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TMI Blog2010 (2) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14 of the said Act requesting District Magistrate, Rajkot to assist the secured creditor in taking possession of secured assets. The appellants were borrowers/mortgagors or tenants in actual possession of the portion of the property, being aggrieved by such action, preferred an Appeal under Section 17 of the said Act, which was opposed by the Bank on the ground that it has not taken any measures under Section 13(4) of the Act and thereby appeals under Section 17 were not maintainable. The Presiding Officer, Debt Recovery Tribunal-II, Ahmedabad accepting the contention raised by the Bank observed that It is difficult to hold on the strength of the order of the District Magistrate passed under Section 14 of the NPA Act that the possession is taken or the measures under Section 13(4) are taken and thereby dismissed all the appeal being premature and not maintainable. 3. It appears that the appellants thereafter challenged the order dated 6th January, 2009 passed by the District Magistrate, Rajkot, whereby it was ordered to take over the possession of the property by filing different writ petitions, which, having dismissed, the present appeals have been preferred against the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the action under Section 14 of the Act amounts to taking measures under Section 13(4) of the Act. 9. Chapter-III of the Securitisation Act deals with enforcement of security interest and for enforcement, the secured creditor, without intervention of Court or Tribunal, may take steps for recovery of secured debts. For taking such steps, initially notice is required to be issued under sub section -2 to Section 13 on the borrower, who is under a liability, to a secured creditor under a security agreement, and makes any default in repayment of secured debt or any instalment thereof and thereby, the borrower by notice in writing may be asked to discharge his liability to secured creditor within 60 days. The details of amount required to be shown in the notice with an intention to enforce to recover the secured assets by the secured creditor in terms of sub section (3) to Section 13 of the Act. On receipt of such notice under subsection (2), the borrower may raise objections and file representation under sub section (3A) to Section 13 and the secured creditor in his turn, is required to decide objections in one or other way. In case the borrower fails to discharge his liability w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely, the bank/FI obtains interest in the property concerned. It is for this reason that the NPA Act ousts the intervention of the courts/tribunals. Section 14 of the Act prescribes the manner in which possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred. For that purpose the secured creditor is required to request in writing to the District Magistrate or Metropolitan Magistrate to take possession thereof. The concept of taking possession, without making any distinction between symbolic or physical possession has to be kept in mind for taking measures under sub-section (4) to Section 13 of the Act. In this regard, following observation was made by the Supreme Court in the case of Transcore vs. Union of India and anr. (supra), as quoted hereunder: 74. Keeping the above conceptual aspect in mind, we find that Section 13(4) of the NPA Act proceeds on the basis that the borrower, who is under a liability, has failed to discharge his liability within the period prescribed under Section 13(2), which enables the secured creditor to take recourse to one of the measures, namely, taking pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to put the clock back by restoring the status quo ante. Therefore, it cannot be said that if possession is taken before confirmation of sale, the rights of the borrower to get the dispute adjudicated upon is defeated by the authorised officer taking possession. As stated above, the NPA Act provides for recovery of possession by non-adjudicatory process, therefore, to say that the rights of the borrower would be defeated without adjudication would be erroneous. Rule 8 undoubtedly, refers to sale of immovable secured asset. However, Rule 8(4) indicates that where possession is taken by the authorised officer before issuance of sale certificate under Rule 9, the authorised officer shall take steps for preservation and protection of secured assets till they are sold or otherwise disposed of. Under Section 13(8), if the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the creditor before the date fixed for sale or transfer, the asset shall not be sold or transfered. The costs, charges and expenses referred to in Section 13(8) will include costs, charges and expenses which the authorised officer incurs for preserving and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Section 13 of the Act is open to challenge under Section 17 of the Act, but failed to notice that in such circumstances the High Court under Article 226 of the Constitution of India ought not to have decided the question whether such measures taken under Section 14 was legal or not. It was not proper for the learned Single Judge to give any finding in either way with regard to legality and propriety of order dated 6th January, 2009, passed under Section 14, the aggrieved person having forum to challenge the action under sub-section (4) to Section 13 of the Act, which includes the measures taken under Section 14, before the Debt Recovery Tribunal under Section 17 of the Act. 14. For the reasons as discussed above, and to enable the appellant and aggrieved person to raise all the questions regarding legality and propriety of action of the Bank before the Tribunal, we not only set aside the order dated 29th October, 2009 passed by the learned Single Judge in Special Civil Application Nos. 4563/09 and 4564/09, but also set aside the common order dated 9.4.2009, passed by the Debt Recovery Tribunal-II, Ahmedabad in Appeal Nos. 04/09, 06/09 and 07/09. All the aforesaid Appeals stan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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