Case Note & Summary
The judgment involves three writ petitions filed by financial institutions seeking police protection for recovery of possession of secured assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioners, L & T Finance Limited, TJSB Sahakari Bank Ltd., and The National Co-operative Bank Ltd., had initiated proceedings under the SARFAESI Act against defaulting borrowers and sought police assistance to take possession of the secured assets. The police authorities refused to provide assistance, citing lack of jurisdiction or that the remedy under Section 14 of the SARFAESI Act was available. The petitioners approached the High Court under Article 226 of the Constitution of India. The court considered the legal issues of whether the writ jurisdiction is ousted by the availability of alternative remedy under Section 17 of the SARFAESI Act, whether Section 14 of the SARFAESI Act bars police protection, and whether co-operative banks are covered under the SARFAESI Act. The court held that the existence of an alternative remedy does not oust the writ jurisdiction, especially when the petition raises questions of law. It further held that Section 14 of the SARFAESI Act does not bar the grant of police protection and that co-operative banks are covered under the SARFAESI Act by virtue of a notification. The court directed the police authorities to provide necessary assistance to the petitioners for recovery of possession of the secured assets. The judgment clarifies that financial institutions are entitled to police protection for enforcement of security interests under the SARFAESI Act.
Headnote
A) Constitutional Law - Writ Jurisdiction - Alternative Remedy - Availability of alternative remedy under Section 17 of SARFAESI Act does not oust the writ jurisdiction of the High Court under Article 226 of the Constitution of India - The court held that the existence of an alternative remedy is not an absolute bar to the maintainability of a writ petition, especially when the petition raises questions of law or involves breach of fundamental rights (Paras 10-12). B) SARFAESI Act - Police Protection - Section 14 - Section 14 of the SARFAESI Act does not bar the grant of police protection by the High Court in exercise of its writ jurisdiction - The court held that the remedy under Section 14 is not exhaustive and the High Court can direct police authorities to provide assistance for recovery of possession of secured assets (Paras 13-15). C) SARFAESI Act - Applicability to Co-operative Banks - Co-operative banks are covered under the SARFAESI Act by virtue of notification issued under Section 2(1)(c)(v) of the SARFAESI Act - The court held that the Multi-state Co-operative Societies Act, 2002 does not bar the application of the SARFAESI Act to co-operative banks (Paras 16-18). D) SARFAESI Act - Recovery of Possession - Police Assistance - Financial institutions are entitled to police protection for recovery of possession of secured assets under the SARFAESI Act - The court held that the police authorities are duty-bound to provide assistance to the financial institutions for recovery of possession of secured assets (Paras 19-21).
Issue of Consideration
Whether financial institutions are entitled to police protection for recovery of possession of secured assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and whether the writ jurisdiction under Article 226 of the Constitution of India is ousted by the availability of alternative remedy under Section 17 of the SARFAESI Act.
Final Decision
The court allowed the writ petitions and directed the police authorities to provide necessary assistance to the petitioners for recovery of possession of the secured assets.
Law Points
- Writ jurisdiction under Article 226 of Constitution of India is not ousted by availability of alternative remedy under Section 17 of SARFAESI Act
- Section 14 of SARFAESI Act does not bar police protection
- Financial institutions are entitled to police assistance for recovery of secured assets
- Co-operative banks are covered under SARFAESI Act by virtue of notification under Section 2(1)(c)(v) of SARFAESI Act
- Multi-state Co-operative Societies Act
- 2002 does not bar application of SARFAESI Act.
