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TMI Blog2008 (2) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to the petitioner. On perusal of the purported notice dated 1.10.2005, this Court does not find that any separate notice under Section 13(4) of the Securitization Act has been given. 2. Learned Counsel for opposite party Nos. 6 and 7 submits that no notice under Section 13(4) of the Securitization Act is required and as such no separate notice was given under Section 13(4) of the said Act. 3. It is difficult for us to accept the said contention. It is well settled that notice under Section 13(4) is a must before the financial institution takes any of the measures specified in the said Sub-section. 4. This becomes all the more necessary in view of right of appeal given under Section 17. Unless notice under Section 13(4) is given, the right of appeal which is given under Section 17 of the Statute becomes illusory. This omission, according to the learned Counsel for the petitioner, is a fundamental one and we find that there is a lot of substance in that. 5. It has been urged that opposite party Nos. 6 and 7, namely, Bijayananda Mishra and Sanjaya Sinha, have styled themselves as Authorised Representative and Executive Director of Maharshi Housing Development Finance C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erforming asset, then, the secured creditor may require the borrower by notice in writing to discharge in full His liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under Sub-section (4). 10. From a perusal of those provisions, it appears that in order to invoke them, the opposite party must show that, 'security interest' has been created in favour of any 'secured creditor'. If it is so created it can be enforced without the intervention of the Court or Tribunal, by such creditor in accordance with the provisions of the said Act. In the said Act the expressions secured creditor and security interest have been defined. Secured creditor has been defined in Section 2(zd) which definition is as follows: (zd) 'secured creditor' means any bank or financial institution or any consortium or group of banks or financial institutions and includes- (i) debenture trustee appointed by any bank or financial institution; or (ii) securitization company or reconstruction company, whether acting as such or managing a trust set up by such secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 of the said Act on the date the alleged agreement was entered into, opposite party No. 6 must be a financial institution and a secured creditor within the meaning of the said Act. 14. It is clear that prior to the notification dated 10.11.2003, the opposite party No. 6 was not a financial institution within the meaning of Section 2(m)(iv) of the Act. Since it was not a financial institution, it was not a secured creditor and it cannot invoke the provisions of the said Act in respect of a loan transaction of a prior date. 15. The definition of 'financial institution' under Section 2(m) of the said Act has several classifications. Section 2(m)(i) is meant for public financial institution within the meaning of Section 4A of the Companies Act. Section 2(m)(ii) is meant to include any institution specified by the Central Government under sub-clause (ii) of Clause (h) of Section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act and under Section 2(m)(iii) means the International Finance Corporation established under the International Finance Corporation (Status, Immunities and Privileges) Act, 1958. Admittedly opposite party No. 6 is not coming under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty No. 6 do not apply to the facts and circumstances of this case. 20. Learned Counsel for the petitioner has relied on a judgment of the Supreme Court in the case of (Mrs.) Sanjana M. Wig v. Hindustan Petro Corporation Ltd. reported in 2005 (35) AIC 945 (SC). In that case it has been held by the learned Judges that the remedy under Article 226 of the Constitution should not be denied and in an appropriate case, inspite of availability of the alternative remedy. The learned Judges relied on the principles laid down in Whirlpool Corporation's case (1998) 8 SCC 1 where it has been held that the High Court may, despite the existence of alternative remedy, still exercise its writ jurisdiction at least in three situations, i.e., (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. 21. We are of the view, for the reasons discussed above, that in the facts of this case, the proceeding under Section 13 of the Act against the petitioner is without jurisdiction. This case is coming und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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