Point in Issue :
Whether respondent authority is statutorily duty bound to asset in taking over possession of security assets.

J.B. Pardiwala, J.—This petition has been preferred by IDBI Bank Limited, a company incorporated under the provisions of the Companies Act, 1956, through its authorized signatory with the following prayers :—

“(A) Your Lordships be pleased to issue a writ or any other appropriate writ, order or direction, by quashing and setting aside order/communication dated 09/06/2009 of the respondent authority and further be pleased to direct the respondent authority to pass an order for providing assistance to maintain law and order while taking over the possession of the secured assets of the principal borrower for implementation of Section 14(1) and the said secured asset is to be forwarded to the petitioner in accordance with law in the interest of justice and equity forthwith;

(B) Your Lordships be pleased to direct the respondent authority to forthwith re-consider the application of the petitioner bank submitted under Section 14 of the Securitization considering the ratio laid down in various decisions of this Hon’ble Court as well as considering the provisions of Section 14 of the Act and pass the appropriate order within such time as may be deemed fit by this Hon’ble Court in the interest of justice and equity.”

2. The factual background under which this petition has been preferred is that Respondent No. 2 availed of a housing loan of Rs. 2 lakhs from the petitioner Bank and executed necessary documents in favour of the petitioner Bank. It is not in dispute that the loan was sanctioned in favour of Respondent No. 2, who is the principal borrower. At the time of availing the loan amount Respondent No. 2, as the principal borrower, mortgaged his immovable residential property towards the security with the petitioner Bank by executing necessary documents. The description of the mortgaged immovable residential property is as under :—

“A residential property situated on Revenue Survey No. 288/p, Mouje : Gam Chhapra, District – Sub District: Navsari, Plot area 116.26 sq.meters (660 sq.ft.), constructed area 540 sq.ft., House No. 36/H, Panchvati Society, Chhapra Road, Chhapra, Navsari”

Thus, Respondent No. 2 is a borrower under Section 2(f) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the Securitisation Act’) and the petitioner Bank is a secured creditor under Section 2(zd) of the Securitisation Act. It is also not in dispute that Respondent No. 2 failed in making payment of installments and as on 10th December 2006 the total outstanding dues payable by him to the Bank was Rs. 1,55,595=00.

3. The petitioner Bank required police assistance for taking over the physical possession of the property in question. The Bank, therefore, applied to the District Magistrate, Navsari, by filing application dated 26th February, 2009. The grievance made by the Bank is to the effect that an application which was preferred with the District Magistrate, Navsari under Section 14 of the Securitisation Act, praying that necessary protection be afforded to the Bank for taking over possession of the property in question, which has been mortgaged, has been wrongly rejected. The application preferred by the Bank is at Annexure-’F’. Collector, Navsari i.e. Respondent No. 1 informed the Bank that the request which has been made cannot be acceded under Section 14 of the Securitisation Act for the reason that the defaulter i.e. principal borrower – Respondent No. 2 has made construction of 540 sq.feet in a plot area of 660 sq.feet in the land bearing Revenue Survey No. 288/p situated at Mouje Chhapra, which is not in accordance with law. Respondent No. 1 further informed the Bank that it would not be proper to get the possession of the property having unauthorized construction to submit to the Bank.

4. The principal contention on behalf of the petitioner Bank is that Respondent No. 1 as a District Magistrate has no power under Section 14 of the Securitisation Act to adjudicate any issue on