The powers under Section 14 of the SARFAESI Act are ministerial; prior notice to the borrower is not required. Remedies are limited to the Debt Recovery Tribunal following action under the Act.

JUDGMENT :

Rakesh Kainthla, J.

The petitioner has filed the present petition for quashing the order dated 25.04.2024 passed by learned Additional Chief Judicial Magistrate (ACJM), Court No.2, Shimla, H.P., vide which the application filed by the respondent under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) was allowed.

2. It has been asserted that the respondent/creditor filed an application seeking a direction to SHO to help the authorized ofÏcer to take possession of the secured asset. It was asserted that petitioners No.1 and 2 availed housing loan/non-housing loan credit facility of Rs.20,95,001/- against the security of the premises with an undertaking to repay the same as per the terms of the loan agreement. Petitioners created an equitable mortgage by deposit of the original title deed. The amount was declared a Non- Performing Asset (NPA) on 11.03.2021. The borrowers were liable to pay Rs.20,75,486/- to the respondent. The respondent issued a demand notice on 17.05.2021 under Section 13 (3-A) of the SARFAESI Act and asked the petitioners to clear the dues within 60 days. The petitioners failed to clear the dues within 60 days or to file any objection. The respondent wanted to take possession of the secured asset; hence, the application was filed to seek assistance from the Court. The Court allowed the application and issued a warrant of possession to the Collector for delivery of the possession. The order is bad. The order was passed in violation of the principles of natural justice as no notice was served upon the petitioners nor any opportunity of being heard was provided to them before passing the order. The petitioners were ready and willing to pay the entire amount if some time was granted to them. The petitioners were regularly paying the monthly instalment of Rs.19,728/-, however, the instalments were enhanced to Rs.22,737/-. Petitioners have paid almost half of the loan amount. The petitioners suffered huge losses due to Covid-19. Thereafter, no person approached the petitioners regarding the outstanding amount. The amount claimed by the respondent is quite high. Hence, it was prayed that the present petition be allowed and the order passed by the learned Trial Court be set aside.

3. The Court passed an order on 27.05.2024 that the petitioner ha d furnished an undertaking to remit the amount of Rs.23,52,117/- on or before 26.06.2024; hence further action in the matter be deferred.

4. The notice of the petition was issued to the respondent.

No reply has been filed.

5. I have heard Ms Madhurika Sekhon, learned counsel for the petitioners and Ms Ridhi Bansal, learned counsel for the respondent through video conferencing along with Mr Ajay Sharma, learned counsel for the respondent.

6. Ms. Madhurika Sekhon, learned counsel for the petitioners submitted that the learned ACJM erred in issuing the order without serving a notice upon the petitioners. This is a violation of the principles of natural justice. Learned ACJM did not have jurisdiction to pass the order, as the jurisdiction is vested with the District Magistrate or the CJM. The respondent has claimed an excessive amount; therefore, she prayed that the present petition be allowed and the order passed by the learned ACJM be set aside.

7. Ms. Ridhi Bansal, learned counsel for the respondent through th e video conferencing (not completely audible) submitted that the present proceedings do not lie before this Court as the remedy of the petitioners is to approach the Debt Recovery Tribunal ag