Case Note & Summary
The appellant, Modinasab Indikar, filed a first appeal before the High Court of Bombay at Goa against the order of the District Magistrate, Salcete, dated 25.07.2017, passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The appellant claimed to be a tenant of the secured asset, which was mortgaged by the borrowers (respondents 5 and 6) to Indian Overseas Bank (respondents 1 to 3). The borrowers had taken a loan in 2008 and defaulted, leading the Bank to initiate recovery proceedings before the Debts Recovery Tribunal (DRT) and also invoke the SARFAESI Act. The Bank issued a notice under Section 13 of the Act on 24.11.2016, to which the borrowers did not respond. Consequently, the Bank approached the District Magistrate under Section 14, who passed an order on 25.07.2017 directing the Mamlatdar to take possession of the secured asset with police assistance. On 08.09.2017, the Mamlatdar, Bank officials, and police went to the property, but the borrowers informed them that a case had been filed. The appellant, claiming to be a tenant, filed the present appeal challenging the District Magistrate's order. The court noted that the appellant could not identify the fourth respondent (Hannor Pharma) and that the Bank contended the fourth respondent did not exist. The court also observed that the appellant failed to produce any documentary evidence to prove his tenancy. The court held that the remedy under Section 17 of the SARFAESI Act is available to any person aggrieved, including tenants, and the appellant must exhaust that remedy before approaching the civil court or the High Court. The court dismissed the appeal as not maintainable, with liberty to the appellant to pursue the remedy under Section 17 before the DRT.
Headnote
A) Securitisation Act - Section 14 - District Magistrate's Order - Maintainability of Appeal - The appellant, claiming to be a tenant, challenged the order of the District Magistrate under Section 14 of the Securitisation Act directing the Mamlatdar to take possession of the secured asset. The court held that the remedy under Section 17 of the Act is available to any person aggrieved, including tenants, and the appellant must exhaust that remedy before approaching the civil court or the High Court. (Paras 7-10) B) Securitisation Act - Section 17 - Alternative Remedy - Tenant's Rights - The court observed that the appellant failed to produce any documentary evidence to prove tenancy. The court held that the appellant's remedy lies before the Debts Recovery Tribunal under Section 17 of the Securitisation Act, and the appeal is not maintainable. (Paras 7-10) C) Civil Procedure - Maintainability - Alternative Remedy - The court held that when a statutory remedy is available, the appellant cannot bypass it and directly approach the High Court. The appeal was dismissed as not maintainable. (Paras 7-10)
Issue of Consideration
Whether the appellant, claiming to be a tenant, can maintain an appeal against the order of the District Magistrate under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, without exhausting the remedy under Section 17 of the said Act.
Final Decision
The appeal is dismissed as not maintainable. The appellant is at liberty to pursue the remedy under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 before the Debts Recovery Tribunal.
Law Points
- Tenancy claim
- Securitisation Act
- Section 13
- Section 14
- Section 17
- alternative remedy
- maintainability of civil suit
- jurisdiction of DRT
