TaxTMI 
TaxTMI 
TaxTMI 
2011 (2) TMI 1277
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtgage by deposit of the title deeds of certain properties, subject-matter of these appeals, on 6-2-2006. Appellant Nos. 1 to 5 and one Mr. Lalchand Sachdeo stood as personal guarantors to the said loan. 4. On default of re-payment of loan amount, respondent No. 3 issued a notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Second) Ordinance, 2002 on 18-11-2006. On 12-2-2007, the officers of respondent No. 3 dispossessed the appellants of one of the secured properties viz. T-125, CTS, No. 1729. Being aggrieved, the appellants filed a writ petition being CRL. W.P. No. 286 of 2007 before the Bombay High Court, inter alia, contending that the notice issued by respondent No. 3 was illegal, no action could be taken in pursuance thereof, and if at all, the respondent wanted to take any action, it was required to approach the Chief Metropolitan Magistrate under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the Act'). 5. Before the High Court, respondent No. 3 offered to withdraw the notice dated 18-11-2006 without prejudice to the rights and contentions adv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d writ petition, vide order dated 28-4-2009, on the ground that an alternative remedy was available to the appellants under section 17 of the Act. Nevertheless, the High Court directed the respondents to maintain status quo in the matter for a period of 10 weeks from the date of its order, so as to enable the appellants to approach the Debts Recovery Tribunal ('DRT') under section 17 of the Act. 10. Thereafter, the appellants filed Criminal Application No. 178 of 2009 in W.P. No. 707 of 2009 seeking an extension of the status quo period granted vide order dated 28-4-2009. As aforestated, the High Court rejected the said application filed by the appellants. 11. Hence, the present appeals against both the said orders. 12. Ms. Kranti Anand, learned counsel appearing on behalf of the appellants, while assailing the impugned orders, strenuously urged that apart from the fact that the notice issued by the Assistant Registrar was vague, it was never served on the appellants. In fact, appellants received a copy of the order of the Magistrate during the proceedings before the High Court, pleaded the learned counsel. Learned counsel also urged that the notice issued by the Assistant Regis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....yable by the borrower as also the details of the secured assets intended to be enforced by the bank. Section 13(3A) of the Act was inserted by Act 30 of 2004 after the decision of this Court in Mardia Chemicals Ltd.'s case (supra), and provides for a last opportunity for the borrower to make a representation to the secured creditor against the classification of his account as a non-performing asset. The secured creditor is required to consider the representation of the borrowers, and if the secured creditor comes to the conclusion that the representation is not tenable or acceptable, then he must communicate, within one week of the receipt of the communication by the borrower, the reasons for rejecting the same. Section 13(4) of the Act provides that if the borrower fails to discharge his liability within the period specified in section 13(2), then the secured creditor, may take recourse to any of the following actions, to recover his debt, namely- "(a )take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; (b )take over the management of the business of the borrower including the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17. (2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder." 18. The 2002 Rules, enacted under sub-section (1) and clause (b) of sub-section (2) of section 38, read with sub-sections (4), (10) and (12) of section 13 of the Act, set down the procedure for enforcing a security interest. Rule 4 of the 2002 Rules deals with the possession of movable assets, whereas Rule 8 deals with the possession of immovable assets. It is manifest that Rule 4 has no application to the facts of the instant case, as contended by the learned counsel for the State. 19. In Authorised Officer, Indian Overseas Bank v. Ashok Saw Mill [2009] 94 SCL....