2024 (7) TMI 1452 - SCH - Indian Laws

Challenge to proceedings initiated by the appellant State Bank of India under the SARFAESI Act, 2002 - HELD THAT - There being a mortgage and the loan amounts recoverable, the appellant is entitled to proceed under the SARFAESI Act - the liability of the guarantor is joint and several with the principal debtor. The impugned judgment is set aside. Consequently, the appellant State Bank of India is entitled to proceed under the SARFAESI Act, including the notice under Section 13(4), which was impugned and quashed vide the impugned judgment - Appeal allowed.

Summary

Issues:
Challenge to proceedings under SARFAESI Act based on impugned judgment.

Analysis:
The Supreme Court, comprising Hon'ble Mr. Justice Sanjiv Khanna, Hon'ble Mr. Justice Dipankar Datta, and Hon'ble Mr. Justice Prashant Kumar Mishra, granted leave in the case. The contesting respondent admitted that the impugned judgment was not legally sustainable, leading to the appeal being allowed. The case originated from a Writ Petition filed by the respondent challenging proceedings initiated by the State Bank of India under the SARFAESI Act through a notice under Section 13(4). Given the existence of a mortgage and recoverable loan amounts, the Court affirmed the appellant's right to proceed under the SARFAESI Act. The Court emphasized that the guarantor's liability is joint and several with the principal debtor, thereby setting aside the impugned judgment and allowing the bank to continue under the SARFAESI Act, including the previously challenged notice under Section 13(4).

Furthermore, the Court clarified that the respondent and others, if dissatisfied, could take steps as per SARFAESI Act provisions. Notably, the respondent had applied for a one-time settlement, which was partially fulfilled, but the Court refrained from making any comments on this matter. Ultimately, the appeal was allowed, and the case was disposed of accordingly, with any pending applications being deemed resolved by the judgment.