Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 – ss.13, 14, 17, 32 – Respondent No.2 was sanctioned credit facilities amounting to Rs.2.68 crores by Bank – Property measuring 3 acres 2 Guntas was offered as security and a charge was created (Secured Asset) – As per the Bank, respondent no.2 did not repay the loan and his account was classified as Non-Performing Asset (NPA) – Ultimately, the Bank took possession of the secured asset – Auction notice issued – Challenged by respondent no.2 – Rejected by High Court – Respondent no.2 filed application u/s.17(1) – Dismissed by Debts Recovery Tribunal (DRT) for delay – Appellate Tribunal (DRAT) dismissed appeal– Respondent no.2 filed complaint u/s.200, CrPC against appellants who were working as Deputy General Managers in the Bank (accused no.1) alleging connivance with auction purchaser which caused wrongful loss to him – FIR registered – Appellants filed petition u/s.482, CrPC – Dismissed – Held: SARFAESI Act is a complete code in itself which provides the procedure to be followed by secured creditor and also the remedy to the aggrieved parties including borrower – In such circumstance, if there is any discrepancy in the manner of classifying the account as NPA or in the manner in which the property was valued/auctioned, the DRT is vested with power to set aside such auction at the stage after the secured creditor invokes power u/s.13 – Though in the instant case the application filed by Complainant before DRT and the appeal before DRAT were dismissed, the remedy ought to have been availed diligently – In that direction the further remedy by approaching the High Court to assail the order of DRT & DRAT is also available in appropriate cases – Instead, after dismissal of application before DRT, the impugned complaint was filed as an intimidatory tactic and an afterthought which is an abuse of the process of law – Criminal proceeding not sustainable in a matter of present nature – Complaint and the order passed therein as also the FIR insofar as the appellants are concerned stand quashed – Complainant at liberty to avail his remedies if he assails the order passed by DRT & DRAT – Code of Criminal Procedure, 1973 – ss. 200, 482 – Penal Code, 1860 – ss.511, 109, 34, 120-B, 406, 409, 420, 405, 417 & 426 – Security Interest (Enforcement) Rules, 2002.
Allowing the appeal, the court
HELD: 1.1 The fact that the account of the Complainant was classified as NPA is also the admitted position. In that regard when a right accrues to the secured creditor to enforce the security interest, the procedure as contemplated under Sections
13 and 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) is to be resorted to. Further the Security Interest (Enforcement) Rules, 2002 provides the procedure to be adopted with regard to the valuation and sale of the secured asset. If the Complainant, as a borrower had any grievance with regard to any of the measures taken by the secured creditor invoking the provisions of Section 13 of the SARFAESI Act, the remedy as provided under Section 17 of the SARFAESI Act was to be availed. It is in that light the High Court in the writ proceedings had arrived at such conclusion. At that point in time the Complainant availed the remedy under the Act by filing the application under Section 17. Since there was delay in filing, an application was filed under Section 5 of the Limitation Act seeking condonation of delay. The same was rejected on the ground of delay against which an appeal is said to have been filed before the DRAT and it was pending though it is now stated to be dismissed. It is at that stage when it was still pending the impugned complaint in P.C. No.389/2016 was filed, wherein through the order dated 20.05.2016 it had been referred to an investigation under Section 156 (3) of the Cr.PC. The sanction of loan, creation of mortgage and the manner in which the sanctioned loan was to be released are all contractual matters between the parties. The Complainant is an industrialist who had obtained the loan in the name of his company and the loan account was maintained by the Canara Bank in that regard. The loan admittedly was sanctioned on 16.03.2009. When at that stage the amount was released and if any amount was withheld, the Complainant was required to take appropriate action at that point in time and avail his remedy. On the other hand, the Complainant had proceeded with the transaction, maintained the loan account until the account was classified as NPA on 15.01.2013. Initially the issue raised was only with regard to the under valuation of the property when it was brought to sale. On that aspect, as taken note the writ proceedings were filed and the Single Judge having examined, though did not find merit had reserved liberty to raise it before the DRT, which option is also availed. It is only thereafter the impugned complaint was filed on 20.05.2016. [Paras 13, 15][1031 B-F; 1032 E-F]
1.2 The SARFAESI Act is a complete code in itself which provides the procedure to be followed by the secured creditor and also the remedy to the aggrieved parties including the borrower. In such circumstance as already taken note by the High Court in writ proceedings if there is any discrepancy in the manner of classifying the account as NPA or in the manner in which the property was valued or was auctioned, the DRT is vested with the power to set aside such auction at the stage after the secured creditor invokes the power under Section 13 of SARFAESI Act. The action taken by the Banks under the SARFAESI Act is neither unquestionable nor treated as sacrosanct under all circumstances but if there is discrepancy in the manner the Bank has proceeded it will always be open to assail it in the forum provided. Though in the instant case the application filed by the Complainant before the DRT has been dismissed and the Appeal No.523/2015 filed before the DRAT is also stated to be dismissed the appellants ought to have availed the remedy diligently. In that direction the further remedy by approaching the High Court to assail the order of DRT and DRAT is also available in appropriate cases. Instead the petitioner after dismissal of the application before the DRT filed the impugned complaint which appears to be an intimidatory tactic and an afterthought which is an abuse of the process of law. In the matter of present nature if the grievance as put forth is taken note and if the same is allowed to be agitated through a complaint filed at this point in time and if the investigation is allowed to continue it would amount to permitting the jurisdictional police to redo the process which would be in the nature of reviewing the order passed by the Single Judge and the Division Bench in the writ proceedings by the High Court and the orders passed by the competent Court under the SARFAESI Act which is neither desirable nor permissible and the banking system cannot be allowed to be held to ransom by such intimidation. [Paras 16, 17][1032 F-G; 1034 A-E]
Authorised Officer, Indian Overseas Bank & Anr. v. Ashok Saw Mill (2009) 8 SCC 366 : [2009] 11 SCR
599 – relied on.
1.3 ORDER
(i) The complaint bearing P.C. No.389/2016 and the order dated 20.05.16 passed therein as also the FIR No.0152/2016 insofar as the appellants herein are concerned stand quashed.
(ii) Insofar as the grievance of the Complainant, he is at liberty to avail his remedies in accordance with law if he chooses to assail the order dated 12.06.2015 passed in I.R. No.3044/2014 and the order dated 31.05.2017 passed in Appeal No.523/2015 by the DRT and DRAT respectively in accordance with law. [Para 19][1035 B-C]
State of Haryana v. Bhajan Lal (1992) Supp (1) SCC
335 : [1990] 3 Suppl. SCR 259; United Bank of India v. Satyawati Tondon & Ors. (2009) 1 SCC 168 : [2008] SCR 28; General Officer Commanding, Rashtriya Rifles v. Central Bureau of Investigation & Anr. (2012) 6 SCC
228 : [2012] 5 SCR 599 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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