 17 of the SARFAESI Act, andthereby, wants to take advantage by making the respondent-WritPetitioner remediless. 12. In the aforesaid background, in the absence of merits, whilewe dismiss this Writ Appeal filed by the appellant-Bank, we imposecosts of Rs.20,000/- (Rupees twenty thousand only) on the appellant-Bank for payment in favour of the Tamil Nadu State Legal ServicesAuthority, High Court Buildings, Chennai-600 104, within a period ofsix weeks from today. In case of failure to deposit the amount by theappellant-Bank as aforesaid within the stipulated time, the MemberSecretary of the Tamil Nadu State Legal Services Authority will takeappropriate steps to recover the amount from the appellant-Bank. TheMiscellaneous Petition is closed.Let a copy of this judgment be forwarded to the MemberSecretary of the Tamil Nadu State Legal Services Authority, HighCourt Buildings, Chennai-600 104. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.csCopy to1. Member Secretary,The Tamil Nadu State Legal Services Authority, High Court Buildings, Chennai-600 104. 2. The Authorised Officer/Chief Manager,ARM Branch,Central Office Buildings (Annexe),763, Anna Salai, Chennai-2. + 1 CC To Mr. F.B.Benjamin George, Advocate SR NO.9407Writ Appeal No.210 of 2008kg[co]gp/27.2.