The court emphasized the importance of preventing collusive decrees and ensuring appropriate action by the authorities under the SARFAESI Act.

JUDGMENT :

M. DURAISWAMY, J.:— The petitioner has filed the above Writ Petition to issue a Writ of certiorarified mandamus to call for the records and to quash the order passed by the District Collector cum District Magistrate, the 1st respondent dated 22.05.2018 and direct the 1st respondent to pass an order afresh as per provisions.

2. It is the case of the petitioner that the respondents 2 & 3 availed loan in the year 2012 from the petitioner against the property. Since the respondents 2 & 3 committed default in repaying the loan, the petitioner issued notice dated 29.01.2015 under Section 13(2) of the SARFAESI Act calling upon the respondents 2 & 3 to pay a total sum of Rs. 1,73,05,304.62p as on 29.01.2015. Thereafter, the petitioner issued Section 13(4) notice dated 08.05.2015 to the respondents 2 & 3. Challenging the possession notice dated 08.05.2015, the respondents 2 & 3 filed an appeal in S.A. No. 207 of 2015 on the file of the Debts Recovery Tribunal - III, Chennai and sought for an interim order.

3. The Debts Recovery Tribunal granted an order of interim stay on condition the petitioners paying a sum of Rs. 35 lakhs in two installments. However, the respondents 2 & 3 failed to comply with the conditional order. Thereafter, in the year 2015, the petitioner filed an application before the 1st respondent under Section 14 of the SARFAESI Act for taking possession of the property.

4. After the filing of Section 14 application before the 1st respondent, the 6th respondent, who claimed to be a tenant under the 2nd respondent, filed a suit in O.S. No. 2295 of 2016 on the file of the I Additional District Munsif Court, Puducherry for injunction restraining the 2nd respondent from disturbing or evicting her from the suit property in any manner without due process of law. The 2nd respondent appeared through counsel and he submitted to a decree. Accordingly, by judgment and decree dated 21.03.2017, the trial Court decreed the suit as prayed for.

5. The learned counsel appearing for the petitioner, in support of his contentions relied upon the following judgments:

(i) (2008) 1 SCC 125 [Transcore v. Union of India] wherein the Hon'ble Supreme Court held as follows:

“…As stated above, the NPA Act provides for recovery of possession by non-adjudicatory process, therefore, to say that the rights of the borrower would be defeated without adjudication would be erroneous. Rule 8, undoubtedly, refers to sale of immovable secured asset. However, Rule 8(4) indicates that where possession is taken by the authorised officer before issuance of sale certificate under Rule 9, the authorised officer shall take steps for preservation and protection of secured assets till they are sold or otherwise disposed of. Under Section 13(8), if the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the creditor before the date fixed for sale or transfer, the asset shall not be sold or transferred.”

(ii) (2013) 9 SCC 620 [Standard Chartered Bank v. V. Noble Kumar] wherein the Hon'ble Supreme Court held as follows:

“…

20. In every case, where the objections raised by the borrower are rejected by the secured creditor, the secured creditor is entitled to take possession of the secured assets. In our opinion, such action - having regard to the object and scheme of the Act - could be taken directly by the secured creditor. However, visualising the possibility of resistance for such action, Parliament under Section 14 also provided for seeking the assistance of the judicial power of the State for obtaining possession of the secured asset, in those cases where the secured creditor seeks it.

21. Under the scheme of Section 14, a secured creditor who desires to seek the assistance of the State's coercive power for obtaining possession of the secured asset is required to make a request in writing to the Chief Metropolitan Magistrate or District Magistrate within whose jurisdiction, the secured asset is located praying tha