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SUSHRUT ARVIND DHARMADHIKARI, GAJENDRA SINGH
Virendra Rathore & Others v. Tehsildar Distt. Mandsaur (Madhya Pradesh) – Appellant
Versus
Tehsildar Distt. Mandsaur (Madhya Pradesh) – Respondent
ORDER
1. The present petition under Article 226/227 of the Constitution of India takes exception to the impugned order dated 7.8.2023 passed by the Chief Judicial Magistrate (CJM), District Mandsaur under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’). The action is sought to be taken under section 14 for recovery of a loan amount due on the part of the petitioner owed to Respondent no. 2 (SRG Housing Finance Limited) (for short ‘Respondent HFC’).
2. Shorn of unnecessary details, the petitioner borrowed a secured loan of Rs. 8,00,000 (8 Lacs) from Respondent HFC, mortgaging his property as a collateral in lieu of the said loan. On his default in repayment, the amount became outstanding and proceedings under section 13 of the SARFAESI Act of 2002 were initiated. Followed by declaration of NPA and section 13 proceedings, the CJM also directed for coercive measures against the petitioner under section 14 of the SARFAESI Act, taking over of possession, vide order dated 4.8.2023 passed in Case No. MJCR/2606/2023.
This has triggered the filing of the present writ petition.
3. Issue for resolu
Housing Finance Companies are classified as Non-Banking Financial Companies, bound by threshold limits for invoking SARFAESI Act, with actions below Rs. 20 lakh deemed unauthorized.
Financial institutions cannot initiate SARFAESI proceedings for loan amounts below Rs.20,00,000/- as per Central Government regulations.
The court affirmed that the respondent qualified as a financial institution under the SARFAESI Act, rendering the recovery proceedings lawful and the writ petition non-maintainable due to available s....
The SARFAESI Act provides an efficacious and expeditious remedy to borrowers under Section 17, allowing them to challenge the actions of the secured creditor. The absence of a judicial remedy under C....
Writ petitions against private financial institutions under the SARFAESI Act are not maintainable; statutory remedies must be pursued instead.
The High Court should not exercise jurisdiction under Article 226 in matters governed by the SARFAESI Act where effective remedies exist, and classification of accounts as NPAs is not subject to judi....
SARFAESI Act is a complete code by itself, providing for expeditious recovery of dues arising out of loans granted by financial institutions.
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