IMPORTANT POINT
Possession of secured assets – Banks and financial institutions have to apprise their borrowers of reason for not accepting objections or points raised in reply to notice served upon them.

ORDER (ORAL)

Ali Mohammad Magrey, J.—By this Petition, the Petitioners have assailed the Order dated 16th of January, 2020 passed by the learned Chief Judicial Magistrate, Srinagar, on an application filed under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’), whereby and whereunder the learned Chief Judicial Magistrate has appointed the Station House Officer of the concerned Police Station to take possession of the immoveable property/ secured asset, i.e., residential house with land underneath and appurtenant thereto measuring 01 Kanal and 14 ½ Marlas falling under Khasra No. 224 Min and 712 Min, Khata No. 22 Min and Khewat No. 12 Min situate at Azad Colony, 90 ft Road, Soura, Srinagar in Estate Awantabhawan, Tehsil and District Srinagar in the name of one Late Afroz Hussain Wani/ husband of the Petitioner No.1 herein and submit the report on the next date with prior information to the Authorized Officer of the Bank to remain present on spot on the scheduled date.

2. The Respondent-Bank, on the request of the predecessor-in-interest of the Petitioners, is stated to have sanctioned and disbursed the following credit facilities in his favour:—

3. In lieu of the aforesaid financial assistance, the predecessor-in-interest of the Petitioners is claimed to have executed various security documents on 11th of August, 2017 creating security interest, inter alia, in respect of the following secured assets in favour of the Bank: (i) Hypothecation of Stocks and book debts; and (ii) Equitable mortgage of residential house with land underneath and appurtenant thereto measuring 01 Kanal and 14 ½ Marlas falling under Khasra Nos. 224 Min & 712 Min; Khata No. 22 Min; and Khewat No. 12 Min situate at Azad Colony, 90 Feet Road, Soura, Srinagar in estate Owanta Bhawan, Tehsil and District Srinagar in the name of the predecessor-in-interest of the Petitioners.

4. On default in repayment of the aforementioned secured debt in violation of the terms and conditions agreed between the parties, the Respondent-Bank declared the account as ‘Non-Performing Asset’ with effect from 6th of September, 2018 as per the guidelines/ directions of the Reserve Bank of India. The amount due to the Bank, as on 30th of June, 2019, was detailed out as under:—

5. The Petitioners were further asked to pay interest @ 12.85% with monthly rests on the aforesaid total amount of Rs. 4,20,79,654/- w.e.f. 1st of July, 2019 till the date of repayment of the dues in full.

6. Thereafter, the Respondent-Bank, while claiming to be a ‘Secured Creditor’, as defined under the provisions of the Act in respect of the amount outstanding against the predecessor-in-interest of the Petitioners, in terms of Section 13(2) of the Act, issued notice bearing No. JKB/ZOKC-1/IAPM/SRFS/2019-5236 dated 6th of July, 2019 to the Petitioners to pay to the Bank all the amount outstanding against them in the books of accounts of the Bank within its branch at SSI, Lal Chowk, Srinagar, together with interest accrued thereon w.e.f. 1st of July, 2019 along with other charges and costs incurred by the Bank from time to time and thereby discharge in full all liabilities to the Bank within a period of 60 days from the date of the notice, failing which the following measures under the provisions of the Act were stipulated to be taken for recovery of the secured debt:—

(i) Take possession of the secured assets including the right to transfer by way of lease, assignment or sale of the secured assets;