Kanaiyalal Lalchand Sachdev & Ors vs State Of Maharashtra & Ors

3. Briefly stated, the facts, material for adjudication of the present appeals, may be stated thus:

4. On default of re-payment of loan amount, respondent No. 3 issued a notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002 on 18th November, 2006. On 12th February, 2007, the officers of respondent No. 3 dispossessed the appellants of one of the secured properties viz. T-125, CTS, No. 1729. Being aggrieved, the appellants filed a writ petition being CRL. W.P. No.286 of 2007 before the Bombay High Court, inter-alia, contending that the notice issued by respondent No. 3 was illegal, no action could be taken in pursuance thereof, and if at all, the respondent wanted to take any action, it was required to approach the Chief Metropolitan Magistrate under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the Act").

6. Thereafter, on 11th April, 2007 respondent No. 3 issued to the appellants a notice under Section 13(2) of the Act. The appellants replied to the said notice on 23rd May, 2007. Vide letter dated 29th May, 2007, respondent No. 3, communicated its reasons for not accepting the reply. Subsequently, respondent No. 3 issued a public notice in newspapers, informing the appellants of the issuance of notice under Section 13(2) of the Act.

8. Vide notice dated 27th February, 2009, the Assistant Registrar, directed the appellants to hand over the possession of the mortgaged properties to respondent No. 3 within 15 days from the receipt of the said notice. At this juncture, it would be expedient to extract the relevant portions of the said notice:

9. Being aggrieved by the said notice, the appellants herein again approached the High Court. As afore-stated, the High Court dismissed 4 the said writ petition, vide order dated 28th April, 2009, on the ground that an alternative remedy was available to the appellants under Section 17 of the Act. Nevertheless, the High Court directed the respondents to maintain status quo in the matter for a period of 10 weeks from the date of its order, so as to enable the appellants to approach the Debts Recovery Tribunal (for short the "DRT") under Section 17 of the Act.

10. Thereafter, the appellants filed Criminal Application No. 178 of 2009 in W.P. No. 707 of 2009 seeking an extension of the status quo period granted vide order dated 28th April, 2009. As afore-stated, the High Court rejected the said application filed by the appellants.

36. The intention of the legislature is, therefore, clear that while the banks and financial institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee. .............................................................................

39. We are unable to agree with or accept the submissions made on behalf of the appellants that the DRT had no jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated under Section 13(4) of the Act. On the other hand, the law is otherwise and it contemplates that the action taken by a secured creditor in terms of Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT."

(Emphasis supplied by us)

(d) person invoking the jurisdiction is guilty of unexplained delay and laches;

(e) ex facie barred by any laws of limitation;

(f) grant of relief is against public policy or barred by any valid law; and host of other factors."

23. For the foregoing reasons, the impugned judgments cannot be flawed, warranting interference by this Court. Accordingly, the appeals, being devoid of any merit, are dismissed with costs, quantified at `20,000/-.

1 FEBRUARY 7, 2011.

ARS 1