The main legal point established in the judgment is the consideration of the relevant provisions under the SARFAESI Act, the availability of expeditious and effective remedies, and the non-maintainability of a writ petition against the proceedings under the SARFAESI Act.

ORDER :

(R. Mahadevan, J.)

(Prayer: Petition filed under Article 226 of the Constitution of India, to issue a writ of certiorarified mandamus calling for the records relating to the order dated 22.04.2022 of the Chief Judicial Magistrate in Crl.M.P.No.1053 of 2022, quash the same and consequently direct the respondent – Bank to extent OTS Scheme sanctioned on 25.01.2022 in SAMB/MDU/VK/512.)

Challenge in this writ petition is to the order dated 22.04.2022, passed in Crl.M.P.No.1053 of 2022, by the learned Chief Judicial Magistrate, Sivagangai, ordering to take possession of the secured asset, with a direction to the respondent – Bank to extend the scheme of one time settlement, which was sanctioned on 25.01.2022, to the petitioners.

2. Though there is an availability of expeditious and effective remedies under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, “the SARFAESI Act”), this writ petition has been filed, since the Debts Recovery Tribunal, Madurai, is not functional.

3. Before going into the issue raised in this writ petition, we deem it fit to consider the relevant provisions under the SARFAESI Act and the decisions of the Hon'ble Supreme Court as well as this Court in this regard, which will make one understand about the enforcement of security interest by the Banks or financial institutions in case of default in repayment of secured debt, vice versa the rights of the borrower against such enforcement.

4. Section 13 of the SARFAESI Act, which deals with enforcement of security interest, states that notwithstanding anything contained in Sections 69 or 69A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the court's intervention, by such creditor in accordance with the provisions of the Act.

5. Section 13(2) of the SARFAESI Act provides that when a borrower, who is under a liability to a secured creditor, makes any default in repayment of secured debt, and his account in respect of such debt is classified as non-performing asset, then the secured creditor may require the borrower, by notice in writing, to discharge his liabilities within sixty days from the date of the notice, failing which the secured creditor shall be entitled to exercise all or any of the rights given in Section 13(4) of the SARFAESI Act.

6. Section 13(3) of the SARFAESI Act provides that the notice under Section 13(2) of the SARFAESI Act shall give details of the amount payable by the borrower as also the details of the secured assets intended to be enforced by the bank. Section 13(3-A) of the SARFAESI Act was inserted by Act 30 of 2004 after the decision of this Court in Mardia Chemicals vs. Union of India reported in (2004) 4 SCC 311 and it provides for a last opportunity for the borrower to make a representation to the secured creditor against the classification of his account as a non-performing asset. The secured creditor is required to consider the representation of the borrowers, and if the secured creditor comes to the conclusion that the representation is not tenable or acceptable, then he must communicate, within one week of the receipt of the communication by the borrower, the reasons for rejecting the same.

7. Section 13(4) of the SARFAESI Act provides that if the borrower fails to discharge his liability within the period specified in Section 13(2), then the secured creditor, may take recourse to any of the following actions, to recover his debt, namely-

"(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;

(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset:

Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the busines