IMPORTANT POINT
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 Section 13(2) of SARFAESI Act has been given or not – Once these two conditions are fulfilled, Magistrate has no option, but to pass order – There is no necessity of hearing or even notifying borrower or any third party.

JUDGMENT

Rule. Rule made returnable forthwith. By consent of counsel for the parties, the petition is heard finally.

2. By this Petition filed under Article 226 of the Constitution of India, 1950, Petitioner seeks to challenge the order dated 15.08.2021 passed by respondent no.2-District Magistrate, Solapur under Section 14 of the Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) in Secu./SR/64/2020 and the auction notice dated 20th February, 2021 issued by Respondent No.1 – Bank and also the auction which has already taken place and sale price received from Respondent No.5.

3. The facts leading to the filing of the petition are as under:—

Petitioner had availed of financial assistance of term loan and cash credit facility of total amount of Rs. 4,55,00,000/- from the respondent no. 1 Bank out of which a total of Rs. 2,69,00,000/- was disbursed on the security of its property i.e. factory property at village Kumbhari, Solapur and house property at New Pacchha Peth, Solapur.

4. On 31.05.2019, the respondent no. 1 bank declared the account of the petitioner as Non Performing Asset (NPA). On 09.07.2020, respondent no.1 bank issued two notices under Section 13 (2) of the SARFAESI Act, one in respect of term loan and other in respect to the cash credit. Petitioner replied to the said notices vide letter dated 14.09.2020. Respondent no. 1 bank also filed rejoinder to the said letter vide letter dated 28.09.2020. Thereafter, respondent no.1 bank issued public notice under Rule 8(1) of the Security Interest (Enforcement) Rule, 2002 (the “Security Interest Rules”) informing the public at large that the physical possession of the factory property was taken over by respondent no.1 bank on 19.11.2020. Also on 19.11.2020, symbolic possession of the house property was taken by the respondent no.1 bank. An auction notice dated 15.12.2020 was published in the local Marathi newspaper named “Sanchaar” on 16.12.2020 scheduling the auction on 19.01.2021. Soon thereafter, petitioner filed an application under Section 17 of the SARFAESI Act bearing Securitisation Application no. 148 / 2020 before the Debt Recovery Tribunal (DRT), Pune challenging the said auction notice, which is admittedly pending. Thereafter, during the pendency of the said application under Section 17 of the SARFAESI Act, petitioner filed writ petition bearing no. WP(ST) 99895 of 2020 before this Court challenging the said auction notice. In view of the pendency of the application under Section 17 of the SARFAESI Act, the said writ petition came to be disposed off vide order dated 07.01.2021 directing the petitioner to approach the DRT. The said order is quoted as under:-

“1. Heard the learned Counsel for the parties.

2. A preliminary objection is taken by the Respondents that the Petitioner has a remedy in law to approach the Debt Recovery Tribunal and in fact the Petitioner has already approached the Debt Recovery Tribunal.

3. The learned Counsel for the Petitioner submitted that the Petitioner was orally informed by the learned Counsel representing the Petitioner that in the Tribunal, that Debt Recovery Tribunal, Hyderabad is not granting circulation. This cannot be a ground for entertaining a writ petition. Further the learned Counsel for Respondent submitted that the Debt Recovery Tribunal, Aurangabad is taking up the cases now.

4. The learned Counsel for the Petitioner submitted that sale of the property in question is scheduled on 19 January 2021. It is open to the Petitioner to make a request to the Debt Recovery Tribunal taking up the matter to take the Petitioner’s application before 19 January 2021 and it is open for the Debt Recovery Tribunal to consider the same.

5. The Writ Petition is accordingly disposed of. All contentions of the parties are kept open.”

5. Thereafter, petitioner filed i