TaxTMI 
TaxTMI 
2025 (3) TMI 735
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....upama Pawar, Assistant Government Pleader for Respondent No.4. JUDGMENT: Per A.S. Chandurkar, J. 1. Rule. Rule made returnable forthwith and heard learned counsel for the parties. The petitioner, a Partnership Firm, registered under the Indian Partnership Act, 1932 through its Partner has filed this writ petition under Articles 226 and 227 of the Constitution of India raising a challenge to the initiation of proceedings by the 3rd respondent - M/s. M.J. Shah Capital Pvt. Ltd., a Company incorporated under the Companies Act, 2013 by invoking the provisions of Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "the Act of 2002"). The petitioner seeks issuance....
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....ion. 3. Mr. Prathamesh Kamat, learned counsel for the petitioner- Partnership Firm referred to various provisions of the Act of 2002 and especially Section 2(1)(zd) which defines "secured creditor", Section 2(1)(m) that defines "financial institution" as well as Section 14 of the Act of 2002 wherein such secured creditor can invoke provisions of Section 14 of the Act of 2002. It was submitted that for a Non-Banking Financial Company to be considered as a "financial institution" as per Notification dated 24th February 2020, it had to have assets worth Rs.100 crores and above, secured debts worth Rs.50 lakhs and above which figure was modified by Notification dated 12th February 2021 reducing that amount to Rs.20 lakhs and above. Referring t....
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....-Assessing Authority and Ors., 2023 SCC OnLine SC 95. It was thus prayed that a Writ of Prohibition as prayed for be issued restraining the Chief Metropolitan Magistrate from entertaining the application under Section 14 of the Act of 2002. 4. On the other hand Mr. Ashok M. Saraogi, learned counsel appearing for the 3rd respondent referred to the affidavit-in-reply as filed and opposed the writ petition. At the outset, he submitted that the writ petition was premature inasmuch as no order was passed by the Chief Metropolitan Magistrate on the application filed under Section 14 of the Act of 2002. As and when such order was passed, it would be open for the Partnership Firm to avail its remedies under Section 17 of the Act of 2002. The Partn....
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.... length and with their assistance we have also perused the documents on record. The Partnership Firm seeks issuance of a Writ of Prohibition on the premise that the 3rd respondent is not a "financial institution" as contemplated by Section 2(1)(m)(iv) of the Act of 2002 and hence it is not competent to maintain an application under Section 14 of the Act of 2002. It is urged that only a "secured creditor" as defined by Section 2(1)(zd) of the Act of 2002 can seek assistance of the Chief Metropolitan Magistrate in taking possession of the secured asset. To consider this aspect a reference may be made to the judgment of the Division Bench in S.C. Prashar and Anr. (supra) wherein it has been held that a plea with regard to lack of jurisdiction ....
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.... 6. In this regard, it would be necessary to refer to the statutory scheme under the Act of 2002. A "secured creditor" is defined under Section 2(1)(zd)(i) of the Act of 2002 to mean a "financial institution" holding any right, title or interest upon any tangible or intangible asset. Section 2(1)(m) of the Act of 2002 defines a 'financial institution' and sub-clause (iv) thereof being material is reproduced hereunder :- 2(1)(m)(iv) Any other institution or non-banking financial company, as defined in clause (f) of Section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934), which the Central Government may, by notification, specify as financial institution for the purposes of this Act". Notification dated 24th February 2020 has been....
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....to invoke the provisions of Section 14 of the Act of 2002. 7. It was urged on behalf of the 3rd respondent that since the loan agreement between the parties was entered into on 10th October 2017, the Notification dated 24th February 2020 cannot be given any retrospective effect so as to prevent the 3rd respondent from invoking the provisions of the Act of 2002. We do not find that there is any question of the Notification dated 24th February 2020 being given any retrospective effect. What is required to be seen is whether the 3rd respondent qualifies as a "financial institution" for the purposes of the Act of 2002 on the date when it invoked the jurisdiction of the Court of the Chief Metropolitan Magistrate on 29th April 2024 seeking adjud....