The remedy under Section 17(1) of the Act is available only after the secured creditor has taken actual possession under Section 13(4); symbolic possession does not entitle the borrower to challenge the creditor's actions.

1. The order of Reference dated 19 September 2017, which has occasioned the constitution of a larger Bench, has been passed by learned Single Judge, after having noticed the divergent opinions expressed by two Division Benches of this Court in Sushila Steels Vs. Union Bank of India and others (Special Appeal No. 415 of 2014, decided on 23.04.2014), and Aum Jewels and others Vs. Vijaya Bank (Writ - C No. 13476 of 2017, decided on 30.3.2017) on the question whether an application under S.17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act'), at the instance of a borrower, is maintainable even before physical (actual) possession of the secured assets is taken by the Bank / FIs in exercise of its powers under S.13(4) thereof read with R.8 of the Security Interest (Enforcement) Rules, 2002 (for short “the Rules”)

2. By means of this petition (No. 20026 of 2017) under Art.226 of the Constitution of India, the petitioners (M/s N.C.M.L. Industries Ltd. and another) called in question the validity of an order dated 2.8.2017, passed by the Debts Recovery Appellate Tribunal, Delhi, (for short “DRAT”), as it then was holding charge of DRAT, Allahabad, whereby an appeal No. 86 of 2017, preferred under S.18 of the Act, has been disposed of. The appeal was preferred by the respondent - Bank against an order dated 27.02.2017 passed by the Debts Recovery Tribunal, Lucknow (for short 'DRT'), on Securitisation Application No. 435 of 2016 (for short “the Application”), instituted under S.17(1) of the Act. By this order (27.02.2017), the DRT had granted interim relief in favour of the petitioners, restraining the respondent - Bank from taking physical possession of the secured assets during the pendency of the Securitisation Application. The DRAT, while allowing the appeal inter alia held that the Application under S.17 of the Act is not maintainable as only “symbolic possession” was taken by the Bank. For taking such a view, the DRAT placed heavy reliance upon the judgment of a Division Bench of this Court in Sushila Steel (supra).

3. The facts leading to filing of the writ petition, to the extent, that are necessary are as follows: The respondent - Bank had extended some financial facilities to the petitioner No.1 - Company to which petitioner No.2 stood Guarantor. Since the petitioners made default in repayment of secured debt / installments thereof, the respondent - Bank initiated proceedings under the provisions of the Act by issuing a notice under S.13(2) on 23.11.2015 requiring the borrower to discharge in full his liability. The notice was replied by the petitioners by way of a representation / raising objections dated 20.1.2016. The objections / representation however came to be rejected by the respondent - Bank vide its communication dated 9.2.2016. Thereafter, the petitioners claim that they made additional representation dated 14.2.2016 requesting the respondent - Bank to reconsider their earlier representation / objections dated 20.1.2016. According to the petitioners, so far the respondent - Bank has not considered and decided the same.

4. In this backdrop, it appears a notice, under R.8 read with Appendix IV of the Rules for possession, was issued by the Bank, stating that a symbolic possession of their immovable secured assets, as described in the schedule to the notice, has been taken under S.13(4) of the Act. It appears that the Authorised Officer of the Bank did not take physical possession of the secured assets. This notice made reference to the notice, that was issued to the petitioners under S.13(2) r