Court upholds SARFAESI Act Section 14, rejects challenge to CMM order, deems writ petition not maintainable

The court upheld the constitutional validity of Section 14 of the SARFAESI Act, rejected the challenge to the legality of the CMM's order, and deemed the writ petition not maintainable due to the availability of an alternative remedy under Section 17(1) of the SARFAESI Act. The court directed parties to maintain the status quo until the petitioner's appeal under Section 17 is adjudicated by the DRT, granting liberty to respondent No.1 to seek vacation or modification of the interim order if needed. The petition was disposed of accordingly.

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Issues Involved:
1. Constitutional validity of Section 14 of the SARFAESI Act.
2. Legality of the order dated 06.07.2015 passed by the Chief Metropolitan Magistrate (CMM) under Section 14 of the SARFAESI Act.
3. Maintainability of the writ petition in the presence of an alternative remedy.

Detailed Analysis:

1. Constitutional Validity of Section 14 of the SARFAESI Act:

The petitioner challenged the constitutional validity of Section 14 of the SARFAESI Act, claiming it violated Articles 14, 21, and 300A of the Constitution of India. The court referenced the Supreme Court judgment in *Mardia Chemicals Ltd. vs. Union of India* (2004), which upheld the constitutional validity of the SARFAESI Act, except for Section 17(2). The court concluded that the constitutional validity of Section 14 had been upheld by the Supreme Court, and thus, the petitioner's contention was not accepted.

2. Legality of the Order Dated 06.07.2015 by CMM:

The petitioner argued that the order passed by the CMM was illegal as no notice was issued to the petitioner before passing the order. The court referred to the Supreme Court judgment in *Standard Chartered Bank v. V. Noble Kumar* (2013), which clarified that the CMM is only required to examine the factual correctness of the assertions made in the affidavit accompanying the application under Section 14. The CMM is not obligated to issue notices to the borrower or any other party before passing the order. The court also noted that the petitioner's remedy against the order of the CMM lies under Section 17(1) of the SARFAESI Act before the Debt Recovery Tribunal (DRT).

3. Maintainability of the Writ Petition:

The respondents argued that the writ petition was not maintainable due to the availability of an alternative remedy under Section 17(1) of the SARFAESI Act. The court highlighted that the petitioner had already filed an appeal under Section 17 of the SARFAESI Act before the DRT, which was pending. The court cited the Supreme Court judgments in *United Bank of India vs. Satyawati Tondon* (2010) and *Kanaiyalal Lalchand Sachdev v. State of Maharashtra* (2011), which emphasized that the remedy under Section 17(1) is both expeditious and effective. Hence, the writ petition was not maintainable.

Conclusion:

The court found no merit in the petitioner's challenge to the constitutional validity of Section 14 of the SARFAESI Act and the legality of the CMM's order dated 06.07.2015. The court directed the parties to maintain the status quo as on 04.08.2015 until the adjudication of the petitioner's appeal under Section 17 of the SARFAESI Act by the DRT. The court also granted liberty to respondent No.1 to approach the DRT for vacation or modification of the interim order if desired. The petition was disposed of with these directions.

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