2007 (4) TMI 721 - HC - Companies Law

Summary

Issues involved:
The petition challenges the order passed by the District Magistrate under Section 14 of the Securitisation Act.

Summary:

Issue 1: Application under Section 14 of the Securitisation Act
The petitioner bank advanced a loan to respondents, leading to outstanding dues. Proceedings under Section 13(2) of the Securitisation Act were initiated, followed by an application under Section 14 to recover possession. The District Magistrate rejected the application, prompting the challenge in this petition.

Issue 2: Interpretation of Section 14 of the Securitisation Act
Section 14 empowers the Chief Metropolitan Magistrate or District Magistrate to assist in taking possession of secured assets. The authority's role is ministerial, limited to assisting the secured creditor without adjudicatory powers. Any disputes must be addressed through the Tribunal as per Sections 17 and 18 of the Act.

Issue 3: Jurisdiction under the Securitisation Act
Section 34 divests civil courts of jurisdiction in matters determinable by the Tribunal. The legislative scheme provides for statutory remedies before the Tribunal, prohibiting civil courts from interfering. The authority under Section 14 can only assist the secured creditor, not adjudicate disputes.

Judgment:
The District Magistrate exceeded jurisdiction by making unwarranted observations in the impugned order. The order is quashed, and the proceedings are restored to the District Magistrate for a lawful decision. The petitioner's application is revived, directing the District Magistrate to facilitate possession transfer to the petitioner. The petition is allowed, with no costs imposed.