{"id":272627,"date":"2022-08-30T11:00:29","date_gmt":"2022-08-30T05:30:29","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=272627"},"modified":"2022-08-30T11:00:29","modified_gmt":"2022-08-30T05:30:29","slug":"bombay-hc-s-14-sarfaesi-act-empowers-designated-authority-assist-secured-creditors-possession-secured-assets-legal-updates","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/08\/30\/bombay-hc-s-14-sarfaesi-act-empowers-designated-authority-assist-secured-creditors-possession-secured-assets-legal-updates\/","title":{"rendered":"Bombay High Court| S. 14 of SARFAESI Act empowers the Designated Authority only to assist secured creditors in taking possession of secured assets and nothing more"},"content":{"rendered":"
\n

\n

Bombay High Court<\/span>: While deciding the instantwrit petition wherein the issue was regarding transgression of Additional District Magistrate’s jurisdiction under Section 14 of the SARFAESI Act; the Division Bench of A.S. Doctor and K.R. Shriram, JJ., observed that the jurisdiction of the Designated Authority under Section 14 of the SARFAESI Act is purely ministerial and limited only to assisting secured creditors in taking possession of secured assets and nothing more. \u201cSection 14 of the SARFAESI Act does not contemplate much less empower the DA to even consider much less adjudicate upon any objections raised by Borrower or anybody else<\/i>\u201d.<\/p>\n

Brief Facts<\/span>– In September 2014, the borrowers approached one Religare Finvest Limited for Rs.6 crore loan and the same was issued by the Religare on 30-09-2014. Subsequently, borrowers committed defaults in repayment of the said loan and hence, Religare declared the borrowers’ account as a Non-Performing Asset. Thereafter, they issued a notice on 31-03-2018 under Section 13(2) of the SARFAESI Act, entreating borrowers to pay the amount within sixty days.<\/p>\n

Later, in September 2018, Religare assigned all its rights to Phoenix ARC (P) Ltd., (the petitioner) by a deed of assignment .A second SARFAESI notice was sent to the borrowers, however, the borrowers in reply denied their liability.<\/p>\n

Petitioner filed an application under Section 14 of SARFAESI Act seeking the assistance of the Additional District Magistrate, Nashik for taking the physical possession of the secured assets. On 10-08-2020, the second respondent who was a tenant at secured asset premises of the company, intervened the proceedings. The ADM via his Order dated 27-08-2021, declined to assist the petitioner and ordered that further orders regarding possession and mortage would be decided after the termination of tenancy rights of the second respondent. .<\/p>\n

Aggrieved with the afore-stated Order, the petitioner approached the High Court.<\/p>\n

Contentions<\/span>: The Petitioner contended that the ADM’s order was in excess of jurisdiction under Section 14 of the SARFAESI Act. It was sumbitted that Section 14 was only limited to assisting the secured creditors to obtain the secured assets and nothing more.<\/p>\n