Can d recent position of law and current citations after mardia chemical case for the securitization
anoop
(Querist) 30 August 2012
This query is : Resolved
can d recent position of law and current citations after mardia chemical case for the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 be provided?
ajay sethi
(Expert) 30 August 2012
the case of Mardia chemicals1, the Supreme Court upheld the constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) (for short, 'the Act') except subsection (2) of section 17 of the Act under which the Debts Recovery Tribunal (Tribunal) shall not entertain the appeal unless the borrower deposits with Tribunal, 75% of the amount claimed in the notice issued under subsection (2) of section 13.
It is now provided that the Appellate Tribunal shall not entertain the appeal of the borrower unless the borrower deposits 50% of the amount of debt due from him or the amount determined by the Debts Recovery Tribunal, whichever is less.
Guest
(Expert) 31 August 2012
There's far more beyond to add to the citation of Mardia Chemicals. IN the case of Mardia Chemicals, Apex Court not only held what Mr. Sethi said, but Apex Court held where the Jurisdiction of Civil Court commences and under what circumstances Civil Court has jurisdiction to entertain a suit which though falls under the ambit of SARFAESI and DRT.
51. However, to a very limited extent jurisdiction of the civil court can also be invoked, where for
example, the action of the secured creditor is alleged to be fraudulent or their claim may be so
absurd and untenable which may not require any probe, whatsoever or to say precisely to the extent
the scope is permissible to bring an action in the civil court in the cases of English mortgages. We
find such a scope having been recognized in the two decisions of the Madras High Court which have
been relied upon heavily by the learned Attorney General as well appearing for the Union of India,
namely V.Narasimhachariar (supra) p.135 at p.141 and 144, a judgment of the learned single Judge
where it is observed as follows in para 22:
"The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties
and obligations are twofold in character. The mortgagor can come to the Court before sale with an
injunction for staying the sale if there are materials to show that the power of sale is being exercised
in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an
action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of
which relief is sought: 'Adams v. Scott, (1859) 7 WR (Eng.) 213 (Z49). I need not point out that this
restraint on the exercise of the power of sale will be exercised by Courts only under the limited
circumstances mentioned above because otherwise to grant such an injunction would be to cancel
one of the clauses of the deed to which both the parties had agreed and annul one of the chief
securities on which persons advancing moneys on mortgages rely. (See Rashbehary Ghose Law of
Mortgages, Vol.II, Fourth Edn., page 784).
anoop
(Querist) 31 August 2012
thank you both of u sirs.. however asmentioned in second reply, an as in d mardia chemical case, d client approached to me is fraudulently made guarantor using his documents.i hv send d objection letter dto d officials, however am concerned about the new developments after d expiry of 60 days period as per sec 13, after banks demand leter........
Guest
(Expert) 31 August 2012
You can file civil suit for declaration and injunction as held by Apex Court in the case of Mardia Chemicals.
