SARFACIE ACT
Shyam Ji Srivastava
(Querist) 14 August 2009
This query is : Resolved
Dear Members,
Under SARFACIE ACT property has been auctioned and amount has been deposited by the auction purchaser symbolic possession has been delivered. Bank and Auction Purchasr has filed Application under Section 14 of SARFAESI aCT before CMM but the court says that in sale certificate issued by the Bank mentioned that"The undersigned acknowledged receipt of the sale price in ful,l and handed over the delivery and possession of the schedule property." However No possession has been delivered.
Can court refuse to give protection u/s14 of the Act.
Is there any CITATION that court is bound to give Protection underthis s3ction.
Please answer earlistif possible.
Shyam Ji Srivastava
sheeba
(Expert) 14 August 2009
sir,
As per the SARFAESI ACT after giving symbolic possession, the bank has to move unde S.14 before the CJM for delivery of possession. The court cannot refuse protection u/s 14 of the Act.
The versions in the sale certificate normally speaks that "the undersigned acknowledge the receipt of the sale price being.......in full and the possession of the scheduled property on "as is where is" condition is handed over to to the purchaser.....'
Only point to be taken into consideration by the court is that the scheduled property is a secured one and the applicant is a secured creditor.Please refer the Act. The commentory gives lots of citations.
Prakash Yedhula
(Expert) 15 August 2009
See 2009 (1) CTC 341 wherein the powers of the Magistrate under Section 14 is discussed and guidelines issued.
Prakash Yedhula
(Expert) 15 August 2009
Court : Before the Madurai Bench of Madras High Court
Case No : Crl.O.P.(MD).No.3102 of 2008
Judges: THE HONOURABLE MR. JUSTICE T. SUDANTHIRAM
Parties : Indian Overseas Bank Versus M/s.Sree
Aravindh Steels Ltd. & Others
Date of Judgment : 09-09-2008
In our opinion, at the time of passing order under Section 14 of the NPA Act, the CMM/DM will have to consider only two aspects.
He must find out whether the secured asset falls within his territorial jurisdiction and whether notice under Section 13(2) of NPA Act is given or not. No adjudication of any kind is contemplated at that stage.
... ...
Following conclusions emerge from the above discussion:
1. The bank or financial institution shall, before making an application under Section 14 of the NPA Act, verify and confirm that notice under Section 13(2) of the NPA Act is given and that the secured asset falls within the jurisdiction of CMM/DM before whom application under Section 14 is made. The bank and financial institution shall also consider before approaching CMM/DM for an order under Section 14 of the NPA Act, whether Section 31 of the NPA Act excludes the application of Section 13 and 14 thereof to the case on hand.
2. CMM/DM acting under Section 14 of the NPA Act is not required to give notice either to the borrower or to the 3rd party.
3. He has to only verify from the bank or financial institution whether notice under Section 13(2) of the NPA Act is given or not and whether the secured assets fall within his jurisdiction. There is no adjudication of.
4. It is only if the above conditions are not fulfilled that the CMM/DM can refuse to pass an order under Section 14 of the NPA Act by recording that the above conditions are not fulfilled. If these two conditions are fulfilled, he cannot refuse to pass an order under Section 14.
5. Remedy provided under Section 17 of the NPA Act is available to the borrower as well as the third party.
6. Remedy provided under Section 17 is an efficacious alternative remedy available to the third party as well as to the borrower where all grievances can be raised.
7. In view of the fact that efficacious alternative remedy is available to the borrower as well as to the third party, ordinarily, writ petition under Articles 226 and 227 of the Constitution of India should not be entertained.
8. In exceptional cases of gravest injustice, a writ petition could be entertained by this Court.
9. Great care and caution must be exercised while entertaining a Writ petition because in a given case it may result in frustrating the object of the NPA Act.
10. Even if a writ petition is entertained, as far as possible, the parties should be relegated to the remedy provided under Section 17 of the NPA Act before the DRT by passing an interim order which will protect the secured assets. Adjudication and final order should be left to the DRT as far as possibleā€¯. (emphasis supplied)
15. As per the above said principles, the conclusion of the learned Chief Judicial Magistrate, Tiruchirappalli that the petitioner has not
complied with the provision of 13(3-A) of SARFAESI Act and therefore the relief cannot be granted under Section 14(1) of the Act, is incorrect.
16. In the result, the order passed by the learned Chief Judicial Magistrate, Tiruchirappalli in Crl.M.P.No.1472 of 2007 dated 11.12.2007 is set aside and the learned Chief Judicial Magistrate, Tiruchirappalli is directed to consider the application afresh on the basis of the above principles laid down and proceed according to law. The petitioner is also entitled to file additional materials, if available. Accordingly, this petition is allowed.
Shyam Ji Srivastava
(Querist) 15 August 2009
Dear Mr. Y Prakash,
Thanks in a lot for quick reply. The citation mentioned by you is not available in our Court Lib. I want to tell you that I am also in Practice since 1982 in Kanpur -UP and also Penal Lawyer of 9 Corporations including Banks. I have other Journals relating to Bank. The citation mentioned by you is also not available inh NET. If you don`t mind kindly send a copy of judgment who will help me.
Thanks and Regards
SHYAM JI SRIVASTAVA
Advocate
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