M/s International Asset Reconstruction Company Limited Vs. M/s Maruthi Technologies - Court Judgment

- 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE5H DAY OF JUNE, 2024 PRESENT THE HON’BLE MR. N.V. ANJARIA, CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE T.G. SHIVASHANKARE GOWDA WRIT APPEAL No.231 OF2024(GM-RES) C/W WRIT APPEAL No.230 OF2024(GM-RES) IN W.A. No.231 OF2024BETWEEN:

1. . M/S. INTERNATIONAL ASSET RECONSTRUCTION COMPANY LIMITED HAVING ITS BRANCH OFFICE AT: # A-601/602/605, 6TH FLOOR, 215 ATRIUM, KANAKIA SPACES ANDHERI KURLA ROAD, ANDHERI (EAST), MUMBAI – 400 093 REPT. BY ITS SENIOR VICE PRESIDENT, MR. SIDHHARTH SHAH. ... APPELLANT (BY SRI P.S. RAJAGOPAL, SENIOR ADVOCATE FOR SMT. SREEDEVI K.B. & SRI PATIL J.M., ADVOCATES) AND:

1. . MS. JHANSIRANI VINODKUMAR W/O LATE VINODKUMAR, AGED ABOUT43YEARS, R/A No.59/4, 2ND BLOCK, DODDABOMMASANDRA, VIDYARANYAPURA, BENGALURU – 560 072. 2 . SRI VIJAY KUMAR M D S/O SRI MALLAN GOWDA, AGED ABOUT38YEARS R/AT KHB COLONY, - 2 - KUSHTAGI ROAD, SINDHANURU – 584 128. 3 . SRI N.G. DEEPAK S/O LATE N.K. GUNDU ROAD, AGED ABOUT45YEARS, R/AT # 34, SRI ANANTHAKRUPA, GM COTTAGES, DODDABIDARAKALLU, NAGASANDRA POST, BENGALURU – 560 073. 4 . SRI DINESH NAYAK N S/O SRI RAMAKRISHNA NAYAK, AGED ABOUT51YEARS, R/AT # 60, VASTHA KUTEERA, III PHASE, BLUEJAY, KARIHOBANAHALLI, NAGASANDRA POST, BENGALURU – 560 073. 5 . SRI SATISH KUMAR MITTAL S/O SRI CHET RAM MITTAL, AGED ABOUT50YEARS R/A # 403, 4TH FLOOR, BINDU AMULYA, ANJANA NAGAR, MAGADI MAIN ROAD, BENGALURU – 560 091. 6 . SRI VEDPRAKASH MITTAL S/O SRI CHET RAM MITTAL AGED ABOUT48YEARS R/AT #404, 4TH FLOOR, BINDU AMULYA, ANJANA NAGAR, MAGADI MAIN ROAD, BENGALURU – 560 091. 7 . SRI T DIVAKARA REDDY S/O THIMME REDDY AGED ABOUT58YEARS R/AT # 712, 3RD MAIN ROAD NEAR GANESH TEMPLE HMT LAYOUT, NAGASANDRA BENGALURU – 560 073. 8 . M/S MAROTIA STEEL ENGINEERING PVT. LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT - 3 - HAVING ITS REGISTRED OFFICE AT: # 49-A, II PHASE, OPP. ARAVIND MOTORS PEENYA INDUSTRIAL AREA BENGALURU – 560 058 REPRESENTED BY ITS DIRECTOR AND AUTHORISED SIGNATORY SAKET KUMAR BHARPILANIA. 9 . SRI B.S. RAMEGOWDA S/O SONNEGOWDA, AGED ABOUT55YEARS, R/A #9, 5TH A CROSS, HANUMANTHEGOWDA ROAD, SAPTHAGIRI LAYOUT, NEAR SAPTAGIRI ENGINEERING COLLEGE, CHIKKASANDRA, BENGALURU – 560 057. 10 . SRI K.N. VISWANADHAN NAIR S/O SRI K.K. NARAYANA NAIR, AGED ABOUT77YEARS, R/A #26/1, VENKATESHWARA NILAYA5H CROSS, VIDYARANAYAPURA MAIN ROAD, DODDABHOMMASANDRA, BENGALURU – 560 097. 11 . SRI C. VEERA REDDY S/O SRI KRISHNA REDDY, AGED ABOUT38YEARS, R/A #1001/C, 1ST MAIN ROAD, NEAR SBI BANK, NAGASANDRA POST, BENGALURU – 560 073. 12 . SRI SUNIL GANESH S/O M GANESH, AGED ABOUT53YEARS, R/A #7-35/23, UJJODI, NEAR SHARADA SERVICE STATION, KANKANADI, MANGALURU – 574 199 REPRESENTED BY ITS GPA HOLDER SRI GURUPRASAD S.P. S/O SUDHAKARA PUTTUR13. SRI CHANDRASHEKHAR J S/O SRI K JAYAPAL, - 4 - AGED ABOUT41YEARS, R/A FLAT No.TF2, 3RD FLOOR, #45, VENSAPALA ENCLAVE SHREE RAMANJANEYA NAGAR, CHIKKALSANDRA BENGALURU – 560 061. 14 . M/S ELECTREX (INDIA) LIMITED No.21-D1, PEENYA INDUSTRIAL AREA, 2ND PHASE, BENGALURU – 560 058. REPT. BY ITS MANAGING DIRECTOR, MR. MUKESH CHOKSI. (V/O. DATED0603/2024 R-14 DELETED) . . . RESPONDENTS (SRI UDAYA HOLLA, SENIOR ADVOCATE FOR SRI RAKESH B. BHATT, ADVOCATE FOR RESPONDENTS1TO13 THIS WRIT APPEAL IS FILED UNDER SECTION4OF THE KARNATAKA HIGH COURT ACT, PRAYING TO ALLOW THE WRIT APPEAL AND SET ASIDE THE IMPUGNED JUDGMENT

DATED0602.2024 PASSED IN WP No.26720/2023 PASSED BY THE LEARNED SINGLE JUDGE IN THE INTEREST OF JUSTICE AND EQUITY. IN W.A. No.230 OF2024BETWEEN :

1. . M/S. INTERNATIONAL ASSET RECONSTRUCTION COMPANY LIMITED HAVING ITS BRANCH OFFICE AT: # A-601/602/605, 6TH FLOOR215ATRIUM, KANAKIA SPACES ANDHERI KURLA ROAD ANDHERI (EAST), MUMBAI – 400 093 REPT. BY ITS SENIOR VICE PRESIDENT MR SIDHHARTH SHAH. ...APPELLANT (BY SRI P.S. RAJAGOPAL, SENIOR ADVOCATE FOR SMT. SREEDEVI K.B. & SRI PATIL J.M., ADVOCATES) AND :

1. . M/S. MARUTHI TECHNOLOGIES A PARTNERSHIP FIRM - 5 - UNDER THE INDIAN PARTNERSHIP ACT HAVING ITS OFFICE AT: #292, 5TH MAIN, 3RD CROSS RAJAGOPALANAGARA PEENYA II STAGE, BENGALURU-560058 REP. BY ITS PARTNER SRI MALLAPPA @ MALLAPPA DEVAL S/O MR. DYAMANNA DEVAL AGED ABOUT42YEARS. 2 . SRI ABHILASH C.J.

S/O SRI JAGANNATH C.Y. AGED ABOUT36YEARS R/A #6, CHIKKABILATHI VADDARAHALLI POST SHRAVANABELAGOLA HOBLI CHANNARAYAPATTANA TALUK HASSAN – 573 116. 3 . M/S SREEPAL GREEN FUTURES PVT. LTD. A COMPANY INCORPORARTED UNDER THE COMPANIES ACT, HAVING ITS OFFICE AT; H.O. UNIT NO.1102 ORIANA BUSINESS PARK OPP. C.G.S.T. BHAVAN ROAD NO.22, MIDC, WAGLE ESTATE THANE WEST – 400 604 REP. BY ITS DIRECTOR SRI JAYANT MUJUMDAR. 4 . M/S SUMEDHA LASER TECHNOLOGIES PVT LTD A COMPANY INCORPORATED UNDER THE COMPANY ACT HAVING ITS OFFICE AT; I PARK, FLAT NO.3B/415/8, 1ST FLOOR, KIADB MAIN ROAD, I STAGE, II PHASE, PEENYA INDUSTRIAL AREA BENGALURU – 560 058 REP. BY ITS MANAGING DIRECTOR SRI K. ASHOK KUMAR. 5 . M/S JAY MINING AND WATERWELL SOLUTIONS A PARTNERSHIP FIRM UNDER THE INDIAN PARTNERSHIP ACT HAVING ITS OFFICE AT - 6 - #79, 5TH MAIN, MALAGALA, NAGARABHAVI II STAGE BENGALURU – 560 072 REP. BY ITS MANAGING PARTNER SRI J.

CHANDRASHEKHAR S/O SRI K. JAYAPAL. 6 . M/S SHANTHA N D/O SRI NARAYANA D AGED ABOUT55YEARS R/A #37, 4TH ‘A’ MAIN, 5TH CROSS TEACHERS COLONY SHANKARNAGAR VTC BENGALURU NORTH NANDINI LAYOUT BENGALURU – 560 096. 7 . M/S. PUSHPA N D/O SRI NARAYANA D AGED ABOUT55YEARS R/A # 37, 4TH ‘A’ MAIN5H CROSS, TEACHERS COLONY SHANKARNAGAR, VTC BENGALURU NORTH NANDINI LAYOUT BENGALURU – 560 096. 8 . SRI VIJAY KUMAR MOHANANI S/O LATE DAYAL DAS MOHANANI AGED ABOUT50YEARS R/A #D-1302, MANTRI GREENS NO.1, SAMPIGE ROAD MALLESHWARAM BENGALURU – 560 003. 9 . SRI D.R. SRINIVASA S/O LATE RAMACHANDRAIAH AGED ABOUT68YEARS10. SMT. VASUNDHARA W/O SRI D.R. SRINIVASA AGED ABOUT63YEARS11. SRI MURALI S S/O SRI D.R. SRINIVASA AGED ABOUT36YEARS - 7 - RESPONDENT Nos.9 TO11ARE R/A442 15TH MAIN3D STAGE, I BLOCK BASAVESHWARANAGAR BENGALURU – 560 079. 12 . SRI SYED SHAHUL HAMEED S/O SRI SYED SARDAR AGED ABOUT38YEARS R/A #18/24, 9TH ‘B’ MAIN BTM I STAGE, BENGALURU SOUTH BENGALURU DHARMARAM COLLEGE BENGALURU – 560 029. 13 . MS. DIVYA PRIYA S.V. D/O SRI R. SHANKAR VEERAPPA AGED ABOUT27YEARS R/A. #1619, LAKSHMI NILAYA ABBIGERE MAIN ROAD K.G. HALLI, BENGALURU – 560 015. 14 . M/S ELECTREX (INDIA) LIMITED NO.21-D1, PEENYA INDUSTRIAL AREA2D PHASE, BENGALURU – 560 058 REPT. BY ITS MANAGING DIRECTOR MR MUKESH CHOKSI. (V/O. DATED0603/2024 R-14 DELETED) … RESPONDENTS (SRI K.N. PHANINDRA, SENIOR ADVOCATE FOR SRI SRIKANTH PATIL K., ADVOCATE FOR RESPONDENTS1TO13 THIS WRIT APPEAL IS FILED UNDER SECTION4OF THE KARNATAKA HIGH COURT ACT, PRAYING TO ALLOW THE WRIT APPEAL AND SET ASIDE THE IMPUGNED JUDGEMENT DATED0602/2024 PASSED IN WP NO.26996/2023 PASSED BY THE LEARNED SINGLE JUDGE & ETC. THESE APPEALS, HAVING HEARD AND RESERVED FOR JUDGMENT

, COMING ON FOR PRONOUNCEMENT OF JUDGMENT

, THIS DAY, CHIEF JUSTICE DELIVERED THE FOLLOWING: - 8 - JUDGMENT

These two appeals arise out of common judgment and order dated 06.02.2024 passed by learned Single Judge in Writ Petition No.26720 of 2023 and Writ Petition No.26996 of 2023. The first mentioned petition is referable to Writ Appeal No.231 of 2024, whereas, the Writ Appeal No.230 of 2024 arises out of Writ Petition No.26996 of 2023. 1.1 Since in both the petitions facts are common and learned Single Judge also dealt with both the petitions together, these two appeals are considered simultaneously to be disposed of by this judgment and order. 1.2 Heard learned Senior Advocate Mr. P.S. Rajagopal with learned Advocate Smt. K. B. Sreedevi and learned Advocate Mr.J.M. Patil for the appellant in both the appeals, learned Senior Advocate Mr.Udaya Holla assisted by learned Advocate Mr.Rakesh B. Bhatt for respondent Nos.1 to 13 in Writ Appeal No.231 of 2024 and learned Senior Advocate Mr.K.N.Phanindra assisted by learned advocate Mr.Srikanth Patil K for respondent Nos.1 to 13 in Writ Appeal No.230 of 2024. Respondent No.14 in both the appeals came to be deleted from the array of respondents, as per the order of the Court.-. 9 - 2. The appeals are preferred by the appellant–M/s. International Asset Reconstruction Company Ltd.–original respondent No.1 under Section 4 of the Karnataka High Court Act, 1961, seeking to call in question the common judgment and order of learned Single Judge. The writ petitions which were filed by respondent Nos.1 to 13 herein, came to be allowed in terms of the directions issued by learned Single Judge. 2.1 The following operative directions were passed, “(i) Writ Petitions are allowed in part. (ii) The orders dated 26-03-2022, 06-07-2023 and 21.07.2023 passed by the XXXI Additional Chief Metropolitan Magistrate, Bengaluru in Criminal Miscellaneous No.5700 of 2021 are set aside, insofar as they concern granting of possession of one hectare and 2012 sq.mts. in Sy.No.34 of plot No.21-D, Peenya Industrial Area, Nallakadaranahalli, Yeshwantapur Hobli, Bangalore North Taluk and is restricted to 2012 sq.mts. in terms of the Assignment Deed 04-02-2008. (iii) The 1st respondent/Company is at liberty to act in accordance with law, to take possession of one hectare as well, bearing in mind the observations made in the course of the order. (iv) All other contentions of both parties remain open.

2.2 The orders dated 26.03.2022, 06.07.2023 and 21.07.2023 under challenge in the writ petitions were the orders passed by - 10 - learned 31st Additional Chief Metropolitan Magistrate, Bengaluru, in Criminal Misc. Application No.5700 of 2021, in exercise of powers under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘SARFAESI Act’). 2.3 The impugned orders were set aside in so far as they related to handing over possession of the land admeasuring 1 hectare and 2012 sq.mts., in Plot No.21-D, Survey No.34, Peenya Industrial Area, Nallakadaranahalli, Yeshwanthapur Hobli, Bengaluru North Taluk, and the taking over possession was restricted to 2012 sq.mts., out of the said total land, in terms of the Assignment Deed dated 04.02.2008. Liberty was reserved for the appellant– respondent No.1 to act in accordance with law to take possession of the rest of 1 hectare in light of the observations made in the order.

3. The petitioners were neither the borrowers nor the guarantors. While challenging the aforementioned orders passed by learned Additional Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act, it was the case of the original petitioners inter alia that they were the absolute owners and in possession of immovable plots forming part of the Eastern plot bearing No.21-D - 11 - in the Peenya II Phase Industrial Area in Survey No.34, Bengaluru North Taluk. The petitioners stated that different petitioners owned different plots carved out from the main plot which was purchased by them from respondent – M/s. Electrex (India) Ltd. and from one M/s. Bindu Properties for valuable consideration. 3.1 It was stated that several of the petitioners had obtained loan from Bruhat Bengaluru Mahanagara Palike and had also constructed industrial units. The property originally belonged to Karnataka Industrial Area Development Board (KIADB). Subsequently, respondent No.2 had in its favour the Sale Deed in respect of the said property from KIADB. The said M/s.Electrex (India) Ltd., took financial assistance from the original lender–M/s. IFCI Ltd., in the nature of equipment credit for the purchase of machines for its existing factory at the industrial area to the tune of Rs.200 lakhs, for which Equipment Credit Agreement dated 25.03.1994 came to be executed between the parties. Additional financial assistance was subsequently sanctioned by the lender. In respect of the loan obtained by the said M/s. Electrex (India) Ltd., Memorandum of Entry mortgaging the property dated 20.11.1996 was executed.-. 12 - 3.2 Respondent No.2 defaulted in making the payment of loan. M/s. IFCI Ltd., started recovery proceedings by filing Original Application No.61 of 2000 before the Debts Recovery Tribunal, Bengaluru. The application was allowed by the Tribunal by order dated 05.12.2006. Subsequently, a Recovery Certificate in the said proceedings was issued on 05.12.2006 for a sum of Rs.45,63,67,694/-. In the application filed before the Debts Recovery Tribunal as well as the Recovery Certificate, what was mentioned in Plot No.21-D in Survey No.34 to the extent of 2012 sq.mts. 3.3 M/s. IFCI Ltd., as a original lender, who had obtained the Recovery Certificate from the Debts Recovery Tribunal, transferred and assigned the credit facility, the right to recover the dues in respect of the financial assistance extended by it, in favour of M/s.International Asset Reconstruction Company Ltd.–the appellant herein by executing Assignment Deed dated 04.02.2008. The appellant-assignee stepped into the shoe of the original lender acquiring right to recover the debt for and on behalf of original lender. 3.4 It is on the basis of the above Assignment Deed dated 04.02.2008 that the appellant claims to have acquired the rights of - 13 - the original lender. The petitioners stated that Schedule-B of the said Assignment Deed mentioned that what was assigned was the immovable property admeasuring 2012 sq.mts., bearing Plot No.21-D in Survey No.34. 3.5 Deriving the entitlement to take legal action from the said Deed of Assignment, the appellant herein invoked the provisions of SARFAESI Act to issue notice under Section 13(2) of the Act dated 22.02.2013. It was the case of the petitioners inter alia that the said demand notice did not refer about acquisition of rights or interest in the financial assets by the appellant as per the Deed of Assignment dated 04.02.2008. It is the contention of the petitioners that said demand notice under Section 13(2) itself was invalid in the eye of law inasmuch as it not only did not disclose about Deed of Assignment, but wrongly mentioned the description and measurement of the property to show it to be of the area of 1 hectare and 2012 sq.mts., seeking to enforce the security interest in relation to the said entire area. It appears that, subsequently the appellant issued Possession Notice under Section 13(4) of the SARFAESI Act in respect of said Survey No.34 claiming possession of entire area of 1 hectare and 2012 sq.mts.-. 14 - 3.6 The original respondent No.2–M/s. Electrex (India) Ltd., passed the resolution dated 28.08.2017 to authorise the sale of Western portion of the property and then a registered Agreement of Sale dated 19.06.2018 came to be executed by respondent No.2 in favour of one M/s. Bindu Properties. Respondent No.2 thereafter bifurcated 1 hectare of land into different plots and sold out the plots of different measurements to different persons. The petitioners claim that they are the bonafide purchasers for valuable consideration and having purchased the same from M/s. Bindu Properties, put up industrial units and established industries. It was stated that for all these long years, nobody came to the spot and never issued notice to assert their claim in respect of the land area. 3.7 It was only in the year 2021 that an application under Section 14 of the SARFAESI Act came to be filed by respondent No.1–Appellant Asset Reconstruction Company which culminated into the impugned orders, whereby, the Additional Chief Metropolitan Magistrate directed handing over possession of the property measuring 1 hectare and 2012 sq.mts. In the backdrop were the order passed by the Debt Recovery Tribunal and the - 15 - Recovery Certificate issued in the proceedings by M/s. IFCI-the lender, to recover the debt. 3.8 The total case of the petitioners was and has been that respondent No.2–M/s. Electrex (India) Ltd., availed the credit facilities from original lender–M/s. IFCI Ltd., by executing the Memorandum of Entry on 20.11.1996 and thereby offering in mortgage of the schedule property bearing Plot No.21-D in Survey No.34, mentioned to the extent of 2012 sq.mts., only and that too the liability of respondent No.2 would be only to the said extent of 2012 sq.mts., out of the total area of the said land admeasuring 1 hectare and 2012 sq.mts. 3.9 The crux question that arises for consideration is whether the Additional Chief Metropolitan Magistrate exercising powers under Section 14 of the SARFAESI Act, could have passed orders requiring to hand over the possession of the total area of 1 hectare and 2012 sq.mts. of the land.

4. Learned Single Judge considered the controversy to come to the conclusion that only 2012 sq.mts. of land was mortgaged and that the land to the said extent was the security corresponded with the debt assignment. It was thus held that the Additional Chief - 16 - Executive Magistrate was not justified in directing to handover the possession of total land of 1 hectare and 2012 sq.mts. Learned Single Judge, therefore, set aside the orders passed by the Executive Magistrate and restricted the operation of the orders for taking possession of the land to the extent of area 2012 sq.mts. 4.1 Learned Single Judge has made the following observations after considering the statutory provisions, “Therefore, enforcement of security interest as obtaining under Section 13 of the Act can be at the hands of an assignee. In the case at hand the Bank, the assignor and the Company, the assignee and the agreement between the two for transfer of rights is the Assignment Deed. The Assignment Deed by the assignor to the assignee nowhere mentions one hectare and 2012 sq.mts. It only mentions 2012 sq.mts. It is this act of the respondent/Company that merited entertainment of the petitions as it was calling in question an order of the learned Magistrate which directs taking possession of one hectare and 2012 sq.mts. In the normal circumstances the petition of the kind would not be entertainable. …

5. At this stage, certain provisions of the SARFAESI Act would be relevant to be referred to. “Asset reconstruction company” is defined in Section 2(ba) of the Act. The appellant is an asset reconstruction company within the meaning of the said section. It is also a secured creditor by virtue of Section 2(zd)(iii). “Financial asset” means debt or receivables contemplated in Section 2(l)(i) to - 17 - (v) which includes a mortgage, charge, hypothecation or pledge. The word "secured debt” defined in Section 2(ze) to mean a debt which is secured by any security interest. 5.1 Section 2(zf) is the definition of “security interest”. It means right, title or interest of any kind, other than those specified in Section 31, upon property created in favour of any secured creditor. It inter alia includes any mortgage, charge, hypothecation, assignment of any right, title or interest of any kind, of tangible asset, retained by the secured creditor as an owner of the property. 5.2 Section 5 of the Act contemplates “Acquisition of rights or interest in financial assets”. It says that any asset reconstruction company may acquire financial assets of any bank or financial institution inter alia by entering into agreement with such bank or financial institution on such terms and conditions as may be agreed upon between them. Section 13 in Chapter III of the Act deals with “Enforcement of security interest”. 5.3 The application filed by the appellant Company under Section 14 of the SARFAESI Act was pursuant to and in light of the Recovery Certificate issued by the Debt Recovery Tribunal in the - 18 - proceedings of Original Application. It was inter alia stated in paragraph 10 of the application that the Debts Recovery Tribunal by order dated 05.12.2006 allowed the Original Application directing the respondent as well as its directors as well as guarantors to pay the claim amount. It was stated that, respondent was liable to pay a sum of Rs.51,07,51,835/- which was the amount to be secured under the decree of the Tribunal and covered under the Recovery Certificate issued. 5.4 It was clearly stated in paragraph 18 of the application that “the respondent had availed the credit facility by mortgaging the schedule property” and post availing, it committed default and the land issued is classified as non-performing asset. The schedule property as described in Schedule-B was to the extent of 2012 sq.mts. in plot No.21-D in Survey No.34. Therefore, the application itself under Section 14 was clear and was to be confined to the property admeasuring 2012 sq.mts. 5.5 With the background as above, the following factual aspects emerge, (i) The document in the nature of Memorandum of Entry dated 20.11.1996 which figures on record contains the description of the entire immovable property which was subject matter of mortgage.-. 19 - The contents of the above document clearly show that the property to the extent mentioned in the second schedule was mortgaged. The second schedule was as under, “SECOND SCHEDULE (Description of entire immovable properties) All that piece and parcel of industrial land with buildings, structures, fittings and fixtures thereon bearing Plot No.21-D1, in Sy.No.34, Industrial Area, Nallakadirenahally, Yeshwantpur Hobli, Bangalore North Taluk, Bangalore District totally measuring an extent of 2012 sq.mtrs. and bounded on the : East by - KIADB Road West by - Private land North by - Plot No.20 (20 vide proposed village and road) South by - Plot No.21-D2’’ (ii) It was only the 2012 sq.mts. of land which was mortgaged was put forward before the Debts Recovery Tribunal in the original application filed by respondent No.2. (iii) The Recovery Certificate dated 05.12.2006 was issued by the Tribunal. It mentioned the mortgage of immovable property in Schedule Property as under, “All that piece and parcel of industrial land with buildings, structures, fittings and fixtures thereon bearing Plot No.21-D1, in Survey No.34, industrial Area, Nallakadirenahally, Yeshwantpur Hobli, Bangalore North Taluk, Bangalore District, totally - 20 - measuring an extent of 2012 sq.mts. and bounded on:” (iv) The original lender and IFCI who was in possession of the said Recovery Certificate assigned the credit facility to the appellant–Asset Reconstruction Company. The assignment could not have been beyond 2012 sq.mts. which was covered in the Recovery Certificate. (v) In the Assignment Deed dated 04.02.2008, the description of the immovable properties charged in favour of the assignor was mentioned in Schedule-B as under, “(1) All that piece & parcel of industrial land with buildings, structures, fittings and fixtures on Plot No.21-D1, Sy.No.34, Industrial Area, Nallakadirehahally, Yeshwantpur Hobli, Bangalore North Taluk, Bangalore District totally measuring an extent of 2012 sq.mtrs. and bounded on East by: KIADB Road, West by: Private land, North by: Plot No.20, South by:

21. D2. (2) Exclusive charge in favour of the assignor on 10 Nos. of various machineries mentioned in schedule enclosed to the Deed of H.P Dated 26-03-1994, together with equipment installed/to be installed at factory premises of the company at Peenya, Bangalore under Equipment credit scheme. (3) Hypothecation of other machinery on pari-pari first charge basis.” - 21 - 5.6 From the above factual aspects emerging from record and emanating from the relevant documents, it is manifest and clear that the property charged in favour of the assignor who was assigned the debt was to the extent of 2012 sq.mts only. In the process of recovery of debt, assignor who had entered into the shoe of original debtor, was entitled to take the land to the extent of 2012 sq.mts. only as security. The enforcement of the security interest by the assignor was limited to that extent as the property to that extent only was mortgaged with the original lender. 5.7 When it clearly emerged from the record that the assignment was in terms of the Assignment Deed dated 04.02.2008 which was only in respect of 2012 sq.mts. of land, the contention that the other banks had authorised assignee to take over the total area of 1 hectare also is of no consequence and does not carry the case of the respondent any further. The birth of the assignee company was in terms of the Assignment Deed from the original lender. The rights which could be enforced by the assignee was circumscribed by the Assignment Deed and the details as well as the terms of the security interest created and mentioned therein. 5.8 It appears that either by inadvertence or for culpable reasons, when notice under Section 13(2) of the SARFAESI Act - 22 - came to be issued by the appellant in process of recovery of the debt, in the description of the immovable property, the entire land in survey No.34 admeasuring 1 hectare 2012 sq.mts. was mentioned. It was the clear mismatch with the actual extent of the land mortgaged as reflected in the Memorandum of 1996. It was therefore contended by the appellant that the very notice under Section 13(2) followed by notice under Section 13(4) of the SARFAESI Act for possession could be said to be without compliance of the mandatory requirements and was invalid in the eye of law. The submission could not be brushed aside lightly that notice issued under Section 13(2) of the SARFAESI Act stood invalid as it did not comply with the requirements of mentioning the specific details. The land area mentioned was to 1 hectare and 2012 sq.mts., while it was in actuality only 2012 sq.mts., which was the extent of land mortgaged in respect of the loan obtained. 5.9 The subject matter dispute having travelled thus far upto the stage of writ appeal, the contention sought to be raised that the writ petition was not entertainable as the statutory alternative remedy under Section 17 of the Act was available, would render academic. Even otherwise, it is not possible to set the clock back at this stage. The rights of the parties have been adjudicated.-. 23 - Further, it could be submitted that the notice under Section 13(2) of the Act did not contain the requisite details needed to be mandatorily mentioned therein and in that view, the issue could be examined in the writ petition. In any view, at this stage, the contention about the alternative remedy could not be entertained.

6. In view of aforesaid discussion and the reasons supplied, no error could be booked in the judgment and order of learned Single Judge. The same is upheld. 6.1 The assignor steps into the shoe of the original lender and the covenants between the borrower and original lender binds the assignor. The “Security interest” sought to be enforced by the assignee could not travel beyond what was assigned. The decision of the Debt Recovery Tribunal and Recovery Certificate was delimited to and was in the context of 2012 sq.mts. land only. 6.2 Section 5 of the SARFAESI Act deals with acquisition of rights or interest in a financial asset by any asset reconstruction company. The ambit of assignment cannot be beyond what the assignor could assign. When the Assignment Deed dated 04.02.2008 mentioned the debt to correspond the mortgage of 2012 sq.mts. of land only, the assignor could not have enforced its - 24 - rights and security interest in respect of the entire land. The Assignment Deed was the defining document. The assignment was done to aforementioned extent only.

7. Both the appeals stand meritless and are dismissed. In view of dismissal of the appeals, the interlocutory applications would not survive and they stand accordingly disposed of. Sd/- CHIEF JUSTICE Sd/- JUDGE AHB