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TMI Blog2025 (5) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as "the SARFAESI Act") and in view of violation of the constitutional and statutory rights, the petitioners have approached this Court. 3. The facts as arises from the present petition are that the petitioner no.1 had taken a loan for purchasing of school buses sometime in the year 2015 and the petitioners no.2 to 4 were the guarantors to the said loan. It was argued that there was a default in payment of the outstanding amount as such, the loan was classified as Non-Performing Asset (NPA) and the Bank issued a notice on 29.10.2020 under Section 13(2) of the SARFAESI Act. Subsequently, the respondent no.3-Bank, assigned its rights to the respondent no.2, which is a Assets Reconstruction Company. It also appears from the record that the notices under Section 13(4) were also issued and thereafter, an application was filed under Section 14 of the SARFAESI Act before the Additional District Magistrate (ADM), Gautambudh Nagar for taking possession of the property. 4. The ADM, in terms of the order dated 21.04.2023 (Annexure-1 to the writ petition), directed the respondent no.2 for taking possession of the property in question. It was also noticed in the said order that in case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Article 300A of the Constitution of India stood violated. Reliance was placed on the judgment of the Hon'ble Supreme Court in the case of ICICI Bank Ltd. Vs Prakash Kaur and others; (2007) 2 SCC 711. 7. In the light of the said submissions, this Court had called for a report from the police authorities through the Standing Counsel and from the ADM, and this Court had appointed a Court Commissioner in view of the allegations that even the essentials such as medicines, books etc. were lying in lock and were not accessible to the petitioners. 8. In terms of the above said directions, the Court Commissioner has submitted his report, the learned Standing Counsel has forwarded the instructions received from the police authorities and an affidavit has also been filed by ADM. A short counter affidavit has been filed on behalf of the respondent no.2. On the basis of the short counter affidavit, it has been argued that the petitioners as guarantors were liable to pay the outstanding loan amount. The petitioner had earlier approached the DRT by filing an securitisation appeal against the order passed under Section 14, as such, the present writ petition is not maintainable in view of the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein, the proceedings were conducted. It is further argued that the property consists of three stories house, on which, ground floor was taken in possession but in view of the request made by the occupant, in view of the Board Examination of the child, two days time were granted and the possession of the first floor was not taken. The said Officer, who has sworn the affidavit, also states that he was not present at the site when the possession was taken. It is also stated that in view of the Board Examination, half of the first floor portion was not taken. 12. The report of the Court Commissioner has been filed wherein after a visit, he reported that goods belonging to the petitioners are lying inside the premises when the Court Commissioner visited the premises. At the time of inspection, some goods were taken by the petitioners for their use. It is stated that lock with seal of the respondent no.2 were found on the locks and some locks were not sealed. It is stated that in terms of the direction issued, the necessary medicines and medical equipments belonging to the father of the petitioner and some medicines lying on the first floor were handed over to the petitioner and some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the form given in Appendix V to the Rules i.e. in accordance with Rule 9(6) of the Security Interest (Enforcement) Rules, 2002. 110.3. In accordance with the unamended Section 13(8) of the SARFAESI Act, the right of the borrower to redeem the secured asset was available till the sale or transfer of such secured asset. In other words, the borrower's right of redemption did not stand terminated on the date of the auction-sale of the secured asset itself and remained alive till the transfer was completed in the favour of the auction-purchaser, by registration of the sale certificate and delivery of possession of the secured asset. However, the amended provisions of Section 13(8) of the SARFAESI Act, make it clear that the right of the borrower to redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the 2002 Rules. In effect, the right of redemption available to the borrower under the present statutory regime is drastically curtailed and would be available only till the date of publication of the notice under Rule 9(1) of the 2002 Rules and not till the completion of the sale or transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in taking possession of secured asset.- (1) Where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured assets is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured assets, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him- (a) take possession of such asset and documents relating thereto; and (b) forward such asset and documents to the secured creditor: Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that- (i) the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application; (ii) the borrower has created sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of commencement of this Act. (1A) The District Magistrate or the Chief Metropolitan Magistrate may authorise any officer subordinate to him,- (i) to take possession of such assets and documents relating thereto; and (ii) to forward such assets and documents to the secured creditor. (2) For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary. (3) No act of the Chief Metropolitan Magistrate or the District Magistrate or any officer authorised by the Chief Metropolitan Magistrate or District Magistrate done in pursuance of this section shall be called in question in any court or before any authority." 17. On a plain reading of the above said two provisions, it is clear that Section 14 empowers the District Magistrate or the Chief Metropolitan Magistrate to take possession of the property concerned. Section 14(1-A) further empowers the District Magistrate or the Chief Metropolitan Magistrate to "authorized any Officer subordinate to him" to take possession of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.1, thus, the intent of the order dated 21.04.2023 of giving prior notice so that the goods can be removed well in time, was also not observed. It is also to be noticed that the directions given by the DRT in its order dated 12.05.2023 directing the ADM to issue at least 15 days prior notice before taking possession have also not observed in the present case. 22. In view of the infirmities as noticed above, clearly there is a infraction of the rights guaranteed under Article 300A of the Constitution of India, the manner of taking the possession is not in accordance with the mandate of Section 14 (1-A) of the SARFAESI Act and taking of possession of movable assets was without any authority of law, thus, I have no hesitation in holding that the manner in which the possession was taken, was contrary to law. 23. As regards the submission of the Counsel for the respondents that a writ would not lie as it is not a "State" within the meaning of Article 12 of the Constitution of India, the said argument merits rejection for the sole reason that in the present case, the possession of the immovable and the movable assets have been taken by the Government Authorities and thus a writ would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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