SARFESI Act : Filing Writ Petition when Securitisation Application is Pending is an Abuse of Process [JUDGMENT]

Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 - filing a writ petition when an SA is pending is an abuse of process.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

DAMA SESHADRI NAIDU, J.

O.P.(DRT) No. 50 of 2018 (O)

Dated: 12th July 2018 

AGAINST THE ORDER IN SA 66/2018 of DEBT RECOVERY TRIBUNAL, ERNAKULAM 

PETITIONER

ABDUL AZEES

BY ADVS.SRI.AYPE JOSEPH SRI.C.K.ABDUL JABBAR 

RESPONDENTS

1. THE AUTHORIZED OFFICER PHOENIX ARC, LTD REGD.OFFICE, 5TH FLOOR, DANI CORPORATION PARK,158, CST ROAD, KALINA, SANTACRUZ(E) MUMBAI-400 098 

2. THE REGISTRAR, DEBT RECOVERY TRIBUNAL NO.1, HOUSING BOARD BUILDING, 5TH FLOOR, PANAPILLY NAGAR, ERNAKULAM- 682 020 

BY STANDING COUNSEL

J U D G M E N T 

The petitioner, a borrower in default, on 08.05.2018, obtained a conditional direction of stay of dispossession. He had to deposit Rs.1 crore within two months. He had not. But he came up with I.A. No.1170 of 2018, seeking extension of the interim stay. 

2. The petitioner's counsel has submitted that the petitioner has produced Ext.P7 medical certificate to establish that he was taken ill and could not comply with the condition. 

3. A condition imposed, it ought to be complied with. Lest there should be no judicial sanctity. Without complying with the condition, it is inequitable for a suitor to seek further favour or accommodation from the Court. Nor can he insist that the stay ought to be extended. The petitioner seeks three more months to comply with the interim direction. 

4. The respondent's counsel submits that the loan turned Non-Performing in 2016, and Section 13(2) notice under the SARFESI Act was issued then itself. Under Section 14 of the Act, when the Chief Judicial Magistrate's Court appointed an Advocate Commissioner to take possession of the property, the petitioner filed S.A. No.66 of 2018 and obtained Ext.P4 interim order. It was before this Court’s interim direction. As seen from the record, the Debts Recovery Tribunal-I, Ernakulam. issued an interim stay thus: 

"Without going into the merits of the contentions raised by the applicants in their SA which this Tribunal would be able to consider and appreciate only after affording an opportunity of hearing to the defendant company, with a view to grant an interim reprieve in the interregnum, the defendant company is directed to defer taking coercive possession of the secured asset if and only if the petitioners pays a sum of Rs.25,00,000/- (Rupees Twenty Five Lakhs only) into the loan account maintained with the defendant on or before 28.02.2018 and another sum of Rs.75,00,000/- (Rupees Seventy Five Lakhs only) is so paid on or before 30.03.2018. It is made clear that on the failure of the applicants to comply with the above conditions the defendant company would be free to surge ahead with its further SARFAESI measures in accordance with law." 

(italics supplied) 

5. The petitioner flouted this. 

6. Instead, the petitioner has filed this writ petition. Again he obtained another interim direction. Here, too, he has failed to honour the condition. 

7. I may observe that expansive as the Court’s jurisdiction under Article 226 of the Constitution of India is, I am afraid, it does not go to the extent of interdicting the contractual terms, especially in a financial transaction involving public money. 

8. First, filing a writ petition when an SA is pending is an abuse of process. Besides that, on both occasions—once before the Tribunal and now here—the petitioner has failed to exhibit his good faith. He has not paid even a part of the amount. 

9. At this point, the petitioner's counsel has submitted that this Court may direct the Tribunal to dispose of the S.A. expeditiously. 

10. It is open for the petitioner to make a request before the Tribunal. And I am sure that Tribunal will consider that request subject to its docket pressure. 

I see no merit in the writ petition. So I dismiss it.