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VIJAY BISHNOI
Surendra Kanwar Shekhawat – Appellant
Versus
Authorized Officer, Punjab National Bank – Respondent
JUDGMENT
1. These writ petitions have been filed by the petitioners being aggrieved with the impugned notices dated 16.5.2022 issued by the respondent-bank demanding peaceful possession of secured assets of the petitioners, which were mortgaged with the respondent-bank against a loan advanced to M/s Super Shiv Shakti Chemicals Private Limited, Bhilwara (for short 'the principal borrower').
2. Brief facts of the case are that the principal borrower obtained loan from the respondent-bank and in respect of the same, the petitioners stood as guarantors for repayment of the loan and created security interest of their residential houses in favour of the respondent-bank. When the principal borrower failed to repay the loan amount as per the terms and conditions of the loan agreement, the respondent-bank declared the debt as a NonPerforming Asset (for short 'NPA') on 30.3.2017 and recalled the advance granted to the principal borrower and notices under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act') were issued to the petitioners on 5.2.2019. When the petitioners have failed to pay the due
The court established that recovery proceedings under the SARFAESI Act can be initiated against personal guarantors even when insolvency proceedings are ongoing against the principal borrower.
Legal heirs of a deceased guarantor cannot contest proceedings under SARFAESI Act after notice served during the guarantor's lifetime, as they must seek remedy via Debts Recovery Tribunal.
The court clarified that the moratorium under the IBC does not protect personal guarantors, allowing banks to proceed with recovery under the SARFAESI Act.
The SARFAESI Act mandates exhausting statutory remedies before seeking extraordinary relief under Article 226; procedural compliance is essential, and the auction process cannot be set aside absent s....
The proceedings initiated against the original borrower for enforcement of security interest stand concluded by virtue of intimation served upon them, and the death of the original borrower occurring....
Civil Courts have jurisdiction in SARFAESI Act matters only when the secured creditor has not initiated actions under the Act. Limitation laws apply strictly to such actions.
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