MHTH030191892023 Criminal Misc. Application No.
2095/2023
SMFG India Home Finance Company Limited
Vs.
Mr. Jimmy Joshua Sanamanda
ORDER BELOW EXH. 1
This is an application filed under Section 14 of the
SARFAESI Act for taking possession of secured assets. It is averred
that due to default of the respondent borrower in repayment of
secured debt through installments, the loan account bearing
No.606307210234572 of the respondent has been classified by the
applicant, a secured creditor, as non-performing asset.
2] Exercising the powers under section 13 of the
Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (hereinafter referred to as
‘the SARFAESI Act’), the applicant has initiated action for
enforcement of security interest created through a mortgage by
deposit of title deed dated 09/01/2018 in respect of the scheduled
property.
3] It is stated that the applicant has given a notice on
06/04/2021 under section 13(2) of the SARFAESI Act requiring the
borrower - respondent to discharge in full, their liability to the tune
of Rs.32,92,967.03/- towards the applicant within 60 days. There
has been no successful representation or lawful objection raised by
the respondent before the secured creditor within 60 days of receipt
of the notice.
4] The applicant then proceeded to take action as
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provided in section 13(4) of the SARFAESI Act for which it required
possession of the secured asset of the respondent. For this purpose as
per the provisions of section 14 of the SARFAESI Act, this application
is filed with a request to provide assistance for taking possession of
the secured asset.
5] Section 14 of the SARFAESI Act provides that where the
possession of any secured assets is required to be taken by the
secured creditor or if any of the secured asset is required to be sold
or transferred by the secured creditor under the provisions of this
Act, the secured creditor may, for the purpose of taking possession or
control of any such secured assets, request, in writing, the Chief
Metropolitan Magistrate or the District Magistrate within whose
jurisdiction any such secured asset or other documents relating
thereto may be situated or found, to take possession thereof, and
the Chief Metropolitan Magistrate or, as the case may be, the District
Magistrate shall, on such request being made to him — (a) take
possession of such asset and documents relating thereto; and (b)
forward such asset and documents to the secured creditor.
6] The proviso of section 14 requires compliance of few
things. Those are -
i) The application shall be accompanied by an affidavit
duly affirmed by the authorized officer of the secured
creditor.
ii) The affidavit shall declare the aggregate amount
of financial assistance and the total claim of the Bank as
on the date of filing of the application.
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iii) The affidavit shall further declare that the borrower
created security interest over properties and the Bank or
financial institution is holding valid and subsisting
security interest over such property.
iv) There must be a declaration in the affidavit that claim of
the Bank or Financial Institution is within the limitation
period.
v) Details of the properties over which security interest is
created must be supplied.
vi) There must be default committed by the borrower in
repayment of the financial assistance and the account of
the borrower must be classified as a nonperforming
asset.
vii) Notice under section 13(2) of the SARFAESI Act must
have been issued and served on the borrower.
viii) The affidavit must further declare that objection
or representation in reply if any to the notice has been
duly considered and reasons for nonaccetptance of such
objection or representation has been communicated to
the borrower.
ix) The borrower must have failed to make repayment of
the financial assistance inspite of the notice under
section 13(2) of the SARFAESI Act and therefore, the
bank or financial institution must be entitled to take
possession of the secured assets.
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7] As per the decision of the Hon'ble Supreme Court in
Authorized Officer, Indian Bank V/s. Visa Lakshi reported in
(2019)20 SCC 47, now the application under section 14 of the
SARFAESI Act can be filed even before the Chief Judicial Magistrate.
8] Though the provisions in section 14 requires that the DM
or CMM (CJM) shall pass suitable orders for the purpose of taking
possession of the secured assets within a period of thirty days from
the application or in case of reasons beyond control, within sixty
days. The Hon'ble Supreme Court in C. Bright Vs. District Magistrate
(2021)2 SCC 392 held that the provision of the SARFAESI Act
empowering District Magistrates / CMM to take possession of
secured assets of defaulting borrowers within 60 days period for
handing them over to the lending financial institutions is “directory”
and not “mandatory” in nature as banks cannot be made to suffer for
the delay on the part of the government officers. It is held that
inability to take possession within time limit does not render the
District Magistrate/CMM “Functus Officio”. Therefore, irrespective
of there being some delay caused due to unavoidable situations, this
authority is not powerless to provide assistance as required under
section 14 of the SARFAESI Act.
9] I have gone through the contents of the application,
affidavit as required by the proviso to section 14 and the entire
record produced with the application. All the relevant documents,
the copies of which are filed on record are physically verified. The
original documents are returned back to the applicant. The above
referred requirements are found duly complied.
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10] I am satisfied that the respondent is the borrower of the
applicant and have created security interest in the property
mentioned in the application in favour of the applicant. I am further
satisfied that the applicant is holding valid and subsisting security
interest over the property. The claim of the applicant is within the
limitation period. The borrower is seen to have committed default in
repayment of the financial assistance and the account of the
borrower has been classified as a nonperforming asset.
11] Notice under section 13(2) of the SARFAESI Act has been
issued by the applicant and is served on the borrower. It can be seen
that even after the service of notice the borrower neither raised any
lawful objection to the notice nor has repaid the financial assistance.
Thus, the applicant is now entitled to take possession of the secured
assets.
12] As per section 14(1-A) of the SARFAESI Act, the District
Magistrate or the Chief Metropolitan Magistrate may authorise any
officer subordinate to him,— (i) to take possession of such assets and
documents relating thereto; and (ii) to forward such assets and
documents to the secured creditor. The provisions in section 14(2)
further provides that the Chief Metropolitan Magistrate (CJM) 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.
13] Learned advocate representing the applicant requesting
to appoint commissioner or receiver for the purpose of assisting to
take possession of the secured assets. Recently, in regards to the
appointment of Advocate as a Commissioner is upheld in the case
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“NKGSB Co-operative Bank Ltd. Vs. Subir Chakravarti and others”
reported in 2022 Live Law (Supreme Court) 212. Hon'ble Supreme
Court has held that “Advocate can be appointed as a 'Commissioner'
to assist the court to implement the handing over the possession
under the said provision. Therefore, Advocate can be appointed as a
commissioner upon the fees of the same”.
14] As per the provision of section 14 of the SARFAESI Act,
2002 any subordinate officer can be appointed for the purpose of
assisting the applicant for delivery of possession of the secured asset.
The property is secured asset and is situated within the local limits of
Vasai Virar City Municipal Corporation. The Advocate can
accordingly be appointed for the purpose of a completing the task as
required by the section 14 of the Act. In view of the above referred
situation, I pass the following order.
ORDER
1. Application is allowed.
2. Advocate Mr. Sudhir Bapurao Jagdale (MAH/5287/2016) is
appointed as a “Court Commissioner” to take possession of the
secured assets viz. “all that premises being flat/shop
admeasuring 770 square feet or thereabout bearing Flat
No.601, 6th floor, A-Wing, of the building Orchid Heights under
construction in housing complex be known as Matoshree
Nagar” as mentioned in the schedule of property, by taking
such steps and using such force including breaking open the
lock thereof or taking assistance of concerned Police Station, if
required, at the expenses of the applicant and shall deliver
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possession thereof along with documents/articles, if any, found
therein to the authorized officer of the applicant after
preparing panchnama and taking inventory of the secured
asset.
3. Issue writ of commission accordingly on payment of P.F. and
Rs.15,000/- (Rupees Fifteen thousand only) inclusive of
travelling expenses towards the commission fee directly to the
Court Commissioner within 15 days from the date of writ.
Court Commissioner to file the compliance report within 45
days from the date of receipt of the Writ.
4. Applicant to give contact details of authorized person within 10
days with whom Court Commissioner to co-ordinate.
Digitally signed
by SUBHASH
SUBHASH KRUSHNARAO
KRUSHNARAO FOKMARE
FOKMARE Date: 2024.11.26
21:19:28 +0900
Thane (S.K. Fokmare)
Date : 26/11/2024 Chief Judicial Magistrate, Thane
