Case Note & Summary
The petitioner, Satishkumar Surendra Shetty, filed a writ petition before the Bombay High Court challenging an order dated 9 February 2017 passed by the Sub-Divisional Officer (Respondent No. 2) under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), and two notices dated 27 March 2017 and 9 February 2021 issued by the Tahsildar/Executive Magistrate (Respondent No. 4) calling upon the petitioner to hand over possession of flats 201 and 301 in Harbansh Apartment, Nerul, Navi Mumbai. The petitioner claimed ownership and possession of the flats. The respondent bank, Kotak Mahindra Bank Ltd., had initiated proceedings under the SARFAESI Act against the borrower, who had mortgaged the property. The petitioner contended that he was not a borrower or guarantor and that the impugned order was passed without any notice to him, violating principles of natural justice. The court examined the facts and found that the petitioner was not served with any notice prior to the passing of the Section 14 order. The court held that the order was unsustainable as it was passed without jurisdiction and in violation of natural justice. Consequently, the court allowed the writ petition, set aside the impugned order and notices, and directed the respondent bank to take appropriate steps in accordance with law, including serving proper notice on the petitioner if it wished to proceed further.
Headnote
A) SARFAESI Act - Section 14 Order - Validity - Service of Notice - The impugned order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was passed without proper service of notice on the petitioner, violating principles of natural justice. The court held that the order and subsequent possession notices were unsustainable and set them aside. (Paras 1-10) B) Writ Petition - Maintainability - Alternative Remedy - The court held that despite the availability of an alternative remedy under Section 17 of the SARFAESI Act, the writ petition was maintainable as the impugned order was passed without jurisdiction and in violation of natural justice. (Paras 11-15)
Issue of Consideration
Whether the impugned order under Section 14 of the SARFAESI Act and the subsequent possession notices are valid when the petitioner was not served with the requisite notices and the order was passed without hearing the petitioner.
Final Decision
The court allowed the writ petition, set aside the impugned order dated 9 February 2017 and the two impugned notices dated 27 March 2017 and 9 February 2021, and directed the respondent bank to take appropriate steps in accordance with law, including serving proper notice on the petitioner if it wished to proceed further.
Law Points
- Section 14 SARFAESI Act
- 2002
- principles of natural justice
- service of notice
- possession notice
- maintainability of writ petition
