Back
VIVEK RUSIA, GAJENDRA SINGH
Panjab Nation Bank Acting – Appellant
Versus
Additional District Magistrate – Respondent
ORDER
Per: Justice Vivek Rusia
With the consent of parties, heard finally.
1. The petitioner / Punjab National Bank has filed the present petition under Article 226 of the Constitution of India seeking direction to respondent No.1 to execute the order dated 11.11.2022 passed by the Additional District Magistrate, Agar Malwa in exercise of power conferred under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short 'SARFAESI Act').
2. The petitioner extended the credit facility to M/s Ruchi Agri Fresh Private Limited vide sanction letter dated 24.7.2015. On 31.3.2021, the account was declared non-performing asset due to default in repayment of loan.
3. A notice under section 13(2) of the SARFAESI Act was issued for recovery of the outstanding balance of Rs.1,01,98,107.68/-. Thereafter, possession notice under 13(4) of the SARFAESI Act was issued on 2.9.2021 and symbolic possession of the mortgaged property was taken by the Bank.
4. In order to take the possession of the mortgaged property, the Bank filed an application before the Additional District Magistrate. Vide order dated 11.11.2022, the Tehsildar was directed
A secured creditor loses its rights under the SARFAESI Act upon the auction of mortgaged property, precluding further claims for possession under the same Act.
The borrower's right of redemption is extinguished upon the publication of the auction notice, allowing the auction purchaser to claim possession.
A secured creditor retains rights over a property until actual possession is transferred, despite a sale certificate being issued to an auction buyer, as affirmed by the court.
The bank retains the right to recover debts through mortgaged properties even if the borrower sells the property to a third party, as established under the SARFAESI Act, 2002.
Point of Law - It is therefore held that the secured creditor, after service of notice under Rule 8 of the Rules, 2002, is entitled to take symbolic possession of the secured assets so as to sale suc....
Duty of Magistrate under Section 14 of SARFAESI Act is only to ascertain whether secured assets fall within his jurisdiction and to verify from bank or financial institutions whether notice under Sec....
Point of law : As per the settled law, duty of Chief Metropolitan Magistrate (CMM)/District Magistrate (DM) under Section 14 of the SARFAESI Act is only to ascertain whether the secured assets fall w....
The court established that the right of redemption under the SARFAESI Act is extinguished upon the issuance of a sale certificate, and timely challenge to bank actions is essential.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
