2010 (2) TMI 1250

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.... provision, the present appeal has been preferred against the said order. 2. Learned counsel appearing on behalf of the appellantpetitioner submitted that while taking action u/S.14 as the District Magistrate had not issued any notice to the petitioner and passed the order straightaway for taking possession of petitioner's property, such action being violative of principles of natural justice the power vested u/S.14 of Securitisation Act is violative of Art.14 of the Constitution. 3. It was next contended that the authorized officer being a ministerial staff cannot direct the District Magistrate, an officer of the higher rank, to assist a subordinate officer in taking action under the provisions of Securitisation Act and such gran....

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....as enacted as evident from the Statement of Objects and Reasons of the said Act. Under the aforesaid Act, banks and financial institutions have been empowered to enforce their security interests under subsection (2) to Sec.13 where the borrower, under a liability to a secured creditor under the agreement, makes any default in repayment of the secured debt classified by the secured creditor as a nonperforming asset, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor. Under subsection (3) to Sec.13 secured creditor shall give in such notice the details of amount payable by the borrower and the secured assets intended to be enforced in the event of nonpayment of secur....

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....Page 3 of 5 Created On Thu Nov 30 12:35:26 IST 2017 LPA/165/2010 4/5 ORDER dated 03.02.2010 held that a secured creditor cannot take possession of the secured asset except in accordance with the prescribed procedure. For taking such possession, procedure is prescribed u/Sec.14, in accordance with which the secured creditor has to request the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, to assist the secured creditor in taking possession of the secured asset. In such case, the Chief Metropolitan Magistrate or the District Magistrate, as the case may be, takes possession of the secured asset and documents on behalf of the secured creditor and hands over the same. 7. Any action on the part of the secured cre....