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of <h1>Court upholds SARFAESI Act notices, allows parallel proceedings, rejects double jeopardy claims.</h1> The court dismissed all writ petitions challenging demand notices under Section 13(2) of the SARFAESI Act, deeming them premature and not maintainable. It ... Enforcement of security interest Issues Involved:1. Validity of demand notices under Section 13(2) of the SARFAESI Act.2. Competence of LIC Housing Finance Ltd. and Ind. Bank Housing Ltd. under the SARFAESI Act.3. Double jeopardy and parallel proceedings.4. Doctrine of election and estoppel.5. Maintainability of writ petitions against notices under Section 13(2) of the SARFAESI Act.6. Period of limitation for initiating actions under the SARFAESI Act.Detailed Analysis:1. Validity of Demand Notices under Section 13(2) of the SARFAESI Act:The petitioners challenged the demand notices issued by financial institutions under Section 13(2) of the SARFAESI Act. The court noted that these notices were in the nature of show-cause notices, requesting the borrower to discharge liabilities within sixty days, thereby giving an opportunity to explain and satisfy the creditor. The court held that the remedy available for the parties, if any action is taken under Section 13(4), is to prefer appeals before the Debts Recovery Tribunal as per Section 17 of the SARFAESI Act. Therefore, the writ petitions challenging the notices under Section 13(2) were deemed premature and not maintainable.2. Competence of LIC Housing Finance Ltd. and Ind. Bank Housing Ltd. under the SARFAESI Act:The petitioners contended that LIC Housing Finance Ltd. and Ind. Bank Housing Ltd. were not notified financial institutions under the SARFAESI Act. However, it was conceded during the proceedings that both institutions were indeed notified as financial institutions under the SARFAESI Act. Therefore, they were competent to issue notices under Section 13(2) of the SARFAESI Act.3. Double Jeopardy and Parallel Proceedings:The petitioners argued that the financial institutions could not proceed under the SARFAESI Act while civil suits for recovery were already pending, as it would amount to double jeopardy. The court, however, held that the remedies under the SARFAESI Act are in addition to those available under existing laws, as per Section 37 of the SARFAESI Act. It was concluded that there is no bar for initiating proceedings under Section 13(2) of the SARFAESI Act despite pending civil suits, as both remedies are not mutually exclusive.4. Doctrine of Election and Estoppel:The petitioners claimed that the financial institutions should elect between the SARFAESI Act and civil suits, invoking the doctrine of election and estoppel. The court referred to the Supreme Court's ruling in Andhra Pradesh State Financial Corpn. v. Gar Re-rolling Mills, which stated that the doctrine of election does not apply when the scope of the two remedies is essentially different. The court concluded that the financial institutions could pursue remedies under both the SARFAESI Act and civil suits, as the remedies are not barred by statute.5. Maintainability of Writ Petitions Against Notices under Section 13(2) of the SARFAESI Act:The court held that writ petitions against notices under Section 13(2) of the SARFAESI Act are not maintainable, as these notices are preliminary and provide an opportunity for the borrower to respond. The appropriate remedy for the petitioners, if aggrieved by actions under Section 13(4), is to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act.6. Period of Limitation for Initiating Actions under the SARFAESI Act:The petitioners in some cases argued that the notices were issued after the period of limitation had expired. The court clarified that under Section 36 of the SARFAESI Act, the period of limitation for enforcing a secured debt is twelve years from the date the money becomes due. In the cases at hand, the actions were initiated within the limitation period, and therefore, the claims were not time-barred.Conclusion:All writ petitions were dismissed as meritless, with the court emphasizing that the actions under Section 13(2) of the SARFAESI Act were valid and within the legal framework. The court also highlighted that the financial institutions were competent to invoke the SARFAESI Act and that the petitioners should seek remedies through the Debts Recovery Tribunal if aggrieved by actions under Section 13(4). The court dismissed all connected petitions and vacated interim orders, ordering each party to bear their own costs.
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