IN THE COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH

IN THE COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH

CWP No.__________of 2015

Memo of Parties

1)United Bank of India, a body corporate, constituted under the banking companies (Acquisition and transfer of undertaking) Act, 1970 having its head office at 11, Hemanta Basu Sarani, Kolkata-700001 and its region office at SCO 32-33-34, Sector-17-C, Chandigarh.

2) The Authorised officer, Sh. Surinder Mohan Sharma (Chief managaer) S/o Sh.Om Parkash Sharma, Residence of Gandhi Nagar, near Bank Colony Ambala.

....................PetitionerVersus

1. State of Punjab through Chief Secretary, Civil Secretariat, Punjab Chandigarh.

2. Deputy Commissioner cum District Magistrate Jallandhar.3. Additional Deputy Commissioner Jallandhar.

.................Respondents

Chandigarh

Rajvir Singh

Dated:-

Advocate

Council for the PetitionerCivil writ petition under Articles 226/227 of the constitution of India for the issuance of a writ in the nature of mandamus for director of respondents no.2 & 3 to decide the case dated 10-10-2014 filed by United Bank of India (Annexure P-1) for taking possesion by Police Assistance under Securitisation & Reconstruction of Financial Assets & Enforcemnet of Security Interest Act 2002 (SARFAESI Act, 2002).

And

Any other order or direction which this hon'ble court may deem fit in the facts and circumstances of the case may kindly be issued.

Most Respectfully Showeth:-1. The first writ petitioner United Bank of India is a body corporate constituted under the banking companies (Acquisition and Transfer of Undertaking) Act, 1970, having its head office, Hemanta Basu Sarani, Kolakata-700001 and at all material times was and still carrying on business of banking through any of its Regional office situated at Region Chandigarh, SCO 32-33-34 Sector-17-C Chandigarh).That the petitioner No-2 is the authorised officer of bank c/o sec 17-C, SCO 32-33-34 Chandigarh being the citizen of India and Chief Manager in Region Office Chandigarh. As such he is entitled to invoke the extra ordinary Jurisdiction of their Hon'able Court under Article 226-227 of the constitution of India.

2) The 1st respondent is the state of Punjab which discharges public and statutory duties and functions through its officers/authorities/instrumentalities relating to management of finances of the state government. It is concerned with all economic & financial matters affecting the state as a hole including mobiliztion of resources and allocation of resources for infrastructal development, social Welfare, Human Development and Administrative purposes. The writ petitioner No-2 is one of such Oficers/Authorties/Instrumentalities.Respondent No-3 has been appointed by Respondents No-2 in order to carryout various administrative functions in the concerned District including exercise of powers and duties as prescribed in SARFAESI ACT 2002. The respondents are therefore all "State " within the meaning of article 12 of the constitution of India and "Person Or Authority" within the meaning of article 226 of the constitution of India.3. That the brief facts of the case are that the United Bank of India filed a petition before the respondents No-3 on 10-10-2014 (Annexure P-1) for appointment and duty Magistrate and Police Assistance in taking possession of Assets under SARFAESI Act 2002 with the submission that M/S Ace Industries, through its prop. Mrs Charanpreet Kaur w/o S. Amritpal Singh R/o Flat no-5, Backside Industrial Estate Jallandhar (Borrower) had avail credit facilities from the Petitioner bank and there after the said Borrower although obtained the loan amount and enjoyed the credit facilities but did not operate their respective accounts in a reputed manner. Consequently, all those account became irregular. In spite of repeated requests, Verbal as well as written, by respective branch at the said bank, the borrower did not regularize their accounts. Hence the said bank classified total accounts as non-performing assets as per Reserve Bank of India guidelines.That it is further more specifically to say, that the petitioner No-2, being the authorised officer United Bank of India, after such classification initiated recovery action against those borrower's and /or guarantors by invoking powers conferred upon him under the relevant provision of SARFAESI Act 2002 and the security interest (Enforcement) Rule.2002.

Respected Sir, due to non payment of bank, Petitioner No-1, deferred Non-Performing assets on 30-06-2014 as per guidelines relating to assets classification issued by Reserve Bank of India. Because the said borrower's although obtained the loan amount and enjoyed the credits facilities but did not operate their account in regular manner. Consequently, all those accounts became irregular. In spite of many requests, verbal as well as written, by respective branch of the said bank, the borrower did not regularise accounts in the A/c of M/s ACE Industries as NPA as per guideline relating to assets classification issued by Reserve Bank of India.

Petitioner Bank has compiled all the legal formalities as per the Sarfaesi ACT 2002 which bank issued intimation letter to the Borrower as on 02-07-2014 (Annex.-P-2) in clause after that 60 days notice (Demand notice) sent to the borrower and guarantor as on 05-07-2014 through Regd. AD u/s 13(2) of the securitization and reconstruction of financial assets and enforcement of security interest Act 2002 (SARFAESI ACT, 2002) as per annexure P-3 (Attached).

Respected Sir, similar the petitionor bank again wait for borrower & guarrantor after expiry of 60 days. 60 days expires on 05-05-2014, but before symbolic possesum petitioner bank issued a public notice in two newspaper one in english and another is Punjabi jalandhar Bani as per Reserve Bank of India guidelines. But the borrower and gaurantor did not serious about demand notice and Public notice.

Respected Sir, Than Petitioner No-2 i.e. Authorised officer pasted possession notice as on 24-09-2014 on the outer wall of the property and the same photographs has been taken as per Sarfaesi Act 2002, but the borrower never came forward to fulfill his liabilities and there after bank published the possession notice in two vercauland language. One in english and one in Punjabi.

That it is further more specifically to say, the petitioner No-2, being the authorised officer of United Bank of India, after such classification initial recovery against borrower and or guarantors by invoking powers conferred upon him under the relevant provisions of SARFAESI ACT 2002 and the security interest, (Enforcement Rules 2002).

Respected Sir, It is further submitted that petitioner bank due to Nonpayment declared this (NPA) Non Performing assets as on 30-06-2014, according to guidelines of Reserve Bank of India. Petitioner bank has compiled all legal formalities as per act, but even bank on Telly name respects,mensor on dated 05-07-2014 issue a demand notice u/s 13 (2) to all the Borrowers and Guarantors. Through regd. AD: under the securitisation and reconstruction of financial assets and enforcement of security interest ACT 2002 (SARFAESI ACT, 2002). The copy of notice is attached as per Annexure- .

Similarly the petitioner Bank again wait for Borrower and Guarantor for 15 days. After expiry of 60 days and after 15 days, the petitioner bank issued a public notice with photos in two newspapers one in english and another is Jallandhar Jagbani (Copy Attached Annexure) thats why Borrower & Guarantor may be serious, in Public Notice. Petitioner mention against M/s ACE Industries i.e (Chanpreet Kaur, Amritpal Singh, Ranjit Kaur availed credit facility and Car loan and defaulted with Bank due to this A/c becomes NPA, This information is published by in the interest of the bank/ Financial Institution and the public in large to exercise due caution while dealing with these persons. An person will be doing so at his own cost, risk and consequence. That the petitioner bank request to District Magistrate Kindly pass the necessary orders because huge public money is involved and the amount in this account is 9241801.37/- (Ninety two lakh forty one thousand eight hundred one & thirty seven paisa only) due as on 30-06-2014 with further interest and other charges/Legal expenses has been blocked by the borrower and therefore the petitioner bank is suffering from a huge loss. It is further submitted here that even a notification issued by Govt. of India on 08-02-2013 specifically directed by way amendment u/s 6 that after satisfying the District Magistrate/ Chief Metropolitan Magistrate satisfying the contents of the affidavit pass suitable order for the purpose of taking possession of the secured assets which clearly show that District Magistrate should pass an order at possession without any delay as a huge public money has been involved. The copy of the application dated 10/10/2014 as annexure and notification dated 08-02-2013 is attached as annexure and the applicant filled by the petitioner is attached as annexure.8.That upon filing of those applications, writ petitioners being the secured creditor was under impression that the respondent No.3 shall dispose of those applications by passing effective orders within a very short period so that writ petitioners may get physical possession over the Secured Assets. However, to their utter surprise, they have witnessed that respondent authorities instead of taking possession of such assets and forwarding the same to the writ petitioners, pettioner bank applied file for duty Magistrate and Police Assistance u/s 14 as on 10/10/2014 (Application attached) and summons issued to bank and parties as on 22/10/2014 for first hearing as on 07/11/2014 and after fixing date one after another for hearing i.e 25/11/2014, 12/12/2014, 19/12/2014, 30/12/2014, and/or for ensuring appearance of borrowers or guarantors and keeping the application pending for indefinite period when no such adjudication is necessary in this regard. As on 30/12/2014 when we present for hearing at 11.00 am at ADC office then ADC sahib and his reader said that no body is their from borrower side so hearing should be on 3.00 pm on same day but suddenly ADC sahib said that i am very busy at 3.00 pm and put up another date for hearing i.e 20/01/2015 at Jalandhar.

9.It is submitted that the provision of Section 14 postulates that when an application under Section 14 is made before the District Magistrate, such District Magistrate is bound to take possession of the Secured Assets and hand it over to the Secured Creditor who made the request. However, in the instant case, in none of the applications made by secured creditor in respect of various accounts, the respondent District Magistrate passed any order of physical possession for which the writ petitioners have been prejudiced immensely. 13. That it is unfortunate to state that the respondent No.3, being a statutory authority under the SARFAESI Act, 2002 even after receipt of the said letters did not reply to those letters or act upon it. Uptil now no communication has been made by the office of said District Magistrate with regard to disposal of those pending applications. The writ petitioner are simply groping in the darkness and failed to understand as to why and for which specific reason, the respondent No.3 has not taken possession of the properties in connection with defaulting accounts. 14. It is submitted that an unfettered power has been given to the respondent No.3 for taking physical possession of the mortgaged properties provided those are situated within his jurisdiction. However, in the instant case, despite having proper jurisdiction and admission of application under section 14 of SARFAESI Act, 2002, the said respondent is not disposing of the applications for the reasons best known to them. No specific reasons have been assigned by the said respondent for not disposing of such applications.

15. That inordinate delay caused by the respondent No.3 in disposing of said section 14 applications has frustrated the vary basic object and purpose underlying the enactment of the SARFAESI Act, 2002 which is to provide an expeditious mechanism for the realisation of the dues of banks and financial institutions without the intervention of the court.

16. That SARFAESI Act, 2002 was enacted to evolve means for faster recovery of the Non-Paying Assets. This Act enables the banks and financial institutions to realize long term assets, manage problems of liquidity, assets liability and by exercising powers to take possession of the securities to improve recovery by selling them and thus reduce Non-Performing Assets. That being so, it is incumbent upon the respondent No.3 to dispose of the application of said bank made for getting physical possession of the secured assets at the earliest without asking for any clarifications.17.That the provision of section 14 clearly indicates that when a request is made by the secured creditor, the Magistrate is bound to take possession of the assets and hand it over to the secured creditor who made the request. Here the respondent Magistrate has no discretion and he is not expected to pass any order save and except to take possession of the asset and hand over it to the secured creditor. 18.That the respondent Magistrate should have considered the fact that 1/because of his inordinate delay in disposing of those applications, the bank is unable to realize their due amount by selling those properties of defaulting borrowers/ guarantors inasmuch as recovery of huge public money has been stalled. Hence such inaction on the part of the respondent No.3 has been challenged before this Hon'ble Court by invoking jurisdiction under Article 226 of the Constitution of India before this Hon'ble Court

19. It is the settled proposition of law that District Magistrate is not required to give any notice either to the borrower/ guarantor or to any third party. He is to verify only from the bank whether notice under section 13(2) of the Act of 2002 has been served or not and whether secured assets fall within his jurisdiction or not. There is no power vested in the District Magistrate to adjudicate upon any issue of any kind pertaining to secured assets. In view of such provision it is submitted that non-disposal of application thereby not taking possession of secured assets by the respondent Magistrate is \I/holly without jurisdiction.

20.That if the records relating to the said accounts are produced before the Hon'ble Court, it could be seen that there was no bona fide deliberation or consideration for not taking possession of the secured assets by respondent Magistrate and the said Magistrate arbitrarily, whimsically and without any basic reason sat tight over the issue and not disposing of the applications. Such conduct of the respondent Magistrate being unwarranted and glaring instance of miscarriage of justice which calls for serious intervention of this Hon'ble Court.

22. That there is great urgency in the matter since your Petitioners reasonably apprehends that the defaulting borrower by taking advantage of the pendency of section 14 application might sell out their properties to defeat the purposes of the injunctions/interim reliefs sought and try to make the present writ petition in fructuous for which reason leave under Rule 27 of the Rules of this Hon'ble Court relating to applications under Article 226 of the Constitution of India is being sought to move the present application without prior service of notice or copy hereof on any of the Respondents.23. That the Petitioner has taken out no other application in respect of the self same cause of action. 24. That the records of the present case are lying in the offices of the Respondents which are within the territorial jurisdiction of this Hon'ble Court and the cause of action hereof arose substantially within the aforesaid jurisdiction for which reason, this writ petition is being instituted in the Appellate Side of this Hon'ble Court.

25. That this application is made bonafide and for the ends of justice.