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2017 (1) TMI 1693 - HC - Indian LawsConstitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Permission to secured creditor to bid for the secured assets - vires of Section 13(5A) is under challenge in this writ proceedings on the ground that it is violative of Articles 300A and 21 of the Constitution of India - whether the power given to the secured creditor under Section 13(5A) of the Act is arbitrary, irrational and without any nexus to the object? HELD THAT:- In terms of Rule 8(5) of the Rules, the authorised officer of the secured creditor is to get the secured assets valued by an approved valuer and accordingly fix the reserve price of the property. The secured assets could be brought for sale only after fixing the reserve price as above. Rule 8(6) of the Rules provides that sufficient public notice be given regarding the sale of the secured assets, in the manner as stated therein. Therefore, the interest of the debtor is adequately guarded and protected. In terms of Section 13(5A) of the Act, the secured creditor is entitled to participate in the bid, only in the absence of any bidders for a value equal to or above the reserve price and the sale is postponed due to that contingency - It is further to be noted that the sale of the property as above is amenable to an appeal under Section 17 of the Act before the Debt Recovery Tribunal. The only conclusion that could be arrived at is that the rights of the mortgagor/defaulter has been adequately safeguarded and protected under the Act. Right is given to the secured creditor to bid for the secured assets only on the arising of a particular contingency, viz., adjournment of sale for want of a bid at or above the reserve price; in which event also, the secured creditor could bid the property only at the reserve price and not below. There is no reason to conclude that the provision is arbitrary, irrational or in any manner violative of the fundamental rights of the appellant/petitioner. The challenge on the vires of Section 13(5A) fails and is turned down. Apart from the challenge on the constitutional validity of the Section, no other contentions are urged. Appeal dismissed.
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