Dismissed

Puneeth Mujal, v. M/s.Cholamandalam Investment

Madras HC10 Jul 2017WP/17342/2017

Case brief

AI extract

What is this about?

This single-judge bench dismissed a writ petition challenging a possession notice under Section 13(2) of the SARFAESI Act. Relying on Mardia Chemicals and Section 13(3A), the Court held that such a notice is merely a demand and does not attract writ jurisdiction for quashing.

What did the court decide?

The writ petition was dismissed; no costs awarded; the connected miscellaneous petition was closed.

Puneeth Mujal, Vs M/s.Cholamandalam Investment — Banking and Recovery | Madras HC (2017)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated: 10/7/2017

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The Honourable Mr.JUSTICE S. MANIKUMAR

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and

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The Honourable Ms.JUSTICE V. BHAVANI SUBBAROYAN

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W.M.P.No.18854 of 2017

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Puneeth Munjal ... Petitioner Vs

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M/s.Cholamandalam Investment and Finance Company Limited rep. By its Authorised Officer Dare House No.21 N S C Road Chennai 600 001. ... Respondent

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Writ Petition filed under Article 226 of Constitution of India, to issue a Writ of certiorari to call for the records pertaining to impugned order dated 28/4/2017 bearing No.SARFAESI/DN/329/2017 passed by the respondent under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and quash the same.

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For Petitioner : Mr.K.Vijayaragavan

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(Order of the Court was made by S.Manikumar,J)

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Borrower, has challenged the possession notice, dated 28/4/2017, issued under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, contending inter alia that the respondent has invoked arbitration proceedings, by issuing a notice, dated 20/3/2017. Added further, Mr.K.Vijayaragavan, learned counsel for the petitioner submitted that substantial payment has been made towards the loan account.

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https://hcservices.ecourts.gov.in/hcservices/

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Heard the learned counsel for the petitioner and perused the materials available on record.

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Notice under Section 13(2) is only a demand made by the Bank, Hon'ble Supreme Court in Mardia Chemicals v. Union of India reported in AIR 2004 SC 2371 : 2004 (4) SCC 311 held that notice under Section 13(2) would not give rise to a cause to challenge. However, as per Section 13(3A) of the SARFAESI Act, 2002, if, on receipt of the notice under subsection (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for nonacceptance of the representation or objection to the borrower: PROVIDED that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A.

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4. In the light of the above decision and the statutory provision, writ of certiorari, cannot be issued to quash the notice under Section 13(2) of the SARFAESI Act 2002.

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