TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether a borrower can maintain an application under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 at the stage of possession notice under rule 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002, or only after actual physical possession is taken. (ii) Whether the expression "possession" in section 13(4)(a) includes symbolic possession and whether the measures under section 13(4) are complete at the stage of possession notice.
Issue (i): Whether a borrower can maintain an application under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 at the stage of possession notice under rule 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002, or only after actual physical possession is taken.
Analysis: The statutory scheme was read to show that the right under section 17 accrues once a measure under section 13(4) is taken. The notice under section 13(2) and the communication of reasons under section 13(3-A) do not by themselves confer the right to approach the Tribunal. The possession notice under rule 8(1) and publication under rule 8(2) were treated as a recognized mode of taking possession within the scheme of section 13(4)(a), with rule 8(3) providing an alternative mode of actual possession. The Court held that a borrower need not wait until physical dispossession if possession has been taken in the manner contemplated by rule 8(1) and 8(2).
Conclusion: The borrower can approach the Debts Recovery Tribunal under section 17 at the stage of possession notice under rule 8(1) and 8(2); the contrary view of the Full Bench was rejected.
Issue (ii): Whether the expression "possession" in section 13(4)(a) includes symbolic possession and whether the measures under section 13(4) are complete at the stage of possession notice.
Analysis: Reading section 13(4) with rule 8 and the connected provisions, the Court held that symbolic possession is a legally recognised mode of possession under the Rules. Section 13(6) operates after possession is taken, and the sale machinery under rule 8(5) to 8(8) also becomes operative once possession notice is issued and published. Section 14 and section 15 were treated as separate mechanisms, not as controlling the meaning of section 13(4)(a). The Court therefore concluded that the dichotomy between symbolic and actual possession cannot be used to postpone the statutory remedy under section 17.
Conclusion: Possession under section 13(4)(a) includes symbolic possession under rule 8(1) and 8(2), and the remedy under section 17 is available at that stage.
Final Conclusion: The appeals were allowed, the Full Bench view was set aside, and the matter was sent back for decision of each case in accordance with the law declared.
Ratio Decidendi: A possession notice under rule 8(1) and its publication under rule 8(2) constitute a measure taken under section 13(4) of the SARFAESI Act, so the borrower's remedy under section 17 becomes available at that stage without waiting for actual physical possession.
TaxTMI 
