Standard Chartered Bank v. V. Noble Kumar, (2013) 9 SCC 620
Ss. 13(2) & 13(4)(a), 14 and 17 - Possession of secured asset by creditor - Secured creditor Bank approaching Magistrate directly for enforcing security interest (obtaining possession of secured asset) without resorting to taking possession on its own under S. 13(4) - Legality - Exhaustion of right to obtain possession of secured asset directly by Bank under S. 13(4) prior to approaching Magistrate for taking possession of secured asset - Held, not mandatory - Nonattempt of Bank to obtain possession of secured asset directly, if deprives right of appeal of borrower - Failure of debtor to object to Bank's notices under S. 13(2) - Waiver of right to appeal under S. 17 - Held, it is not mandatory for secured creditor (Bank herein) to make an attempt to obtain possession on his own before approaching Magistrate - Secured creditor Bank/FI can resort to any one of three methods available to it to take possession of secured assets: (1) by giving notice under R. 8(1) of 2002 Rules if no resistance from borrower is met; (2) by making application to Magistrate, when it meets with resistance from borrower after notice; or (3) by directly approaching Magistrate under S. 14 - Further, appeal under S. 17 is available to borrower only after losing possession of secured asset by whatever manner, either through process contemplated under S. 14 or without resorting to such process - Hence, plea that only after making unsuccessful attempt to take possession of secured asset, can the secured creditor Bank/FI approach Magistrate lest it would deprive borrower remedy of appeal under S. 17, held, is misconceived - In instant case, appellant secured creditor Bank filed application before Magistrate only after receiving no response from respondent debtor to notices under S. 13(2) - Content of affidavit of appellant Bank has all basic requirements necessary for granting delivery of possession of secured asset by Magistrate - Though, on date of application, the law did not oblige Magistrate to apply his mind to facts stated in affidavit filed by appellant Bank, said affidavit substantially complies with conditions stipulated under newly introduced proviso to S. 14(1) - Thus held, there is no illegality in impugned order - As borrower did not raise any substantive objection against notices issued by appellant Bank for said possession but only objected to legality of decision of Magistrate by invoking Art. 226 of Constitution and also stalled proceedings for 4 yrs, held, borrower is restrained from availing remedy of appeal under S. 17, (2013) 9 SCC 620-A
S. 13(4)(a) and 13(2) - Possession of secured assets by secured creditor Bank/FI - Conditions to be fulfilled - Held, (1) there must be security agreement creating liability of borrower to make repayment of secured debt and (2) demand by secured creditor by notice in writing to borrower to discharge full liability within a period of 60 days from date of notice, (2013) 9 SCC 620-B
S. 14 - Held, R. 8 of 2002 Rules applies to secured creditor, if possession of secured asset is to be obtained directly without taking recourse to approaching court - It does not apply to Magistrate or Receiver who are bound by CrPC, 1973 or CPC, 1908 as the case may be, (2013) 9 SCC 620-C
S. 14 - Magistrate, held, not to abide by procedure under R. 8 of 2002 Rules before passing order under S. 14 - Functions of Magistrate are structured by CrPC - Hence, he is required to act in accordance with provisions of CrPC, 1973 to take possession of property unless expressly ordained otherwise by any other law - Further, held, Magistrate or civil court while attaching movable and immovable properties appoints Receiver - Such Receiver has to follow CrPC or CPC as the case may be, (2013) 9 SCC 620-D
Ss. 17 and 13(3-A) proviso - Right of appeal of borrower - When available - Held, appeal to Tribunal is available only after losing possession of secured asset but not prior to it - Reasons indicated by secured creditor Bank/FI for rejection of objections of borrower or likely action of secured creditor shall not confer right of appeal under S. 17 upon borrower, (2013) 9 SCC 620-E
S. 14(1) second proviso (as ins. by Act 1 of 2013) - Satisfaction of Magistrate - Duty of Magistrate - Held, Magistrate is required to examine factual correctness of assertions made in affidavit but not legal niceties of transaction - Only after recording of satisfaction, can Magistrate pass appropriate orders regarding taking of possession of secured asset,
(2013) 9 SCC 620-F
Constitution of India
Arts. 136, 226 and 142 - Jurisdiction of Supreme Court - Supreme Court restraining appeal by borrower under S. 17, SARFAESI Act, 2002 - Waiver - Inference of - Borrower not raising any substantive objection to possession of secured asset by secured creditor when notices issued by secured creditor under S. 13(2) of SARFAESI Act, and only objecting as to legality of decision of Magistrate by invoking Art. 226 and stalling proceedings for 4 yrs - Hence, held, borrower is not entitled to avail remedy of appeal under S. 17 of SARFAESI Act, (2013) 9 SCC 620-G
Ss. 13(2) & 13(4)(a), 14 and 17 - Possession of secured asset by creditor - Secured creditor Bank approaching Magistrate directly for enforcing security interest (obtaining possession of secured asset) without resorting to taking possession on its own under S. 13(4) - Legality - Exhaustion of right to obtain possession of secured asset directly by Bank under S. 13(4) prior to approaching Magistrate for taking possession of secured asset - Held, not mandatory - Nonattempt of Bank to obtain possession of secured asset directly, if deprives right of appeal of borrower - Failure of debtor to object to Bank's notices under S. 13(2) - Waiver of right to appeal under S. 17 - Held, it is not mandatory for secured creditor (Bank herein) to make an attempt to obtain possession on his own before approaching Magistrate - Secured creditor Bank/FI can resort to any one of three methods available to it to take possession of secured assets: (1) by giving notice under R. 8(1) of 2002 Rules if no resistance from borrower is met; (2) by making application to Magistrate, when it meets with resistance from borrower after notice; or (3) by directly approaching Magistrate under S. 14 - Further, appeal under S. 17 is available to borrower only after losing possession of secured asset by whatever manner, either through process contemplated under S. 14 or without resorting to such process - Hence, plea that only after making unsuccessful attempt to take possession of secured asset, can the secured creditor Bank/FI approach Magistrate lest it would deprive borrower remedy of appeal under S. 17, held, is misconceived - In instant case, appellant secured creditor Bank filed application before Magistrate only after receiving no response from respondent debtor to notices under S. 13(2) - Content of affidavit of appellant Bank has all basic requirements necessary for granting delivery of possession of secured asset by Magistrate - Though, on date of application, the law did not oblige Magistrate to apply his mind to facts stated in affidavit filed by appellant Bank, said affidavit substantially complies with conditions stipulated under newly introduced proviso to S. 14(1) - Thus held, there is no illegality in impugned order - As borrower did not raise any substantive objection against notices issued by appellant Bank for said possession but only objected to legality of decision of Magistrate by invoking Art. 226 of Constitution and also stalled proceedings for 4 yrs, held, borrower is restrained from availing remedy of appeal under S. 17, (2013) 9 SCC 620-A
S. 13(4)(a) and 13(2) - Possession of secured assets by secured creditor Bank/FI - Conditions to be fulfilled - Held, (1) there must be security agreement creating liability of borrower to make repayment of secured debt and (2) demand by secured creditor by notice in writing to borrower to discharge full liability within a period of 60 days from date of notice, (2013) 9 SCC 620-B
S. 14 - Held, R. 8 of 2002 Rules applies to secured creditor, if possession of secured asset is to be obtained directly without taking recourse to approaching court - It does not apply to Magistrate or Receiver who are bound by CrPC, 1973 or CPC, 1908 as the case may be, (2013) 9 SCC 620-C
S. 14 - Magistrate, held, not to abide by procedure under R. 8 of 2002 Rules before passing order under S. 14 - Functions of Magistrate are structured by CrPC - Hence, he is required to act in accordance with provisions of CrPC, 1973 to take possession of property unless expressly ordained otherwise by any other law - Further, held, Magistrate or civil court while attaching movable and immovable properties appoints Receiver - Such Receiver has to follow CrPC or CPC as the case may be, (2013) 9 SCC 620-D
Ss. 17 and 13(3-A) proviso - Right of appeal of borrower - When available - Held, appeal to Tribunal is available only after losing possession of secured asset but not prior to it - Reasons indicated by secured creditor Bank/FI for rejection of objections of borrower or likely action of secured creditor shall not confer right of appeal under S. 17 upon borrower, (2013) 9 SCC 620-E
S. 14(1) second proviso (as ins. by Act 1 of 2013) - Satisfaction of Magistrate - Duty of Magistrate - Held, Magistrate is required to examine factual correctness of assertions made in affidavit but not legal niceties of transaction - Only after recording of satisfaction, can Magistrate pass appropriate orders regarding taking of possession of secured asset,
(2013) 9 SCC 620-F
Constitution of India
Arts. 136, 226 and 142 - Jurisdiction of Supreme Court - Supreme Court restraining appeal by borrower under S. 17, SARFAESI Act, 2002 - Waiver - Inference of - Borrower not raising any substantive objection to possession of secured asset by secured creditor when notices issued by secured creditor under S. 13(2) of SARFAESI Act, and only objecting as to legality of decision of Magistrate by invoking Art. 226 and stalling proceedings for 4 yrs - Hence, held, borrower is not entitled to avail remedy of appeal under S. 17 of SARFAESI Act, (2013) 9 SCC 620-G
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