Research › Search › Judgment

Madras High Court · body

2005 DIGILAW 1774 (MAD)

L. I. C. Housing Finance Ltd. v. Ministry of Finance and Company Affairs & Others

2005-11-15

P.D.DINAKARAN

body2005
Judgment :- (This writ petition has been filed under Article 226 of Constitution of India praying this Court for the issuance of a writ of certiorarified Mandamus to call for the records of the 3rd respondent in Mu.Mu.68333/2005 (C3) dated 20.07.2005 and to quash the same and consequentially issue directions to the 3rd respondent to render assistance to the petitioner in terms of Sec.14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.) The facts led to filing of the above Writ Petition are as follows:- The Government of India introduced the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short SARFAESI Act) and by enforcing the provisions of the Act, the Banks could realize their long pending outstanding amounts. Section 14 of the Act is very specific about the assistance that could be secured from the Chief Metropolitan Magistrate or District Magistrate, who can be approached by the secured creditors seeking assistance to take possession of the secured assets. There is no kind of adjudicatory process involved in the hands of the Chief Metropolitan Magistrate or the District Magistrate. By notification dated 10.11.2003, the Ministry of Finance, Government of India notified few housing finance Companies empowering them to take possession of the properties as per the provisions of the SARFAESI Act and the petitioner institution is one among them. 2. The case of the petitioner is that its area office at Madurai had filed six applications before the third respondent herein furnishing all particulars about the defaulting borrowers and seeking assistance in taking possession of the mortgaged property. But the petitioner received a letter dated 20.7.2005 from the third respondent stating that there are some practical difficulties in assisting the secured creditors in taking possession of the mortgaged assets as provided under the Act and it had written to the Government seeking for an order and only after getting the orders from the Government any application seeking assistance under the Act would be entertained. According to the petitioner, in terms of the provisions of the Act, no adjudicatory process is involved in the hands of the District Magistrates and they only assist the secured creditors to take possession of the secured assets. According to the petitioner, in terms of the provisions of the Act, no adjudicatory process is involved in the hands of the District Magistrates and they only assist the secured creditors to take possession of the secured assets. In these circumstances, the petitioner has filed the present writ petition with a prayer to issue a writ of certiorarified mandamus calling for the records of the third respondent in Mu.Mu.68333/2005(C3), dated 20.7.2005 and to quash the same and to direct the third respondent to render assistance to the petitioner in terms of section 14 of the SARFAESI Act. 3. Section 14(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 reads as under, “Sec.14(1) where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured assets is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him- (a) take possession of such asset and documents relating thereto; and (b) forward such assets and documents to the secured creditor.” A reading of sub-section (1) Section 14 makes it clear that the District Magistrate, viz., the Collector of the District, has no option to seek for any clarification from the Government in giving effect to the procedures prescribed therein. The learned Government Advocate is not in a position to convince this Court as to whether the Collector can take any exception to the procedures prescribed under section 14 of the Act. 4. In view of the above, the writ petition is allowed as prayed for. No costs. Connected WPMP 29660 of 2005 is closed.