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2017 (6) TMI 607 - HC - Companies LawRecourse to proceedings under the SARFAESI Act - procedure for recovery of debts due to the Banks - Held that:- In the present case, the petitioners had made a representation to the respondent vide letter dated 27.10.2016, but the respondent/creditor has rejected the same under Section 13(3A) of the SARFAESI Act. The reasons for rejecting the petitioners’ representation have been communicated by the respondent vide its reply dated 17.11.2016. In the case of Mardia Chemicals (2004 (4) TMI 294 - SUPREME COURT OF INDIA) it was clarified that a borrower “may not be entitled to challenge the reasons communicated or the likely action of the secured creditor at that point of time unless his right to approach the Debt Recovery Tribunal as provided under Section 17 of the Act, matures on any measure having been taken under sub- section (4) of Section 13 of the Act”. This being the legal position, as and when the respondent takes any steps under Section 13(4) of the SARFAESI Act, the petitioners will be entitled to approach the Debt Recovery Tribunal for relief under Section 17 of the SARFAESI Act. Given the fact that the Statute lays down a step-by-step procedure for the creditor to take action thereunder and remedies have been provided to the debtor against such action, judicial prudence demands that this Court must refrain from exercising its jurisdiction under Article 226 of the Constitution of India. Any view to the contrary shall derail the procedure contemplated under the Statute and seriously impact the rights of financial institutions like the respondent herein, to recover its dues. Thus the plea of the petitioners that the respondent is amenable to writ jurisdiction of the High Court is repelled. It is held that the present petition is not maintainable against the respondent under Article 226 of the Constitution of India as it is neither a “State”, or “any other person or authority” and nor is it discharging any public or statutory duty. If they have a grievance against the respondent, then the petitioners must seek recourse to proceedings under the SARFAESI Act, which provides for a special procedure for recovery of debts due to the Banks and financial institutions, to be moved at the appropriate stage.
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