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Issues involved: Challenge to the vires of Section 14 of the Securitisation Act u/s Art.14 of the Constitution, excessive power granted to a subordinate officer u/s Securitisation Act.
Summary: The petitioner challenged the vires of Section 14 of the Securitisation Act, as the District Magistrate had taken possession of the property without issuing any notice, alleging a violation of natural justice and Art.14 of the Constitution. It was argued that the authorized officer, being a ministerial staff, cannot direct a higher-ranking officer to assist in taking action under the Act, deeming it arbitrary and ultravires. The Court noted the contentions and record, emphasizing the importance of notice to the petitioner in such actions. The Court highlighted the background of the Securitisation Act, emphasizing the need to empower banks and financial institutions to enforce their security interests. It outlined the procedure under subsections (2) to (4) of Sec.13, requiring notice to the borrower before taking possession of secured assets. The borrower has the right to make representations or objections, which the secured creditor must consider before taking any action under the Act. Referring to a previous case, the Court reiterated that a secured creditor must follow the prescribed procedure under Sec.14 to take possession of secured assets, involving the Chief Metropolitan Magistrate or District Magistrate. Any challenge to the creditor's actions must be made under Sec.17 of the Act, but such challenges do not render Sec.14 illegal. The Court upheld the validity of Sec.14 as a prescribed procedure following due notice and consideration of objections before taking possession of secured assets. In conclusion, the Court dismissed the appeal, stating that challenges to the actions of a secured creditor can be made before the Debt Recovery Tribunal under Sec.17, but such challenges do not invalidate the legality of Sec.14. No costs were awarded in the case.
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