IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, J.
Shriram Housing Finance Limited - Appellant
Versus
District Magistrate, Bhavnagar - Respondent
R/Special Civil Application No. 18125 of 2021
Decided on : 12-01-2022
Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2) and 14 - Constitution of India - Article 226 - Possession of Mortgaged Property - Petitioner preferred an application along with affidavit of authorized person of petitioner before Respondent No. 1-District Magistrate, Bhavnagar, under Section 14 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 being SARFAESI Case against Respondent Nos. 2 to 4 for getting assistance for taking possession of mortgaged property to recover outstanding dues of petitioner amounting as per notice issued under Section 13(2) of SARFAESI Act – Held, District Magistrate or Metropolitan Magistrate as case may be is required to provide assistance to secured creditor to take possession of secured assets on an application to be filed by secured creditor as per provisions of Section 14 of SARFAESI Act - Section 14 of SARFAESI Act provides that on receipt of an application along with an affidavit District Magistrate or Chief Metropolitan Magistrate as case may be after being satisfied with contents thereof SHALL pass a suitable order to take possession of the mortgaged property within the period of 30 days from date of such application - Petition is allowed.
JUDGMENT :
Bhargav D. Karia, J.
1. Heard learned Advocate Ms. Khyati A. Chug for the petitioner and learned AGP Mr. Dhawan Jayswal for Respondent No. 1. Though served, none appears for Respondent Nos. 2 to 4.
2. Rule. Learned AGP waives service of notice of rule for Respondent No. 1.
3. This is a petition under Article 226 of the Constitution of India seeking following reliefs:
A. The Hon'ble Court may be pleased to issue a writ of certiorari or any other appropriate writ, direction or command in the nature of writ of certiorari, quashing and setting aside the order dated 06.08.2021 passed by the Respondent No. 1-the District Magistrate, Bhavnagar in SARFAESI Case No. 12/2021;
B. Pending admission and final hearing of the present petition, the Hon'ble Court be pleased to stay the implementation and execution of the order dated 06.08.2021, passed by Respondent No. 1-the District Magistrate, Bhavnagar in SARFAESI Case No. 12/2021;
C. Ex-parte ad interim relief in terms of Paragraph (B) above be granted;
D...."
4. The petitioner preferred an application along with affidavit of the authorized person of the petitioner before Respondent No. 1-District Magistrate, Bhavnagar, under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in brief 'SARFAESI Act') being SARFAESI Case No. 12 of 2021 on 9th March, 2021 against Respondent Nos. 2 to 4 for getting assistance for taking possession of the mortgaged property to recover the outstanding dues of the petitioner amounting to Rs. 11,07,029/- as per the notice dated 20th February, 2020 issued under Section 13(2) of the SARFAESI Act.
5. However, Respondent No. 1 rejected the application filed by the petitioner on the ground that Respondent Nos. 2 to 4 have paid the installment after the notices were issued by the petitioner under Sections 13(2) and 13(4) of the SARFAESI Act and also directed the petitioner to permit Respondent Nos. 2 to 4 to regularize their account and Respondent Nos. 2 to 4 were directed to pay regular installments to the petitioner.
6. Learned Advocate Ms. Chug appearing for the petitioner submitted that Respondent No. 1 has passed the impugned order contrary to the provisions of Section 14 of the SARFAESI Act, as Section 14 of the SARFAESI Act only permits Respondent No. 1 to provide assistance to the secured creditor to take the possession of the mortgaged property of the borrower who failed to pay the money to the secured creditor.
7. It was submitted that Respondent No. 1 could not have passed the impugned order rejecting application under Section 14 of the SARFAESI Act by directing the petitioner to consider the installment paid by Respondent Nos. 2 to 4 for repayment of the outstanding dues of the petitioner.
8. It was submitted that Respondent No. 1 has traveled beyond the scope and ambit of Section 14 of the SARFAESI Act by passing the impugned order which contrary to the said provisions of law.
9. It was further submitted that Section 14 of the SARFAESI Act stipulates for taking possession of the property by the secured creditor of the assets and Respondent No. 1 has no power to direct the petitioner to regularize the loan account of the defaulter.
10. It was also submitted that for the defaulters-borrowers ought to have approached the-Debts Recovery Tribunal under Section 17 of the SARFAESI Act if aggrieved by the action taken by the secured creditor under Section 13 of the SARFAESI Act.
11. On the other hand learned AGP Mr. Jayswal tried to defend the action of Respondent No. 1 but without any force.
12. Having heard the learned Advocates for the parties it appears that Respondent No. 1 has traveled beyond the scope and ambit of Section 14 of the SARFAESI Act.
13. Section 14 of the SARFAESI Act reads as under:
(1) Where the possession of any secured assets is required to be taken by
The court mandated that the District Magistrate must pass orders under Section 14 of the SARFAESI Act within 30 days, emphasizing the importance of adhering to statutory timelines.
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