Banks can seek police assistance to maintain possession of mortgaged properties under the Securitization Act, contingent on a Magistrate's directive.

JUDGMENT

Balakrishnan Nair, J:

The writ petitioners are respectively the General Manager and Deputy General Manager of the Nilambur Co-operative Urban Bank Limited. The 4th respondent availed a loan from the said Bank by depositing the original title deeds of his property and thereby creating an equitable mortgage. Since, the 4th respondent defaulted, the Bank invoked its powers under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after referred to as the Act). The Bank submits, as per Exts.P5 and P6, the property mortgaged has been taken over under Section 13 (4) of the Act. A public notification has been issued for sale of the property. While so, the 5th respondent came forward claiming that he purchased the property and he is presently the person in possession and ownership of the property concerned. He filed O.S.No.215/2007 before the Munsiff Court, Manjeri seeking an injunction against the Bank. Though, initially there was an interim injunction, the said interlocutory application was dismissed as per Ext.P13. The Civil Miscellaneous Appeal filed by him was also dismissed. Now, a civil revision petition is pending before this Court challenging the order in the appeal. As soon as the property was taken over, the Bank posted a security guard to protect the property. Now the 5th respondent is interfering with the possession of the property by the Bank and the said respondent along with his men are threatening the officials of the Bank. So, the Bank has filed Ext.P17 representation before respondents 1 to 3 for police protection. Since the said respondents were not extending the police protection, this writ petition is filed seeking appropriate reliefs.

2. The learned counsel for the 4th respondent submitted that he has not sold the property and has surrendered the possession of the property to the Bank by giving the key of the building to its officers. The 5th respondent, on the other hand, submitted that the 4th respondent has executed a power of attorney in favour of one person and on the strength of that power of attorney, the said person assigned a portion of the mortgaged property to him and he is in possession and enjoyment of that property.

3. The Bank is entitled to get the assistance of the District Magistrate not only for taking over of the property but also for maintaining its possession. This is evident from the provisions of Section 14 (1), which reads as follows:

“14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset:- (1) Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him -

(a) take possession of such asset and documents relating thereto; and (b) forward such assets and documents to the secured creditor.”

So, if the District Magistrate is satisfied that the petitioners'

case is a fit case, the said officer can direct the police to render assistance to the Bank to retain its possession of the property. But, in the absence of any dereliction of duty from the part of the police, we are not justified in issuing a direction under Article 226 of the Constitution of India to them. Going by the scheme of the Act, the police is not supposed to directly interfere in the matter, in the absence of any direction by the Magistrate concerned. Therefore, without prejudice to the contentions of both sid