Case Laws-SARFAESI-High Courts

High Court directs Collector/ District Magistrate to conclude the proceeding under Section 14 of the SARFAESI Act, 2002 within 30 days from the next date fixed – Tata Capital Housing Finance Ltd. Vs. State of Chhattisgarh and Ors. – Chhattisgarh High Court

The procedure under Section 14 of the SARFAESI Act, 2002 was commenced in the month of January, 2023. However, despite the fact that from January, 2023 though several months period has elapsed, the proceeding under Section 14 of the SARFAESI Act has not been concluded by Collector/ District Magistrate.

High Court directs Collector/ District Magistrate to conclude the proceeding under Section 14 of the SARFAESI Act, 2002 within 30 days from the next date fixed – Tata Capital Housing Finance Ltd. Vs. State of Chhattisgarh and Ors. – Chhattisgarh High Court Read Post »

Can the District Magistrate issue a notice to the Borrower for disposing of an application u/s 14 of SARFAESI Act, 2002, filed by a Bank – ICICI Home Finance Company Ltd. Vs. State of Chhattisgarh and Ors. – Chhattisgarh High Court

In this case, the Bank an application under Section 14 of the SARFAESI Act, 2002 before District Magistrate. District Magistrate issued a notice to borrower. The Bank filed writ petition seeking a direction towards the District Magistrate to withdraw the decision of issuing the notice to the borrower and to proceed in accordance with Section 14 of the SARFAESI Act, 2002, assisting in providing rightful possession of the mortgaged property to the petitioner bank within the stipulated period of 30 days as prescribed under the Act of 2002.

Can the District Magistrate issue a notice to the Borrower for disposing of an application u/s 14 of SARFAESI Act, 2002, filed by a Bank – ICICI Home Finance Company Ltd. Vs. State of Chhattisgarh and Ors. – Chhattisgarh High Court Read Post »

A finding by Wilful Defaulter Committee (WDC) should not simply rely on a Transaction Audit Report (TAR), which unacceptable by the NCLT? – Ankit Bhuwalka Erstwhile Director of Bhuwalka Steel Industries Ltd. Vs. IDBI Bank Ltd. and Anr. – Bombay High Court

The Hon’ble Bombay High Court held that:

(i) It is safe to accept that the basis of issuance of the SCN was primarily the findings in the Transaction Audit Report (TAR), which were observed by the NCLT to be mere assumptions. Considering the grave consequences that follow a finding by the Wilful Defaulter Committee (WDC), the degree of proof required and expected to have been relied upon by the WDC should be much higher and not simply based on a TAR which itself was unacceptable to the NCLT.

(ii) Even if the Petitioner is presumed to have access to documents in the proceedings before the NCLT, he is justified in seeking documents in the conduct of WDC proceedings.

(iii) Article 19(1)(g) of the Constitution of India is attracted as the moment a person is declared as wilful defaulter. A Fundamental right under Article 19 or 21 can be enforced even against persons other than State or its instrumentalities.

A finding by Wilful Defaulter Committee (WDC) should not simply rely on a Transaction Audit Report (TAR), which unacceptable by the NCLT? – Ankit Bhuwalka Erstwhile Director of Bhuwalka Steel Industries Ltd. Vs. IDBI Bank Ltd. and Anr. – Bombay High Court Read Post »

No bar under the law for simultaneous proceeding both under the Negotiable Instrument Act, 1881 (NI Act) and under the SARFAESI Act, 2002 in respect of the same transaction and the question of enrichment in such circumstances does not arise – Madhusudan Garai Vs. State of West Bengal and Anr. – Calcutta High Court

Hon’ble Calcutta High Court held that a proceeding under section 138 of the N.I. Act is not a proceeding so called for realization of arrear amount or for recovery of money. Section 138 deals with punishment for dishonor of cheque for insufficiency of fund etc, whereas the object of a proceeding under the SARFAESI Act is to ensure that dues of secured creditors including banks finanical institutions are recovered from the default borrower without any obstruction or without intervention of courts or tribunals. Accordingly there is no bar under the law for simultaneous proceeding both under the N.I. Act and under the SARFAESI Act in respect of the same transaction and the question of enrichment in such circumstances does not arise at all.

No bar under the law for simultaneous proceeding both under the Negotiable Instrument Act, 1881 (NI Act) and under the SARFAESI Act, 2002 in respect of the same transaction and the question of enrichment in such circumstances does not arise – Madhusudan Garai Vs. State of West Bengal and Anr. – Calcutta High Court Read Post »

Is jurisdictional monetary threshold of Rs. 20 lakh applicable to an NBFC that is a Financial Institution (FI) under the SARFAESI Act, 2002, and has invoked the SARFAESI Act as a Secured Creditor? | Is writ maintainable when the questions of jurisdiction raised? – Gupta Hardware Store and Ors. Vs. Union of India and Ors. – Himachal Pradesh High Court

A Division Bench of the Hon’ble Himachal Pradesh High Court held that:

(i) When the questions of jurisdiction are raised to the maintainability of any proceedings or pure questions of law arise with respect to existence, exercise of power by any authority/Tribunal created under a statute, then alternate remedy is no bar and is rendered a mere technicality. The writ Court can extend the large arms of its jurisdiction and powers to address and undo the wrong or illegal usurpation of powers by any statutory authority.
(ii) The notification issued under Section 2(1)(m)(iv) of the SARFAESI Act would not only apply, but bind the financial company, therefore, once these respondents seek to enforce the claim under the SARFAESI Act, as such, they are bound by the Notification dated 12.02.2021.

Is jurisdictional monetary threshold of Rs. 20 lakh applicable to an NBFC that is a Financial Institution (FI) under the SARFAESI Act, 2002, and has invoked the SARFAESI Act as a Secured Creditor? | Is writ maintainable when the questions of jurisdiction raised? – Gupta Hardware Store and Ors. Vs. Union of India and Ors. – Himachal Pradesh High Court Read Post »

The jurisdiction of the Civil Court is barred in respect of matters which a DRT or DRAT is empowered to determine in respect of any action – Anoob J.Singh and Anr. Vs. Indian Bank and Anr. – Madras High Court

The Hon’ble Madras High Court held that the relief claimed by the revision petitioner / plaintiff was rightly rejected by the Trial Court in view of the provisions of Section 34 of the SARFAESI Act. The learned Trial Judge had passed the said order on the basis of a statutory bar. As observed earlier, the scope in which a civil suit is maintainable as determined by this Court in the case of Mardia Chemicals Limited (supra) is very limited. The case of the revision petitioner / plaintiff would not come within the said limited scope.

The jurisdiction of the Civil Court is barred in respect of matters which a DRT or DRAT is empowered to determine in respect of any action – Anoob J.Singh and Anr. Vs. Indian Bank and Anr. – Madras High Court Read Post »

The doctrine of res judicata cannot be stretched to perpetuate restrictions on fundamental rights | The right to travel abroad cannot be curtailed arbitrarily or indefinitely – Atul Punj Vs. Union of India and Ors. – Delhi High Court

The Hon’ble Delhi High Court held that:

(i) When subsequent developments alter the factual or legal matrix, courts retain the flexibility to revisit and adjudicate such matters to ensure justice. In such cases, courts must adopt a pragmatic approach, balancing the need for judicial finality with the imperative to protect constitutional rights in light of new and compelling circumstances.
(ii) The right to travel abroad, being an essential component of the right to personal liberty under Article 21 of the Constitution, cannot be curtailed arbitrarily or indefinitely. Restrictions such as an LOC must pass the test of proportionality and necessity, ensuring that they are imposed only when supported by credible material.

The doctrine of res judicata cannot be stretched to perpetuate restrictions on fundamental rights | The right to travel abroad cannot be curtailed arbitrarily or indefinitely – Atul Punj Vs. Union of India and Ors. – Delhi High Court Read Post »

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