TMI Blog2011 (2) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... Ranganadhan, A.V. Rangam, Sushil Karanjakar, Sanjay Kharde, Ms. Asha Gopalan Nair for the Appearing Parties . JUDGMENT D.K. Jain, J. - Leave granted. 2. Challenge in these appeals, by special leave, is to the judgments and orders dated 28-4-2009 and 1-7-2009 delivered by the High Court of Bombay in W.P. No. 707 of 2009, and Criminal Application No. 178 of 2009 in W.P. No. 707 of 2009, respectively whereby it has dismissed the writ petition filed by the appellants herein, and also declined to extend the status quo order granted by it to them. 3. Briefly stated, the facts, material for adjudication of the present appeals, may be stated thus : Respondent No. 3, viz. the State Bank of India had advanced a loan of 4,50,00,000 to appellant No. 6 on an equitable mortgage by deposit of the title deeds of certain properties, subject-matter of these appeals, on 6-2-2006. Appellant Nos. 1 to 5 and one Mr. Lalchand Sachdeo stood as personal guarantors to the said loan. 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, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Whereas, the Chief Metropolitan Magistrate, Esplanade, Mumbai has passed the following order on 3-2-2009 on the application filed before him by State Bank of India, Mazda Complex, Parsi Agari Lane, Thana (W) 400601 through its Authorized Officer Fazlur Rehman Sheikh. ORDER The Application is allowed. Asstt. Registrar, Mr. P.A. Tendolkar, Kurla Centre of Court after issuing notice of taking possession of the secured assets. ................... .......................... ..........................." It is manifest from a bare perusal of the said notice that the order passed by the Magistrate dated 3-2-2009 was referred to by the Assistant Registrar in his notice. 9. Being aggrieved by the said notice, the appellants herein again approached the High Court. As aforestated, the High Court dismissed the said writ petition, vide order dated 28-4-2009, 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 ( DRT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontained in section 69 or 69A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the court s intervention, by such creditor in accordance with the provisions of the Act. Section 13(2) of the Act provides that when a borrower, who is under a liability to a secured creditor, makes any default in repayment of secured debt, and his account in respect of such debt is classified as non-performing asset, then the secured creditor may require the borrower, by notice in writing, to discharge his liabilities within sixty days from the date of the notice, failing which the secured creditor shall be entitled to exercise all or any of the rights given in section 13(4) of the Act. Section 13(3) of the Act provides that the notice under section 13(2) of the Act shall give details of the amount payable by the borrower as also the details of the secured assets intended to be enforced by the bank. Section 13(3A) of the Act was inserted by Act 30 of 2004 after the decision of this Court in Mardia Chemicals Ltd. s case ( supra ), and provides for a last opportunity for the borrower to make a representation to the secured cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 110. Therefore, it follows that a secured creditor may, in order to enforce his rights under section 13(4), in particular section 13(4)( a ), may take recourse to section 14 of the Act. 17. Section 17 of the Act which provides for an appeal to the DRT, reads as follows : "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 make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken : Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower. Explanation. For the removal of doubts it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree.................................. 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] 20. We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under section 14 of the Act constitutes an action taken after the stage of section 13(4), and therefore, the same would fall within the ambit of section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under section 13(4) of the Act, by providing for an appeal before the DRT. 21. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under section 17 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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