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2011 Supreme(SC) 148

D.K.JAIN, H.L.DATTU
Kanaiyalal Lalchand Sachdev – Appellant
Versus
State of Maharashtra – Respondent


Judgement Key Points

Key Points: - The Court held that ordinarily relief under Articles 226/227 is not available where an efficacious alternative remedy exists under Section 17 of the Act. (!) (!) - Actions taken under Section 14 constitute actions after Section 13(4) and are subject to appeal under Section 17 before the DRT; thus the remedy is efficacious and available. (!) - The Debts Recovery Tribunal has jurisdiction to consider whether measures under Section 13(4) are compliant with the Act and to restore possession or set aside actions if necessary. (!) (!) (!) - Rule 8 (and Rule 4) of the 2002 Rules govern possession of assets, with the noted relevance that Rule 4 may not apply to immovable assets in this case. (!)

What is the scope of relief under Articles 226/227 when an efficacious alternative remedy under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is available?

What is the relationship between actions taken under Section 13(4) and proceedings under Section 14 and the jurisdiction of the Debts Recovery Tribunal (DRT) on appeal?

What are the proper procedures and remedies for enforcement of security interest under the Act, including the roles of Rule 4, Rule 8, and the eligibility for challenging actions before the DRT?


JUDGMENT

D.K. Jain, J. —

Leave granted.

2. Challenge in these appeals, by special leave, is to the judgments and orders dated 28th April, 2009 and 1st July, 2009 delivered by the High Court of Bombay in W.P. No. 707 of 2009, and Criminal Application No. 178 of 2009 in W.P. No. 707 of 2009, respectively whereby it has dismissed the writ petition filed by the appellants herein, and also declined to extend the status-quo order granted by it to them.

3. Briefly stated, the facts, material for adjudication of the present appeals, may be stated thus:

Respondent No. 3, viz. the State Bank of India had advanced a loan of ‘4,50,00,000/- to appellant No. 6 on an equitable mortgage by deposit of the title deeds of certain properties, subject matter of these appeals, on 6th February, 2006. Appellant Nos.1 to 5 and one Mr. Lalchand Sachdeo stood as personal guarantors to the said loan.

4. On default of re-payment of loan amount, respondent No. 3 issued a notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002 on 18th November, 2006. On 12th February, 2007, the officers of respondent No. 3 dispossessed the appellants o













































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