IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated:- 11.06.2007 Coram The Honourable Mr. A.P. SHAH, CHIEF JUSTICE and The Honourable Mr. Justice P. JYOTHIMANI W.P. Nos.8517, 8518, 9291, 42496, 46476 of 2006 and 12741, 12733, 11244, 1797, 22241, 10977, 10571, 10532, 10116, 2443, 13198, 11079, 15192, 12090, 2433, 8196, 11068, 12099, 12054, 3895, 3746, 3747, 4820, 4821, 4321, 10051, 1681, 5345, 5655, 9904 and 9905 of 2007 Misons Leather Ltd, represented by its Managing Director 13. Kumarappa Street, Periamet, Chennai-3. ... Petitioner in W.P.8517 of 2006 Misons Shoe Fabric Ltd, represented by its Managing Director 13. Kumarappa Street, Periamet, Chennai-3. ... Petitioner in W.P.8518 of 2006 Euro India Shoes (Madras) Pvt. Ltd., represented by its Director 13. Kumarappa Street, Periamet, Chennai-3. ... Petitioner in W.P.9291 of 2006 1. K. Bhojan Partner Sreekal Tea Industry Gattakanbai Tuttapallam Post Kotagiri. 2. Parvathy Bhojan Partner Sreekal Tea Industry Gattakanbai Tuttapallam Pot Kotagiri. https://hcservices.ecourts.gov.in/hcservices/ Petitioners 1 & 2 rep by their power of Attorney Agent Mr.B. Jagadeesh the 3rd Petitioner 3. B. Jagadesh Partner Sreekal Tea Industry Gattakombai Tuttapalayam Post Kotagiri. ... Petitioner in W.P.42496 of 2006 T.W. Air Freight Madras Pvt Ltd, II nd Floor, "Vanguard" 48 2nd line beach Road, Chennai-1. represented by its Managing director ... Petitioner in W.P.46476 of 2006 1. M/s. RBR A Funds Door No.33/20 Ramalingam Layout KPN Colony, 4th Street Tirupur by its Sole- Proprietor Mr.R.P. Ramakrishnan 2. Mr.R.P. Pandurangan S/o. Sr R. Pattabiraman Chettiar Door No.33/20 Ramalingam Layout KPN Colony, 4th Street Tirupur 3. M/s. Vijaya Finance Door No.33/20 Ramalingam Layout KPN Colony, 4th Street Tirupur by its Sole Proprietrix Smt. R.P. Parvatham ... Petitioner in W.P.12741 of 2007 M/s. Brindavan Tea & Industries represented by its Managing Partner B. Jairam Nedugala, Kotagiri- 643 217 ... Petitioner in W.P.12733 of 2006 1. M/s. Ramco super Leathers Ltd, Sethu House No.28 Dr. Alagappa Road, Chennai-84 https://hcservices.ecourts.gov.in/hcservices/ 2. M/s. Rukmani Exports P. Ltd, C-4 Rams Building, No.21, Raja Annamalai Road, Chenna-84 3. S.Ramasamy 4. S. Muthukaruppan 5. S. Palaniappan 6. PSL Property Development Ltd, No.28 Alagappa Road, Chennai-84 ... Petitioner in W.P.11244/2007 Petitioners 2, 1 and 5 in W.P.8196/07 P. Sengottaiyan sole Proprietor Bharathy Sago Factory and Bharathy Modern Rice Mill Sarvoy Villate and Post Attur Taluk, Salem District ... Petitioner n W.P.1797/2007 M/s. M.A. Ismail & Co Rep by its Partner Shabeer Ahmed 122, MBT Road Ranipet. ... Petitioner n W.P.22241/2007 1.K. Muralidharan 2.Anantharaman 3.Pushpavalli 4.Sumathi 5.M. Puzhazhendhi 6.S. Ramabadran ... Petitioner n W.P.10977/2007 P. Parivallal ... Petitioner n W.P.10571/2007 Mrs. Muthulakshmi alias Lakshmi ... Petitioner n W.P.10532/2007 M/s. Anandha Ganapathy Mahal Rep by thiru G. Rajagopal No.390 Nagai Main Road Thanjavur. ... Petitioner n W.P.10116/2007 1. M/s. Tamilnadu chormates and Chemicals Limited Rep by its Authorised Signatory Mr.G. Sunderrajan https://hcservices.ecourts.gov.in/hcservices/ 109, Mahatma Gandhi Road, 4th Floor Chennai-34. 2. Ashok Balasubramanian 3. Rajeswari Balasubramanian ... Petitioner in W.P.2443/2007 D. Selvaraj Managing Partner Sree Lakshmi Foundary 9/74 Uthupalayam Arasur Coimbatore- 641 407. ... Petitioner n W.P.13198/2007 1. M/s. Ramco Super leathers Ltd, rep by its Director, (Formerly known as M/s. RSL Industries Ltd, Sethur House No.28 Dr Alagappa Road, Purasawalkkam Chennai-84 ... Petitioner 2 in W.P.8196/07 Petitioner 1 in W.P.11078/07 2. M/s. Rukmani Exports P.Ltd., rep by its Director Sethur House No.28 Dr alagappa Road, Purasawalkkam Chennai-84 ... Petitioner1 in W.P.8196/07 ... Petitioner2 in W.P.11078/07 3. S. Ramaswamy ... Petitioner5 in W.P.8196/07 ... Petitioner3 in W.P.11068/07 4. S. Palaniappan ... Petitioner5 in W.P.11068/07 5. R.M. Angammal 6. S. Kamalam 7. D. Muthukarupppan ... Petitioner4 in W.P.11068/07 8. M. Manimegalai ... Petitioners in W.P.11079/2007 A.P. Veerappan ... Petitioner in W.P.15192/2007 P. Muthu ... Petitioner in W.P.12090/2007 https://hcservices.ecourts.gov.in/hcservices/ M/s. Sathya Foundations Private Ltd, rep by its Director C. Sathya Samuel West Tambaram, Chennai-45. ... Petitioner in W.P.2433/2007 3. M/s. Yem Pee Yem Investments P. Ltd, No.28 Dr. Alagappa Road Chennai-84 4. M/s. G.P. Asia Ltd, No.5 Kumarappa Chetty Street Periamet, Chennai-34. ... Petitioners 3 and 4 in W.P.8196/2007 M/s. Hamosons Exports Private Ltd, rep. by its Managing Director Moosa Ahmed, H.M. Centre, I Floor, No.15-A, Nungambakkam High Road Chennai-34. 2. M/s. T.S. Hajee Moosa & Co rep by its Partner Moosa Ahmed Plot No.33 & 34 Thiru Vi ka Industrial Estate Guindy, Chenai-32. ... Petitioner in W.P.12099/2007 1. M/s. Famex Exports Private Ltd, rep by its Managing Director Moosa Ahmed, No.33 Kalaimagal Nagar Guindy Industrial Estate Ekkattuthangal Chennai-97. 2. M/s. H.M. Textiles Rep by its Proprietors M/s. Amex Garments Private Ltd No.74 Godown Street Chennai-1. ... Petitioner in W.P.12054/2007 Mrs. Tasneem Rizwan ... Petitioner in W.P.3895/2007 https://hcservices.ecourts.gov.in/hcservices/ M/s. Blue Bell Textiles Ltd Mulvoy Village rep by its Managing Director N. Venugopal ... Petitioner in W.P.3746/2007 M/s. Envee Constructions No.9 6th Street, T.N. Nagar.,Palanipet Arakkonam-2 rep by its Managing Partner Mrs. Vasantha Venugopal ... Petitioner in W.P.3747/2007 1. M/s. Venus Mrketing Services P Ltd, rep by its Directors C-26 Anna Nagar East Chennai-102 2. T.S. Mani alias Mr.T.s. Pitchumani 3. P. Saraswathi 4. M/s. MBO Computers India (P) Ltd rep by its Director C-26 Anna Nagar East Chennai-102. ... Petitioners 1 to 4 in W.P.4820/2007 Petitioners 4,2,3 and 1 in W.P.4821/07 S. Prabhu Sole Proprietor M/s. Palaniappa Sago and Starch Industry Vadakumarak Village Sarovoy P.o Attur Taluk Salem District. 636 121. ... Petitioner in W.P.4321/2007 Mr. Sathi Reddy ... Petitioner in W.P.10051/2007 N. Gajendran ... Petitioner in W.P.1681/2007 N. Somasundaram ... Petitioner in W.P.5345/2007 Mrs. Soroj Jain ... Petitioner in W.P.5655/2007 Mr. Babulal Surana ... Petitioner in W.P.9904/2007 Smt. Lalitha Kanwar ... Petitioner in W.P.9905/2007 Vs https://hcservices.ecourts.gov.in/hcservices/ Canara Bank represented by its Chief Manager No.131, A.N. Street Chennai-79 ... Respondent in W.P.Nos.8517, 8518, 9291 1. Union of India represented by its Secretary to Government Ministry of finance Department of Finance New Delhi. ... Respondent in W.P.42496/2006 R1 in W.P.10571/07 R1 in W.P.46476/06 R1 in W.P.2433/07 and R2 nil R1 in W.P.12741/07 R1 in W.P.12733/07 R2 nil R1 in W.P.11244/07 R1 in W.P.1797/07 and R2 nil R1 in W.P.10977/07 and R2 nil R1 in W.P.13198/07 R1 in W.P.11079/07 R1 in W.P.8196/07 R1 in W.P.11078/07 R1 in W.P.12099/07 R1 in W.P.12054/07 R1 in W.P.4321/07 R1 in W.P.3895/07 R1 in W.P.3746 & 3747/07 R1 in W.P.5345/07 R1 in W.P.5655/07 2. Union Bank of India Regional Office 649/50 Oppanakara Street Coimbatore ... R2 in W.P.42496/06 Authorised Officers Indian Overseas Banks Mylapore Branch No.177 Lay Church Road, Mylapore, Chenna-4 ... R2 in W.P.46476/2006 https://hcservices.ecourts.gov.in/hcservices/ The Authorised Officer The karur Vysya Bank Ltd, Main Branch 315 Kumaran Road Tirupur ... R2 in W.P.12741/2007 2. Reserve Bank of Indian Central Office Building Shahid Bhagtsingh Road Bombay- 400 001 ...R2 in W.P.12733 of 2007 R2 in W.P.11244 of 2007 R3 nil R2 in W.P.10571 of 2007 R3 nil R2 in W.P.2443 of 2007 R2 in W.P.11079 of 2007 R2 in W.P.8196 of 2007 R2 in W.P.11068 of 2007 R3 in W.P.3895 of 2007 R4 in W.P.3746 and 3747 of 2007 3. The Chief Manager and Authorised Officers Bank of India Coimbatore Zone 324, Oppanakara Street Coimbatore- 641 001 R3 in W.P.12733/07 3. The Debt Recovery Tribunal I Spencer Towers Anna Salai, Chennai-2. ... R3 in W.P.11244 of 2007 ... R3 in W.P.11079 of 2007 ... R3 in W.P.11068 of 2007 4. State Bank of Travancore Mount Road Branch 162, Anna Salai, Chennai-2 ... R4 in W.P.11244/07 Punjab National Bank Regional Office Salem. ... R2 in W.P.1797/2007 1. The Debts Recovery Tribunal I VI FloorSpencers towers Madras-2. https://hcservices.ecourts.gov.in/hcservices/ 2. The Authorised Officer State Bank of Indian commercial Branch Palar Towers MBT Road Walajapet ....respondents 1 and 2 in W.P.22241/2006 2. Repco Home Finance Ltd, No.2897 and 2898 , south Mada Street Thanjavur- 613 009. 3. Tha Authorised officer Repco Home Finance Repco Towers, North Usman Road T. Nagar, Chennai ... RR2 and 3 in W.P.10977/07 3. The Authoised Officer Indian Bank Circle Office, Dharmapuri ...R3 in W.P.10571/07 The Authorised Office Syndicate Bank Oppanakara Street, Coimbatore ... Respondent in W.P.10532 of 2007 1. The Union of India represented by the Secretary to Government, Banking and Law, New Delhi. 110 001 2. The Lakshmi Vilas Bank represented by its Chief Manager Salem Main Road, Karthaparai, Karur- 639 006. RR1 and 2 in W.P.10116 of 2007 3. Chief Manager Indian Bank Asset Recovery management Branch, 4 Floor Circle Office Building, 55 Ethiraj Salai, Chennai-8. 4. Indian Bank Ranipet Branch rep by its Assistant General Manager Vellore Region Ranipet Industrial Complex Ranipet, Vellore district ... RR3 and 4 in W.P.2443/07 https://hcservices.ecourts.gov.in/hcservices/ 2. The Authorised officer State Bank of India Redfields Coimbatore- 641 018 R2 in W.P.13198/07 4. The Federal Bank Ltd, Registered office at Alwaye (Kerala) Having Branch Office at Mount Road, Chennai-2. ... R4 in W.P.11079/07 1. The Debt Recovery Tribunal II Anna Salai, Chennai 2. Tamilnadu Mercantile Bank Ltd, George Town Branch Chennai-1. 3. M/s. G.D. Nadar Paper Co, No.39 Anderson Street, ISt Floor Chenna-1 4. Mr.K. Dhinakaran Partner M/s. G.D. Nadar Paper Co 7 Friends Avenue Arumbakkam, Chennai. ... RR1 to 4 in W.P.15192/2007 1. State Bank of India Region II Zonal office, No.21/86 Rajaji Salai Chennai-1. 2. The Authorised Officer State Bank of India No.34 Kosamada Street Thiruvannamalai- 6060 601. 3. The Chief Manager State Bank of India Thiruvannamalai ... RR1 to 3 in W.P.12090 of 2007 1. Ind bank Housing Ltd, rep by its Company Secretary Authorsed Officer Corporate Office at 480 anna Salai, III floor Nandanam, Chennai- 35. https://hcservices.ecourts.gov.in/hcservices/ 2. Union of India rep by the Secretary to Government Ministry of Finance North Block, New Delhi. ... Respondents 1 and 2 in W.P.2433/07 3. UTI Bank Ltd, Central Office Market Towers F 13th Floor, Cuffe Parade Colaba, Mumbai-5. 4. UTI Bank Ltd, No 82 Dr. Radhakrishnan Salai Chennai-4. RR3 and 4 in W.P.8196/07 4. UCO Bank International Banking Branch 328 Thambu Chetty Street Chennai-1 .. R4 in W.P.11068 of 2007 2. The Debts Recovery Tribunal II No.770A Anna Salai, Spencer's Towers 4th Floor, Chennai-2 3. M/s. Canara Bank rep by its Authorised Officer Asset Recovery management Branch Spencer's Towers -II First Floor No.770-A, Anna Salai Chennai- 600 002 ... RR2 and 3 in W.P.12099/07 and 12054/07. R2. The Authorised Officer State Bank of India Special Housing Finance Branch No.157 Anna Salai, Chennai-2. R4. K.V. Narendran ... RR2 and 4 in W.P.3895 / 07 2. The Authorised Officer Indian Bank Vellore Circle Office Vellore District https://hcservices.ecourts.gov.in/hcservices/ 3. The Senior Manager Indian Bank Arakkonam Branch Arakkonam, Vellore District ... RR2 and 3 in W.P.3746 & 3747 of 2007 The Authorised Officer ING Vysya Bank Ltd, SME Regional Office Chennai Apex Chamber III Floor 20 Sri Thyagaayar Road T. Nagar, Chennai-17 ... Respondents in W.P.Nos. 4820 and 4821/2007 The Indian Overseas Bank rep by its Branch Manager cum Authorised Officer Leigh Bayar Branch Salem - 639 009. ... R2 in W.P.4321/07 1. Union of India represented by its Secretary to Government Ministry of Finance Department of Economic Affairs Banking Division, New Delhi- 110 001. 2. State Bank of India Ambattur Branch represented by its Chief Manager No.73- 74C MTH Road, Venkatapuram Ambattur, Chennai-53. ... Respondents 1 and 2 in W.P.10051/07 1. The Chief Manager cum Authorised Officer State Bank of India Arni Branch, Arni Thiruvannamalai District. 2. The Chief Manager State Bank of India V Zonal Office Chennai-1. ... Respondents 1 and 2 in W.P.1681/07 https://hcservices.ecourts.gov.in/hcservices/ 2. The Authorised officer Canara Bank of India Regional Office Kancheepuram 3. Canara Bank of India Panapakkam Branch Arakkonam Taluk, Vellore District ... Respondents 2 & 3 in W.P.5345 of 2007 2. The Authorised Officer Indian Overseas Bank Assert Recovery Management Central Office Annexure building No.763 Anna Salai, Chennai-2 3. The Indian Overseas Bank Sowcarpet Branch, Devi Complex 1st Floor No.143 NSC Bose Road Chennai. ... RR2 and 3 in W.P.5655/07 The Authorised Officer United Bank of India 217 R.K. Mutt Road Mylapore, Chennai-4. ... Respondents in W.P.9904 and 9905 of 2007 Writ Petitions filed under Article 226 of the Constitution of India to issue a Writ of Certiorari calling for the records relating to the notice of the Respondent ARM.MIS.184 2006-HSR dated 28.2.2006 issued under Section 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 quash the same (W.P.No.8517 of 2006) 8518 of 2006 , 9291 of 2006. 2. notice ref.No.Nil dated 7.2.2006 issued by the Second respondent and quash the same (W.P.No.22241 of 2006) Writ of Declaration declaring sub Sections 2 to 7 of Section 17 of the Securitisation and reconstruction of Financial Assets and Enforcement of security interest Act 2002 as amended and substituted by Section 10 (b) 06 the Enforcement of Security of Interest and Recovery of debts Laws (Amendment) Act 2004 and 30 of 2004 as ultra vires unconstitutional and illegal in W.P.42496/2006, 46476 of 2006, 12741 of 2007, 1797 of 2007, 10977/2007, 10532 of 2007, 4820 and 4821/ 2007, 4321/2007, 9904 and 9905 of 2007. https://hcservices.ecourts.gov.in/hcservices/ 2. declaring Sections 17 (2) to 17(4) and 17(2) to 17(7 ) of Securitisation and Re-constructions of Financial Assets and Enforcement of Security Interest Act 2002 as ultra vires unconstitutional and illegal in (W.P.12733/2007 and W.P.11244 of 2007, 10571/2007, 2443/07, 13198/07, W.P.11079/07, W.P.8196/07, 11068/07, 12099/07, W.P.12054/2007, 3895/07, 3746 and 3747/07, 5345/07, 5655/07. 2.a. (Act 54 of 2002) as substituted by Section 10 of the Enforcement of Security of Interest and Recovery of Debt Laws Amendment Act 2004 as constitutional (W.P.2433/07) 3. declaring that Sec 17 of Securitization Act and reconstruction of Financial Assets and Enforcement of Security interest Act as unconstitutional illegal W.P.10116/2007. 4. declaring Sub Section (2) (3) and (4) of Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 as amended and Substituted by Section 10 (b) of the enforcement of Security of Interest and Recovery of Debts laws (Amendment) Act 2004 and the notice dated 9.6.2006 issued by the Second Respondent and possession notices dated 13.2.2007 issued by the second respondent in ultra vires unconstitutional invalid and illegal (W.P.12090/07) Writ Petitions filed under Section 226 of the Constitution of India to issue a writ of Certiorarified Mandamus (i) to call for the proceedings of the first respondent dated on 8.3.2007 holding that two other witnesses 1. Mr. Varuvel (2) Kamaraj are not necessary for cross Examination by the Petitioner (ii) And the proceedings dated 26.3.2007 containing insufficient evidence of Cross Examination of PW1 Mr. Anbalagan certaining blanks scored by Cross marks and to quash those interlinked proceedings directing the Ist respondent to make PW 1 Mr. Anbalagan for Cross Examination afresh and to make Mr. Varuvel and Mr. Kamaraj for Cross Examination inO.A.No.159 of 2003 on the of D.R.T.II Chennai and directing to grant a certified copy of the complete record of evidence after cross Examination in. (W.P.No.5192 of 2007) Writ Petition filed under Article 226 of the Constitution of India to issue a writ of Mandamus directing the second respondent to regularise and accept one time settlement of the loan account No.10403031969 of the Petitioner with the second respondent in W.P.10051 of 2007. Writ of certiorarified Mandamus to call for the records pertaining to the issue of possession notice dated 6.11.2006 duly https://hcservices.ecourts.gov.in/hcservices/ issued under Rule 8 (1) of the Security Interest (Enforcement) Rules 202 and the consequent issue of sale notice dated 15.11.2006 under Section 8(6) of the Security interest(enforcement) Rules 2002 duly issued by the Chief Manager cum Authroized Officer State Bank of India Arani Branch Arani, Thiruvannamalai District namely Ist Respondent and quash the same and direct the respondents to release the Petitioners properties from the clutches of the sarfaesi Act (W.P.1681 of 2007) Mr. Vijay Narayan SC for M/s. Narmadha Sampath and A. Saravanan ... Petitioner in W.P.8517, 8518, 9291/2006 W.P.11244/2007, 2443/2007, 11079/2007, 8196/2007, 11068/2007 MR.K. Venkatachalapathy SC for M/s. M. Kamalanathan R. Kamaraj K.B. Vivekananthan ...Petitioner IN W.P.42496/2006 M/s. Geetha Rajasekar ... Petitioner in W.P.46476/2006 Mr. B. Raviraja ... Petitioner in W.P.12741/2007 Mr.K. Venkatasubbaraju ... Petitioner in W.P.12733/2007 M/s. D. Meera and Swaminathan ... Petitioner in W.P.1797/2007, 10977/07, 10532/07, 4820 and 4821/07, 4321/07, 9904 and 9905/07 M/s. V. Kalyanaraman and Shanmugasundaram ... Petitioner in W.P.22241/06 Mr.K. Moorthy ... Petitioner in W.P.10571/07 Mr.P. Seshubalan Raja ...Petitioner in W.P.10116/07 MR. T.L. Thirumalaiswamy ... Petitioner in W.P.13198/07 Mr.K. Selvaraj ... Petitioner in W.P.15192/07 Mr.P.V.S. Giridhar Associates ... Petitioner in W.P.12090/07 Mr. Sathish Parasaran ... Petitioner in W.P.2433/07 Mr. Jayesh Dolia for M/s. M.S. Shanmugha Sundaram ... Petitioner in W.P.12099/07 https://hcservices.ecourts.gov.in/hcservices/ Mr.M.S. Shanmugaseundarm ... Petitioner in W.P.12054/07 Mr.G. Jeremiah ... Petitioner in W.P.3895/07, 3746 and 3747/07 , 5345/07, 5655/07 Mr.K. Mohana Murali ... Petitioner in W.P.10051/07 Mr.D. Ashok Kumar ... Petitioner in W.P.1681/07 Mr.V. Paul Doss for Mr.N. Srinivasan M/s. Sampath Kumar Associates for Respondent ... Respondent in W.P.8517, 8518, 9291 M/s. K. Rajasekar ... R2 in W.P.42496/2006 R1 in No Appearance Mr.V.T. Gopalan SG and SC for Mr.F.B. Benjamin George R2 in W.P.46476 of 2006 R1 not ready R1 in W.P.12741 of 2007 R2 NR R3 in W.P.12733 of 2007 NR 1 and 2 R1 in W.P.11244 of 2007 NR R2, RR 3 and 4 No. Appearance R1 in W.P.22241/2006 (R2 NR) R1 in W.P. 13198/2006 R1 & R2 no appearance R1 in W.P.12054/2007 RR2 and 3 NA R2 in W.P.4321/2007 R1 N.A RR2 and 3 in W.P.5655/2007 NR R1 Respondent in W.P.9904, 9905/07 Mr.V.T. Gopalan, SG and SC for M/s. T. Srinivasa Mohan for RR2 and 3 in NR W.P.5345/2007 R1 in W.P.12099/07 https://hcservices.ecourts.gov.in/hcservices/ Mr.M. Sathyanarayanan R2 in W.P.1797 of 2007 R1 NA RR1 and 3 No. Appearance R2 NR in W.P.10977/07 R1 No appearance RR2 and 3 NR W.P.10571/2007 No app. in W.P.10532/2007 MR.V. Radhakrishnan .. R2 , R1 No app. Mr.Jayesh B. Dolia for M/s. Aiyar and Dolia .. R3 in W.P.2443/2007 1, 2 & 4 NR Respondent in W.P.2433/2007 R4 in W.P.3746 and 3747 of 2007 R2 NA RR1 and 3 NR Mr. Srinath Sridevan ... R4 i W.P.11079 of 2007 R3 Tribunal RR 1 and 2 NR R4 in W.P.11068/2007 RR1to 3 NA M/s. Sethuraman .. R2 in W.P.15192/07 and 1,3, & 4 NR M/s. Ramalingam Associates .. Respondents in W.P.12090/07 M/s. V.V. Sivakumaran Chitra Narayan ... for R4 in W.P.8196/2007 R1 NA, RR2 and 3 NR Mr.S.Sethuraman and M/s. V.R. Gopalrathinam ... R2 in W.P.3895/2007 1,3, and 4 NR P. Raghunathan for M/s. T.S. Gopalan and Co ... Respondent in both W.Ps. 4820, 4821/07 MR.P.D. Audikesavalu ... R2 in W.P.10051/2007 R1 NR, Respondent in W.P.1681/2007 https://hcservices.ecourts.gov.in/hcservices/ O R D E R (Order of the Court was made by Hon'bleTheChief Justice) The constitutional validity of provisions of Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement Security Interest Act, 2002 as amended by the Enforcement of Security Interest and Recovery of Debts Laws (Amendment Act) Ordinance 2004 (Act 30 of 2004) is challenged in these writ petitions under Article 226 of the Constitution of India. 2. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred to as 'the Act') has been enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected thereto. The Act enables the banks and financial institutions to realise long-term assets, manage problems of liquidity, asset liability mis-match and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. The Act further provides for setting up asset reconstruction companies which are empowered to take possession of secured assets of the borrower including the right to transfer by way of lease, assignment or sale and realise the secured assets and take over the management of the business of the borrower. In Mardia Chemicals Limited vs. Union of India, 2004 (4) S.C.C 311, the constitutional validity of the Act, except the provisions of Sub- section (2) of Section 17of the Act, has been upheld by the Supreme Court. The findings of the Supreme Court, as summed up in paragraph-80 of the judgment, read as follows: - " 80. Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under Section 13(4) of the Act have been taken, a mechanism has been provided under Section 17 of the Act to approach the Debts Recovery Tribunal. The abovenoted provisions are for the purpose of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows: 1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under sub-section https://hcservices.ecourts.gov.in/hcservices/ (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be, must be communicated to the borrower. In connection with this conclusion we have already held a discussion in the earlier part of the judgment. The reasons so communicated shall only be for the purposes of the information/ knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under Section 17 of the Act, at that stage. 2. As already discussed earlier, on measures having been taken under sub-section (4) of Section 13 and before the date of sale/auction of the property it would be open for the borrower to file an appeal (petition) under Section 17 of the Act before the Debts Recovery Tribunal. 3. That the Tribunal in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose. 4. In view of the discussion already held in this behalf, we find that the requirement of deposit of 75% of the amount claimed before entertaining an appeal (petition) under Section 17 of the Act is an oppressive, onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down. 5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court." 3. Section 17 of the Act prior to the amendment reads as https://hcservices.ecourts.gov.in/hcservices/ follows: - SECTION 17 – Right to appeal: "(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorised officer under this Chapter, may prefer an appeal to the Debts Recovery Tribunal having jurisdiction in the matter within forty five days from the date on which measures had been taken. (2) Where an appeal is preferred by a borrower, such appeal shall not be entertained by the Debts Recovery Tribunal unless the borrower has deposited with the Debts Recovery Tribunal seventy-five per cents of the amount chaired in the notice referred to in Sub- section (2) of Section 13. Provided that the Debts Recovery Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section. (3) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder." 4. Section 17 of the Act was amended by Act 30 of 2004 in the light of the decision in Mardia Chemical's case and the amended provisions were brought into force with effect from 29.12.2004. The provisions of Section 17 of the Act, after the amendmen, read as follows: - " (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorised officer under this Chapter, (may