Housing Development Finance Corporation Ltd. v Union of India and Others

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC SATURDAY, THE 17TH DAY OF NOVEMBER 2012/26TH KARTHIKA 1934 WP(C).No. 25297 of 2012 (J) --------------------------CMP.3340/2012 of CHIEF JUDL.MAGISTRATE, ERNAKULAM PETITIONER(S): ------------- HOUSING DEVELOPMENT FINANCE CORPORATION LTD, (HDFC LTD.IN SHORT),RAMON HOUSE 169 BACK BAY RECLAMATION,MUMBAI-400 020 REPRESENTED BY A S SACHIN,ASSISTANT MANAGER(LEGAL) WORKING AT HDFC HOUSE,3RD FLOOR,RAVIPURAM JUNCTION M.G.ROAD,KOCHI-682015. BY ADV. SRI.C.P.SAJI RESPONDENT(S): -------------- 1. UNION OF INDIA, REPRESENTED BY ITS SECRETARY MINISTRY OF FINANCENEW DELHI. 2. GOVERNMENT OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO THE GOVERNMENT SECRETARIAT,THIRUVANANTHAPURAM. 3. SAJU.K.A,, AGED 37 YEARS S/O.ABDUL KHADAR.T.K,KADAVIL HOUSE,6/802A VALLATHOL JUNCTION,THRIKKAKARA.P.O,KOCHI-682021 NOW WORKINGAT POOVATHUMMOOTTIL KADAVIL HOUSE EDAPPALLY.P.O,KOCHI-682024. 4. SUNAYA SAJU, W/O.SAJU.K.A,KADAVIL HOUSE,6/802A VALLATHOL JUNCTION,THRIKKAKARA.P.O,KOCHI-682021 NOW WORKINGAT POOVATHUMMOTTIL KADAVIL HOUSE EDAPPALLY.P.O,KOCHI-682024. BY SRI.P.PARAMESWARAN NAIR,ASG OF INDIA BY SRI.PEEYUS A.KOTTAM BY GOVERNMENT PLEADER RINNY STEPHEN CHAMAPARAMBIL THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 1711-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 25297 of 2012 ## APPENDIX PETITIONER(S) EXHIBITS P1 TRUE COPY OF THE HOME LOAN AGREEMENT DATED 20.01.2007 EXECUTED BY THE 3RD & 4TH RESPONDENTS IN RESPECT OF ACCOUNT NO.313466952 P2TRUE COPY OF THE SALE DEED NO.3160 OF 2007 OF SUB REGISTRY OFFICE, TRIPUNITHURA DATED 21.6.2007 P3TRUE COPY OF THE LAWYER NOTICE DATED 13.2.2012 ISSUED BY THE PETITIONER TO THE 3RD AND 4TH RESPONDENTS P4TRUE COPY OF THE DEMAND NOTICE DATED 5.3.12 ISSUED BY THE PETITIONER TO THE 3RD AND 4TH RESPONDENTS P5TRUE COPY OF THE DEMAND NOTICE DATED 6.3.12 PUBLISHED IN NEW INDIAN EXPRESS DAILY P6TRUE COPY OF THE DEMAND NOTICE DATED 6.3.12 PUBLISHED IN MATHRUBHUMI DAILY P7TRUE COPY OF THE CMP.NO.3340/12 DATED 3.9.12 FILED BY THE PETITIONER BEFORE THE HONOURABLE CHIEF JUDICIAL MAGISTRATE, EKM. P8TRUE COPY OF THE ORDER DATED 14.9.12 OF THE CHIEF JUDICIAL MAGISTRATE COURT, EMK, ISSUED TO THE ADVOCATE COMMISSIONER IN CRL.M.P.3340 OIF 2012 P9TRUE COPY OF THE WRITTEN EXTRACT OF THE PROCEEDINGS OF CHIEF JUDICIAL MAGISTRATE COURT, EKM, IN CRL.M.P.3340 OF 2012 FROM 10.10.12 TO 15.10.12 P10TRUE COPY OF THE INTERIM REPORT FILED BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, EKM, BY THE ADVOCATE COMMISSIONER DATED 10.10.12 IN CRL.M.P.3340/12 /true copy/ PA To Judge ## **ANTONY DOMINIC, J** ........................................ W.P.(C).25297/2012 .............................................. Dated this the 17[th] day of November, 2012 ## **JUDGMENT** Petitioner is a Bank. Respondents 3 and 4 availed of a housing loan of Rs.20 Lakhs from the petitioner Bank. As security for the loan, they mortgaged the property belonging to them. Default was committed and therefore, proceedings under the SARFAESI Act were initiated. Finally, Ext.P7 application under Section 14 of the SARFAESI Act was made to the Chief Judicial Magistrate, Ernakulam. On that application, Ext.P8 order was passed. By Ext.P8, an Advocate Commissioner was appointed to take over possession of the petition scheduled secured asset. It was also directed that the Commissioner shall be at liberty to apply for police assistance to the local Sub Inspector after obtaining sanction from the Court. 2. It appears from Ext.P10, the interim report submitted by the Advocate Commissioner on 10[th] **W.P.(C).25297/12** 2 October, 2012, that he inspected the secured asset on 21.9.2012 in the presence of the officials of the petitioner when respondents 3 and 4 and their men resisted his entry into the petition scheduled property for complying with Ext.P8 order. Therefore, in this report, the Advocate Commissioner requested for police assistance as well as the assistance of the Village Officer. Petitioner states that the application was considered on 10.10.2012 and was adjourned to 15.10.2012. On 15.10.2012 the Chief Judicial Magistrate issued notice to respondents 3 and 4 and posted the case to 18.1.2013. It is aggrieved by this proceedings, petitioner has filed this writ petition. 3. The contention raised by the learned counsel for the petitioner is that in an application filed under Section 14 of the Act, the defaulters are not entitled to notice. If the defaulters are not 3 ## **W.P.(C).25297/12** entitled to notice in an application under Section 14 of the Act, there was no warrant for the Magistrate to have issued notice on Ext.P10 interim report filed by the Commissioner. It is also the case of the petitioner that if this method is upheld that will defeat the very purpose of Section 14 of the Act which is enacted for avoiding delay in the matter of enforcement of security interest. 4. Section 14 of the Act provides that where the possession of any secured asset is required to be taken by the secured creditor, the secured creditor may, for that purpose, request in writing the Chief Metropolitan Magistrate or the District Magistrate, within whose jurisdiction the secured asset is situated, to take possession thereof and the Magistrate shall, on such request, take possession of such asset and forward such asset to the secured creditor. 4 ## **W.P.(C).25297/12** 5. Section 14 of the Act has been interpreted by the Apex Court, this Court as also by other High Courts and it has been held that a mandatory duty is cast on the Magistrate to render assistance to the secured creditor and that in passing such an order, the Magistrate is not adjudicating any dispute. It has also been held that in a proceedings under Section 14 of the Act, the defaulters are not entitled to notice. This view has been taken by this Court in **C.R.Sindhu v. State of Kerala and Others (2008 (2) KLT 736)** and **M/s.Sundaram BNP Paribas Home Finance Ltd. v. State of Kerala and Others (2009 (1) KLT 56)** . Similar view has been taken by the Madras High Court in **State Bank of India v. M/s.Kathikkai Tea Plantations, Melur and Others (AIR 2009 Mad. 152)** and Bombay High Court in **Housing Development Finance Corporation Ltd. (HDFC Ltd.) v. State of Maharashtra and Others (AIR** 5 ## **W.P.(C).25297/12** ## **2012 Bom. 19)** . 6. It was in view of the above that the learned Magistrate passed Ext.P8 order without issuing notice to the defaulters. That order itself provides that the Commissioner appointed by the Court will be at liberty to apply for the assistance of the police and the Village Officer. When, on the strength of such an order, in view of the resistance offered, the Advocate Commissioner made an interim report seeking assistance of the police and the Village Officer, there was absolutely no necessity or warrant for the Magistrate to have issued notice to the defaulters and posted the case for their appearance. Therefore, I am of the view that in the procedure adopted by the Magistrate by issuing notice to the defaulters and posting the case for their appearance, the learned Magistrate has committed an illegality. I am also in agreement with the 6 ## **W.P.(C).25297/12** learned counsel for the petitioner that if such a procedure is upheld, that will defeat the very purpose of Section 14 of the Act and will delay the whole proceedings itself. 7. For the aforesaid reasons, I set aside the order dated 15.10.2012 passed by the learned Magistrate issuing notice to respondents 3 and 4 and direct that on the production of a copy of this judgment, learned Magistrate will pass appropriate orders on Ext.P10, the interim report submitted by the Advocate Commissioner. This shall be done without any delay in the matter. Writ petition is disposed of as above. ## **Sd/- ANTONY DOMINIC, JUDGE** mrcs /true copy/ sd/- P.A. To Judge