The SARFAESI Act allows concurrent enforcement and arbitration proceedings, providing cumulative remedies for secured creditors.

JUDGMENT

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Petitioners, who are borrowers of a financial advance from the 1^st respondent-Bajaj Finance Limited, are seeking to quash Ext.P3 notice issued by the Advocate Commissioner appointed by the Chief Judicial Magistrate's Court, Thrissur under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 .

2. The petitioners state that the home loan was obtained from the respondent based on an agreement dated 31.10.2014. The respondent invoked the arbitration clause in the agreement to realise the loan amount from the petitioners. By Ext.P1 Claim Statement, the respondent sought to recover approximately ₹1.99 Crore from the petitioners.

3. In the Claim Petition before the Arbitrator, the respondent prayed that the petitioners be directed to handover the possession of the mortgaged residential property owned by petitioners 2 to 4. The petitioners state that the petitioners and family have no other place of abode than the mortgaged property.

4. When arbitration proceedings are pending, the respondent invoked proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Ext.P3 notice of the Advocate Commissioner appointed under Section 14 of the Act, 2002 is now served on the petitioners, threatening to take physical possession of the property mortgaged by the petitioners. The petitioners apprehend that they will be dispossessed from the residential building where they reside with family.

5. The petitioners submit that any action based on Ext.P3 cannot continue when adjudicatory proceedings are on before the Arbitrator. The petitioners would assert that proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 are in the nature of enforcement which has to await adjudicatory proceedings before the Arbitrator. In the circumstances, Ext.P3 is liable to be quashed, contended the petitioners.

6. I have heard the learned counsel for the petitioners and the learned counsel appearing for the respondent.

7. The 1^st petitioner is the borrower of a loan taken from the respondent as per agreement dated 31.10.2014. Petitioners 2 to 4 are co-borrowers. The loan was a home loan and an amount of ₹1.78 Crore was disbursed to the petitioners. When repayment of loan was defaulted, the respondent invoked the arbitration clause in the agreement dated 31.10.2014 and a Sole Arbitrator was appointed. One of the final reliefs sought for in the Claim Statement filed by the petitioners before the Sole Arbitrator is to direct the petitioners to forthwith handover possession of the mortgaged property, which is a residential building of petitioners 2 to 4.

8. The petitioners are challenging a notice issued by the Advocate Commissioner intimating his intention to take physical possession of the property mortgaged as security for the loan amount. Ext.P3 notice has been issued in pursuance of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 .

9. The contention of the petitioners is that since arbitration proceedings which are adjudicatory in nature, are pending, securitisation proceedings which are executory in nature, have to wait till Arbitrator passes an Award. Ext.P3 is therefore unsustainable. The petitioners would contend that there is no strict adherence to the provisions of the Act, 2002 and the Rules made thereunder before issuing Ext.P3 inasmuch as, according to the description in Ext.P3, the petitioners have no property.

10. The question arising for consideration is whether the arbitration proceedings initiated by the respondent and securitisation proceedings under the Act, 2002 can proceed simultaneously. By setting up Debts Recovery Tribunals under the RDDB Act, specialised Tribunals came into existence entertaining monetary claims by the Banks and financial institutions. Sui