Case: Rama Steel Industries Vs. Union of India

(1) THE petitioners are the defaulting debtors of respondent No.The petitioners had mortgaged immovable properties to respondent No.Respondent No. 2 started proceedings under section 101 of the MaharashtraSocieties Act, 1960 for recovery of Rs.3, during the pendency of these proceedings, respondent No.issued a notice of demand under section 13 (2) of the securitisation and Reconstruction of Financial Assets and Enforcement of security Interest Act, 2002 (for short, hereinafter referred to as "the securitisation Act"), respondent No.took physical possession of the securedTHE petitioners preferred an appeal, which was dismissed by the Debts recovery Tribunal onThe petitioners appealed to the Debts Recovery appellate Tribunal. During the pendency of the proceedings before the Debts recovery Appellate Tribunal, the Apex Court decided Greater BombayBank Ltd. vs. M/s United Yam Tex. Pvt. Ltd. and ors. , 2007 (3) Mh. L. J. (SC) 434 = 2007 (5) SCALE 366  , and M/s Transcore vs. Union of India and anr. , 2006 (12)SCALE 585.   The Debts Recovery Appellate Tribunal, however, dismissed the petitioners appeal onleaving to the petitioners liberty to argue before the debts Recovery Tribunal the question of Banks right to pursue parallelTHE petitioners have, therefore, rushed to this Court challenging the constitutional validity of Notification datedissued in exercise of powers under section 2 (1) (c) (v) of the Securitisation Act and consequently the correctness of the judgment datedof the Debts Recovery AppellateTHE challenge to the validity of the Securitisation Act before the supreme Court was negatived onThe Supreme Court struck down only(2) of section 17 of the Securitisation Act as unconstitutional. The remedy of an appeal before the Debts Recovery Tribunal under section 17 of the Securitisation Act is available to a defaulting debtor.

Court's reasoning:
(21) TO sum up, this attempt of the petitioner to evade recovery of dues by action under the Securitisation Act must, therefore, fail, since the contentions raised have absolutely no force.