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2005 (4) TMI 316 - HC - Companies Law

Issues:
Challenge to direction for issuance of notice to respondents under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis:
The petitioner challenged the direction of the Additional Chief Metropolitan Magistrate for issuing notice to the respondents regarding assistance sought by the petitioner-secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner contended that as a secured creditor, it had issued a notice demanding repayment within 60 days, and further steps for taking possession of assets would be taken if payment was not made. The Additional Chief Metropolitan Magistrate observed the lack of a document showing registration under the Companies Act and directed notice to be issued to respondent Nos. 1 to 5. The petitioner argued that under sections 13 and 14 of the Act, a secured creditor is entitled to enforce security interest without court intervention, and seeking court assistance does not require notice to the debtor. Reference was made to a decision of the Madras High Court in a similar case, where it was held that notice under section 482 of the Criminal Procedure Code was not required based on the specific provisions of the Act. The petitioner's counsel argued that the requirement to produce a document showing company registration was unnecessary. The High Court agreed with the petitioner's arguments, allowing the petition and setting aside the direction for notice issuance and the requirement for producing the company registration document. The matter was remanded to the trial court to proceed in accordance with sections 13 and 14 of the Act.

 

 

 

 

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