The main legal point established in the judgment is the executionary nature of powers under Sec.14 of SARFAESI Act, the borrower's awareness of consequences upon failure to respond to notice under Sec.13(2), and the availability of appeal under Sec.17. The judgment emphasizes the need for strict compliance with the Act and Rules.

R. BANUMATHI,J

This Writ Petition is filed seeking Writ of Certiorari to quash the orders of Chief Metropolitan Magistrate, Egmore in Crl.O.P.No.2359 of 2010 dated 16.08.2010 appointing Advocate-Commissioner to take possession of the property of the Petitioner.

2. 2nd Respondent-Lakshmipathy and 3rd Respondent-Somasundari have availed home loan of Rs.10,21,000/- on 24.03.2004 from 1st Respondent Bank and executed various documents and also deposited title deeds of the mortgaged property. The borrowers failed to honour the commitment and so the loan account become Non Performing Asset. By exercising the power conferred on the 1st Respondent Bank under Sec.13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [SARFAESI Act], 1st Respondent Bank issued Demand notice to the borrowers [1st and 2nd Respondents] on 27.06.2009 to enable them to pay the balance amount of Rs.9,36,281.90 within 60 days from the date of notice and the said notice was duly served to the borrowers. Even after the expiry of 60 days, the borrowers have not come forward to repay the dues. Stating that they are not in a position to take physical possession of the secured asset, 1st Respondent Bank filed Petition under Sec.14 of SARFAESI Act before Chief Metropolitan Magistrate, Egmore to pass an order enabling the 1st Respondent Bank to take possession and management of the secured asset.

3. By the order dated 16.08.2010 in Crl.O.P.No.2359/2010, the Chief Metropolitan Magistrate, Egmore has passed the impugned order appointing the Advocate-Commissioner to take possession of the property. On 21.08.2010, the Advocate-Commissioner came to the spot along with other Officers of the 1st Respondent Bank to take possession of the property. Aggrieved by the same, Petitioner has filed this Writ Petition.

4. Case of Petitioner is that he is the present owner of the property bearing Flat No. I/31. 3rd Floor, I Block, NPL Agasthiya Apartments, Door No.605 & 606, Tondiarpet, Chennai-81 measuring 385.5 sq. ft. out of 35 grounds and 26 sq. ft. with a plinth area of 935 sq. ft. together with a garage/reserved parking space bearing No.15, measuring 234 sq. ft. in the ground floor comprised in R.S.No.3923 at Thiruvotriyur High Road, Fort-Tandiarpet Taluk. Further case of Petitioner is that his wife Sheela purchased the same from the 3rd Respondent [Lakshmipathy] by a sale deed dated 15.11.2005 registered as Document No.3313/2004 and 3rd Respondent had suppressed the creation of mortgage infavour of the Bank. On 03.06.2009, Sheela - wife of Petitioner executed a settlement deed infavour of the Petitioner settling the property in his favour.

5. Challenging the order of the Chief Metropolitan Magistrate, Egmore, Mr.Ramesh Kumar Chopra, learned counsel appearing for the Petitioner raised two contentions:-

1st Respondent Bank cannot bypass Sec. 13(4) of SARFAESI Act and invoke the provisions of Sec.14. He would submit that before invoking Sec. 14 notice under Sec.13(4) is necessary, otherwise the provisions of appeal under Sec.17 will become useless, particularly when the proceedings under Sec.14 cannot be questioned by filing appeal before the Tribunal or before a Court.

In the event the procedures contemplated under Rule 8 of the Security Interest (Enforcement) Rules, 2002 are not followed before Sec.14 is invoked, the order passed by the Chief Metropolitan Magistrate would be contrary to the said Rules and consequently, the order passed under Sec.14 is liable to be set aside.

6. Mr.S.Vasudevan, learned counsel appearing for the 1st Respondent Bank submitted that 1st Respondent Bank is entitled to take symbolic possession under Sec.13(4) of SARFAESI Act and in the event, the 1st Respondent Bank experienced any difficulty in taking possession, it may approach the Chief Metropolitan Magistrate concerned under Sec.14 of the Act. It was further submitted that the rights of the Bank to invoke Sec.14 of the Act is independent o