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2015 Supreme(Mad) 1271
HIGH COURT OF JUDICATURE AT MADRAS
SATISH K. AGNIHOTRI & M. VENUGOPAL, JJ.
Shri Someshwara Spun Pvt. Ltd. – Appellant
Versus
The Authorised Officer, State Bank of India, Sterling Centre Branch, Worli, Mumbai- Respondent
W.P.No. 5451 of 2015
Decided On : 10-03-2015
For the Petitioner:AR.L. Sundaresan, Sr. Counsel for M/s. S. Ramesh, Advocates.
For the Respondent:N. Sivabalan for S. Sethuraman, Advocates.
The statutory mechanism for taking over possession under the SARFAESI Act must be adhered to by the financial institution, as emphasized by the court.
Headnote:
SARFAESI Act - Notice under Section 13(4) - The court relied on the Supreme Court's ratio in ICICI Bank Ltd. v. Prakash Kaur and Others, emphasizing the statutory mechanism for taking over possession under the SARFAESI Act. The respondent-Bank withdrew the objectionable portion in the impugned notice, and the court emphasized the obligation to adhere to the statutory mechanism.
Fact of the Case:
The petitioner challenged a notice under Section 13(4) of the SARFAESI Act, which directed the delivery of possession of secured assets. The respondent-Bank indicated its intention to initiate action under Section 14 of the SARFAESI Act to take possession peacefully.
Finding of the Court:
The court found that since the objectionable portion in the impugned notice was withdrawn by the respondent-Bank, no further adjudication was required. However, it emphasized the respondent-Bank's obligation to adhere to the statutory mechanism provided under the SARFAESI Act.
Issues: Challenge to notice under Section 13(4) of the SARFAESI Act, respondent-Bank's intention to take possession, and the petitioner's rush to the court.
Ratio Decidendi: The court relied on the statutory mechanism for taking over possession under the SARFAESI Act and emphasized the respondent-Bank's obligation to adhere to it.
Final Decision: The writ petition was disposed of, and connected miscellaneous petitions were closed. No costs were awarded.
Satish K. Agnihotri, J.
1. Aggrieved by the notice under Section 13(4) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SARFAESI Act"), dated 12.2.2015, the petitioner has come up with the instant writ petition questioning the penultimate paragraph of the notice whereunder, it was directed to deliver possession of the secured assets.
2. Relying on the ratio laid down by the Supreme Court in ICICI Bank Ltd., - Vs. - Prakash Kaur and Others (2007) 2 SCC 711, the learned senior counsel appearing for the petitioner submits that there is a complete mechanism for taking over possession under the provisions of SARFAESI Act. Under Section 13 (4) of the Act, a symbolic possession can be taken and thereafter, under Section 14 of the SARFAESI Act, the secured creditor i.e. financial institution can approach the competent authority as prescribed under Section 14 of the SARFAESI Act to take the assistance for securing the possession of the secured assets.
3. Pursuant to the notice, the Bank has filed an affidavit indicating in paragraphs 4 and 5, as under:-
“(4) I submit as no amount was forthcoming from the petitioner, the bank issued a letter dated 12.2.2015 calling upon the petitioner, to hand over the possession of the secured assets, failing which, the Bank would entrust the matter to private agency who would take possession with the help of police (in other words by filing petition under Sec.14 of the SARFAESI Act before Executive Magistrate and seek police help). The petitioner mistook the same as if the Bank is going to take forcible possession and issued lawyer notice to the Bank stating that they can take possession only under Sec.14 of the SARFAESI Act and not otherwise. Before the Bank could reply the said notice and clarify the position, the petitioner rushed to this Honourable Court challenging the letter dated 12.02.2015 on the ground that the bank has threatened to take possession forcibly.
(5) I submit that we are initiating action under Section 14 of the SARFAESI Act. As required by the petitioner and take possession by obtaining suitable orders from the executive Magistrate as the petitioner is not willing to hand over the possession in a peaceful manner.”
4. Thus, in view of the foregoing, since the objectionable portion in the impugned notice under Section 13(4) of the SARFAESI Act stands withdrawn by the respondent-Bank, no further adjudication is required at this stage. However, it is made clear that the respondent-Bank is under obligation to adhere to the statutory mechanism, as provided under the provisions of SARFAESI Act. Accordingly, this writ petition stands disposed of. Consequently connected miscellaneous petitions are closed. No costs.
