W.P. Nos. 24598, 24353 of 2014, M.P. Nos. 1, 1, 2, 2 and 3 of 2014. Case: T.C. Ramadoss and Ors. Vs The Chief Manager & Authorised Officer State Bank of India and Ors.. High Court of Madras (India)
| Case Number | W.P. Nos. 24598, 24353 of 2014, M.P. Nos. 1, 1, 2, 2 and 3 of 2014 |
| Counsel | For Appellant: A.R.L. Sundaresan, Sr. Counsel for V. Madhavan, Adv. and For Respondents: M.L. Ganesh, Adv. |
| Judges | Satish K. Agnihotri and M. Venugopal, JJ. |
| Issue | Code of Criminal Procedure, 1973 (CrPC) - Sections 12, 19; Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13, 13(2), 13(3A), 13(4), 14, 14(1), 17 |
| Judgement Date | January 29, 2015 |
| Court | High Court of Madras (India) |
Order:
Satish K. Agnihotri, J.
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Both the instant writ petitions arise from the common order dated 23.07.2012 passed by the Chief Judicial Magistrate, Vellore (for short "the CJM") in Crl.M.P. No. 864 of 2012.
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The facts in nutshell are that the respondents 3 and 4 borrowed loan to the tune of Rs.22.82 crores from the respondent bank against movable and immovable properties pledged/mortgaged as secured assets in favour of the respondent bank. When the borrowers became defaulters, the respondent bank classified the secured assets as Non Performing Assets as on 31.12.2011. Thereafter, a demand notice was issued on 30.03.2012 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the Act", 2002) to the borrowers and guarantors, i.e., the petitioners also. No payment was made as statutorily required within 60 days from the date of the said notice. However, a representation was made under Section 13(3-A) of the Act, 2002, on 24.04.2012. Thereafter, a notice under Section 13(4) of the Act, 2002 was issued on 18.06.2012, wherein, symbolic possession of the secured assets was effected. An Original Application being O.A. No. 8 of 20112 was also filed by the respondent bank for recovery of money to the tune of Rs.24 crores before the Debt Recovery Tribunal-I, Chennai. Thereafter, the respondent bank preferred an application under Section 14(1) of the Act, 2002, before the CJM, who, in exercise of his presumptive power under Section 14 of the Act, 2002, passed the impugned order dated 23.07.2012, holding that the respondent bank was entitled to take over actual possession of the property in question and also, assistance thereon was granted.
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The present petitioners, who were arrayed as respondents in all the proceedings, have come up with the instant writ petitions stating that they have no role in the loan transaction and that they have also not stood guarantee for the loan and in fact, they have been deceived by the beneficiaries, i.e., the borrowers.
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It is contended by Mr. AR.L. Sundaresan, learned Senior Counsel appearing for the petitioners that the order passed by the CJM is illegal and non-est as the CJM has no authority to exercise jurisdiction under Section 14 of the Act, 2002 for passing the order of taking over actual possession and granting assistance accordingly. The learned Senior Counsel relies on a decision of a Full Bench of this Court in K.Arokiyaraj and Others Vs The Chief Judicial Magistrate, Srivilliputhur, Virudhunagar District and Others 2013 (6) MLJ 641: 2013 (4) LW 485, wherein, it was held that in districts where there is no Chief Metropolitan Magistrate having jurisdiction, the District Magistrate alone has the jurisdiction to exercise power under Section 14 of the Act, 2002. Thus, the impugned order passed by the CJM be set aside and the consequential action be held as null and void.
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On the other hand, Mr. M.L. Ganesh, learned counsel for the respondent bank would submit that the Full Bench judgment of this Court in K. Arokiyaraj 2013 (6) MLJ 641: 2013 (4) LW 485 (supra), was pronounced on 27.08.2013, after the CJM exercising his power under Section 14 of the Act, 2002, had passed the order on 23.07.2012. Thus, applying the principle of prospective overruling, the impugned order is valid and sustainable in the eye of law. It is further contended...
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