The assignment of debt under the SARFAESI Act and the interpretation of 'financial institution' and 'secured creditor' were central to the court's decision.

ORDER

1. Civil Application No. 2681 of 2017 has been filed in Writ Petition No. 11371 of 2014 by the respondent no.1 in such writ petition, being the secured creditor, seeking diverse reliefs for obtaining possession of the secured asset (Flat No. 1702, 17th floor, "A" Wing of 'Sweet Home Cooperative Housing Society Ltd.').

2. While hearing this civil application, we have heard the writ petition on its own merits. By this common order, we propose to dispose of the civil application as well as the writ petition.

3. The question involved in the writ petition is short but interesting. However, before we formulate the same for an answer, it would be proper to notice the basic facts.

4. The petitioner no. 1 is a partnership firm whereas the other petitioners are the partners of such firm. The firm carries on business of renting cars. It obtained financial assistance from the respondent no.2, which is a non-banking financial company, upon creation of mortgage in respect of the aforesaid flat. Admittedly, the petitioners defaulted in repaying the dues of the respondent no.2. However, the respondent no.2 did not pursue legal action for recovery of its dues; instead, on July 18, 2012, it assigned the debt to the respondent no.1, a "bank" within the meaning of section 2(c) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter 'the SARFAESI Act' for short). The respondent no.1, after such assignment, issued a notice dated April 22, 2014 under section 13(2) of the SARFAESI Act demanding from the petitioners an amount of Rs.5,66,20,900/- as on April 22, 2014 along with future interest as per details specified therein. The petitioners responded to the said demand notice. While raising various points, it was inter alia asserted that the original lender, i.e. the respondent no.2, was not a "financial institution" within the meaning of section 2(m) of the SARFAESI Act and, therefore, not a "secured creditor" within the meaning of section 2(zd) thereof; hence, it was the petitioners' contention that since the respondent no.1 had stepped into the shoes of the respondent no. 2, the respondent no. 1 had no authority to proceed under section 13 of the SARFAESI Act. The objection did not evoke any favourable response from the side of the respondent no. 1; on the contrary, it proceeded to file an application before the Chief Metropolitan Magistrate, Esplanade, Mumbai (hereafter 'the magistrate", for short), under section 14 of the SARFAESI Act, whereupon an order was passed by the magistrate on October 1, 2014. The respondent no. 1 was permitted to take possession of the secured asset with the assistance of a public official. An Assistant Registrar of the Court was directed to take and hand over possession in terms of the directions contained therein. The petitioners, thereafter, presented this writ petition on December 15, 2014 impugning the demand notice dated April 22, 2014 and the order dated October 1, 2014 referred to above and prayed for inter alia the following relief:\\

a. that this Hon'ble Court be pleased to issue direction calling the papers and proceeding of the case No.363/SA/2014 filed by Respondent No.1 before Ld. Chief Metropolitan Magistrate, Esplanade, Mumbai and after examining the legality and propriety thereof, be pleased to quash and set aside the impugned notice dated 22nd April, 2014 and Order dated 29th September, 2014 (sic, 1st October 2014) passed by the Ld. Chief Metropolitan Magistrate, Esplanade, Mumbai under the provisions of Section 14 of the SARFAESI Act;

b. that this Hon'ble Court be pleased to issue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ Order or direction directing the Respondent No.3 to take appropriate action against Respondent No.1 including declaring that the Respondent no.1 being the assignee of the Respondent No.2 is not a secured creditor within a definition of the SARFAESI Act."

Upon the writ petition be