Possession taken under the SARFAESI Act must comply with statutory procedures; failure to serve proper notice constitutes a violation of constitutional rights.

JUDGMENT :

Pankaj Bhatia, J.

1. Heard Sri Manoj Kumar Dwivedi and Sri Ashish Chaturvedi, learned Counsel for the petitioner as well as Sri Abhishek Khare, Ms. Parul Sharma, Sri Shivansh Shukla and Sri Navneet Yadav, learned Counsel for the respondents.

2. The present petition has been argued by the petitioners alleging that the manner in which the possession has been taken violates the rights of the petitioners, which are vested by virtue of Article 300A of the Constitution of India. It was further alleged that the manner in which the possession was taken, was contrary to the mandate of Section 14 of The Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI Act”) and in view of violation of the constitutional and statutory rights, the petitioners have approached this Court.

3. The facts as arises from the present petition are that the petitioner no.1 had taken a loan for purchasing of school buses sometime in the year 2015 and the petitioners no.2 to 4 were the guarantors to the said loan. It was argued that there was a default in payment of the outstanding amount as such, the loan was classified as Non-Performing Asset (NPA) and the Bank issued a notice on 29.10.2020 under Section 13(2) of the SARFAESI Act. Subsequently, the respondent no.3-Bank, assigned its rights to the respondent no.2, which is a Assets Reconstruction Company. It also appears from the record that the notices under Section 13(4) were also issued and thereafter, an application was filed under Section 14 of the SARFAESI Act before the Additional District Magistrate (ADM), Gautambudh Nagar for taking possession of the property.

4. The ADM, in terms of the order dated 21.04.2023 (Annexure-1 to the writ petition), directed the respondent no.2 for taking possession of the property in question. It was also noticed in the said order that in case, there was any order passed by any court contrary to the said order, the order shall also come to an end. It was also directed that the respondent no.2 can take the actual possession of the property in question with the help of police authorities. The order was sent to the Additional Commissioner of Police for taking the effective steps for implementation of the order. It was also directed that the Bank and the Police, prior to taking possession would gave reasonable notice to the occupiers so that they can shift their goods elsewhere. The minimum notice prescribed was 48 hours upto one week in writing. It was also observed that at the time of taking possession, independent witnesses and an Officer appointed by the Police Commissioner shall be present. The petitioners challenged the said order dated 21.04.2023 by filing a Securitisation Application No.360 of 2023, on which, an order came to be passed disposing off the interim relief application holding that in view of the observations made by the Division Bench of High Court in Writ-C No.22594 of 2022, the ADM/ CMM (Chief Metropolitan Magistrate) was directed to issue at least 15 days prior notice before taking physical possession. The respondents were granted time to file objection.

5. It also appears from the record that certain directions were issued by the DRT for OTS proposal, which according to the petitioners was availed by depositing an amount of Rs.27/- lac, however, nothing appears to have transpired beyond that. Simultaneously, on 05.12.2023, a notice was issued for taking physical possession of the property in dispute on 27.12.2023 by the respondent no.2.

6. It is argued by the Counsel for the pet