Allowed

Shree Sai Products, Gandhinagar v. the Sangli Bank Ltd.

Bombay HC20 Jul 2011WP/4319/2011

Case brief

AI extract

What is this about?

The Bank challenged a delay in SARFAESI proceedings due to a prior injunction. The Court denied general interference but granted a temporary stay on forcible possession for two weeks to allow the petitioner to approach the Debts Recovery Tribunal under Section 17.

What did the court decide?

Directed the Bank not to take forcible possession of secured assets for two weeks to enable the petitioner to move the Debts Recovery Tribunal under Section 17; immediate possession allowed if no obje

Shree Sai Products, Gandhinagar Vs the Sangli Bank Ltd. — Company and Corporate | Bombay HC (2011)

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VBC 1 wp4319.11-20.7

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE

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WRIT PETITION NO.4319 OF 2011

Shree Sai Products.

..Petitioner.

versus

The Sangli Bank Ltd.

..Respondent.

Mr.A.M.Joshi for the Petitioner. Mr.G.V.Bhagwat i/b. M/s.Divekar & Co. for the Respondent.

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CORAM : DR.D.Y.CHANDRACHUD & ANOOP V. MOHTA , JJ.

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July 20, 2011.

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P.C. :

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The Respondent instituted a suit against the Petitioner, being Special Civil Suit 186 of 2004 before the Civil Judge, Senior Division, Kolhapur for the recovery of its dues on 30 April 2004. The suit was instituted for the recovery of the dues outstanding to the Respondent under a cash credit facility. During the pendency of the suit, the Bank issued a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, on 4 September 2004. In the meantime, the Petitioner moved an application for

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VBC 2 wp4319.11-20.7

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injunction and an adinterim injunction was issued by the Trial Court restraining the Bank from taking possession. It was only on 5 February 2010 that the Trial Court vacated the order of injunction. The Bank has thereupon taken steps by moving the District Magistrate for an order under Section 14. The Court has been informed that an order was passed on 30 May 2011 and the Tasildar has fixed an appointment on 28 July 2011 for taking possession.

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We are of the view that no interference by this Court under Article 226 of the Constitution is warranted. The grievance of the Petitioner, as urged before the Court, is that the proceedings which were initiated under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 in 2004 are belatedly sought to be revived. That, however, cannot be a ground to challenge the action of the Bank. As a matter of fact, it is because the Petitioner had obtained an injunction in 2004, which continued to hold the field until 2010, that the Bank could not take further steps. That apart, the Petitioner has a remedy under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

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VBC 3 wp4319.11-20.7

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The Petitioner must be relegated to follow the remedy which has been made by Parliament in enacting Section 17.

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However, in our view, the ends of justice would be met if there is a direction to the effect that while the Bank may take formal possession, it shall not take forcible possession of the secured assets for a period of two weeks to enable the Petitioner to move the Debts Recovery Tribunal under Section 17. In the event that the Petitioner raises any obstruction to the Bank taking formal possession as directed, the restraining direction as stated hereinabove would cease and the Bank would be at liberty to take forcible possession. Upon the expiry of a period of two weeks, in the event that no restraining order has been passed by the Debts Recovery Tribunal, the Bank would be at liberty to take further steps in accordance with law including by taking actual physical possession. All issues are kept open to be urged before the Debts Recovery Tribunal under Section 17. The Petition is accordingly disposed of.

Shree Sai Products, Gandhinagar v. the Sangli Bank Ltd.

Case brief

What is this about?

What did the court decide?

Shree Sai Products, Gandhinagar v. the Sangli Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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