Petition to Set Aside Possession Notice Dismissed under SARFAESI Act: Court Emphasizes Statutory Remedies

The High Court dismissed the petition seeking to set aside a possession notice under the SARFAESI Act and restore possession of a mortgaged property. The Court emphasized the petitioner's statutory remedy under Section 17 of the Act, highlighting the need to exhaust this remedy before approaching the Court directly. The Court reiterated the importance of adhering to the rule of exhausting statutory remedies before seeking relief through writ jurisdiction, citing legal precedents. The petition was dismissed as the Court found no grounds for interference under the writ jurisdiction due to the availability of the statutory remedy.

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Issues:
Petitioner seeks to set aside possession notice under SARFAESI Act, restore possession of mortgaged property, and take back possession. Discrepancies in property description, irregular possession taking, and officer's competence raised. Whether High Court can entertain writ petition or petitioner must exhaust statutory remedy under Section 17 of the Act.

Analysis:
The petitioner requested the High Court to quash the possession notice issued by the respondent Bank under Section 13(4) of the SARFAESI Act and restore possession of the mortgaged property. The petitioner claimed to be the original owner of the property and had mortgaged it to secure a loan from the bank. The bank initiated recovery proceedings under the Act, leading to the physical possession of the property being taken by the bank. The petitioner raised concerns about discrepancies in property description, irregular possession taking, and the competence of the officer who took possession.

The High Court noted that the petitioner had a statutory alternative remedy under Section 17 of the Act, which allows for appealing before the Tribunal. The Court emphasized that issues post-Section 13(4) could be addressed through the statutory remedy, where parties could present evidence and contentions. Citing legal precedents, the Court highlighted the importance of adhering to the rule of exhausting statutory remedies before approaching the High Court directly in matters involving recovery of dues by financial institutions.

The petitioner relied on legal decisions to support the argument that the possession was not taken in accordance with the Act's requirements. However, the Court reiterated that the rule of alternative remedy must be followed strictly under the SARFAESI Act. Various judgments, including those from the Supreme Court and other High Courts, emphasized the need to exhaust statutory remedies before seeking relief through writ jurisdiction. The Court dismissed the petition, stating that no grounds for interference under the writ jurisdiction were established due to the availability of the statutory remedy under Section 17 of the Act.

In conclusion, the High Court declined to entertain the petition, emphasizing the importance of exhausting statutory remedies before approaching the Court directly. The Court clarified that it had not delved into the merits of the case, as the issues could be addressed through the statutory appeal process before the Tribunal. The judgment underscored the significance of following established legal principles regarding alternative remedies in matters involving the recovery of dues by financial institutions.

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