9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (6) TMI 76 - HC - Indian LawsDebts Recovery - action under SARFAESI Act - stay - held that - requirement of deposit of 75% of amount claimed before entertaining an appeal (petition) under Section 17 of the Act is an oppressive onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down. After a detailed examination of the whole issues the Apex Court in Mardia Chemicals Ltd. Versus Union of India 2004 (4) TMI 294 - SUPREME COURT OF INDIA has upheld the validity of the Act except that of Section 17(12). - Despite this counsel contended that the issues raised by the petitioners in these writ petitions were not considered by the Apex Court and therefore according to him this Court should go into the validity of the provisions of the Act once again. - This judgment is a complete answer to the contentions raised by the learned counsel for the petitioners.
Issues:
Challenging the constitutional validity of provisions under the SARFAESI Act, including Sections 34 and 35, seeking various reliefs such as declaring certain sections unconstitutional, incorporating provisions from the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and questioning the validity of specific rules and sections under the SARFAESI Act. Analysis: The petitioners in the writ petitions challenged the actions taken by respondent Banks under the SARFAESI Act. One petitioner, a guarantor of a housing loan and cash credit facility, filed the petition after his mother, the borrower, had been involved in multiple legal proceedings related to the defaults. The main prayers included challenging the constitutionality of Sections 34 and 35 of the SARFAESI Act, seeking incorporation of provisions from the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and questioning the validity of specific sections and rules under the SARFAESI Act. The High Court referred to a previous Supreme Court judgment in Mardia Chemicals Ltd. v. Union of India, which upheld the constitutional validity of the SARFAESI Act, except for Section 17(2). The Supreme Court highlighted the borrower's protections under the Act, such as the requirement for a 60-day notice before action, the right to raise objections, and the ability to appeal to the Debt Recovery Tribunal. The Supreme Court emphasized the Act's aim to expedite recovery of NPAs and promote economic growth. The High Court rejected the petitioners' contentions, citing Article 141 of the Constitution, which binds lower courts to Supreme Court decisions. The Court emphasized that once the Supreme Court decides on a principle, lower courts must adhere to its rulings. The judgment in Director of Settlements, A.P v. M.R.Apparao was referenced to support the binding nature of Supreme Court decisions on lower courts. Consequently, the High Court dismissed the writ petitions, stating that they were ill-advised and misconceived, given the binding nature of Supreme Court judgments on the issues raised. Overall, the High Court's detailed analysis reaffirmed the constitutional validity of the SARFAESI Act, in line with the Supreme Court's previous ruling, and emphasized the importance of adhering to established legal principles and precedents set by higher courts.
|
