Section 14 jurisdiction under SARFAESI depends on financial institution status; writ of prohibition may restrain unauthorised proceedings.

A person can invoke Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 only if it satisfies the statutory definition of a financial institution and secured creditor on the relevant date. Applying the asset-threshold notification, the respondent's assets were below the prescribed limit, so it was not shown to be a financial institution and could not maintain the Section 14 proceeding. A writ of prohibition was considered maintainable where the challenge went to the very competence to proceed, and the availability of a later Section 17 remedy did not bar relief. The alternate-remedy and retrospectivity objections were rejected.

---

---

Issues: (i) whether the respondent was a financial institution and consequently a secured creditor entitled to invoke Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (ii) whether a writ of prohibition could be issued to restrain the Chief Metropolitan Magistrate from proceeding with the Section 14 application notwithstanding the plea of alternate remedy.

Issue (i): whether the respondent was a financial institution and consequently a secured creditor entitled to invoke Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis: The statutory scheme requires a secured creditor to be a financial institution within the meaning of Section 2(1)(m)(iv). The relevant notification prescribing the asset threshold was applied to determine whether the respondent satisfied that description on the date it sought to invoke Section 14. On the material placed, the respondent's asset size was below the prescribed threshold, so it did not answer the statutory description of a financial institution for the purposes of the Act.

Conclusion: The respondent was not shown to be a financial institution and therefore could not be treated as a secured creditor entitled to invoke Section 14.

Issue (ii): whether a writ of prohibition could be issued to restrain the Chief Metropolitan Magistrate from proceeding with the Section 14 application notwithstanding the plea of alternate remedy.

Analysis: Where jurisdiction is absent on the face of the record, a writ of prohibition is maintainable to prevent an authority from proceeding further. The availability of a later remedy under Section 17 did not defeat the writ petition because the challenge went to the very competence of the respondent to maintain the Section 14 proceeding. The contention based on retrospectivity was rejected because the respondent's status had to be examined as on the date it invoked jurisdiction.

Conclusion: A writ of prohibition was warranted and the alternate-remedy objection was rejected.

Final Conclusion: The petition succeeded because the Section 14 proceeding was initiated by an entity lacking the statutory competence to invoke that remedy, and the Magistrate was restrained from continuing with the matter.

Ratio Decidendi: A writ of prohibition lies where the very jurisdiction to institute or proceed under Section 14 is absent, and only a person satisfying the statutory definition of financial institution and secured creditor on the relevant date can invoke that remedy.

---