Writ Petition No. 7543 of 2010. Case: Housing Development Finance Corporation Ltd. (HDFC Ltd.) Vs State of Maharashtra and Ors. High Court of Bombay (India)
| Case Number | Writ Petition No. 7543 of 2010 |
| Counsel | For Petitioner: Atul Daga with Ms. Jyoti Ghag and Nikhil Mengde i/b M/s. Thakore Jariwala and Associates and For Respondents: R. P. Behre, AGP |
| Judges | Dr. D. Y. Chandrachud, J. and A. A. Sayed , J. |
| Issue | Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (54 of 2002) - Section 14 |
| Citation | AIR 2012 Bom 19 |
| Judgement Date | August 30, 2011 |
| Court | High Court of Bombay (India) |
Judgment:
Dr. D. Y. Chandrachud, J.
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These proceedings under Article 226 of the Constitution have been instituted by the Housing Development Finance Corporation Ltd., which is a financial institution within the meaning of Section 2(1)(m)(iv) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, read with a notification dated 10 November, 2003 issued by the Union Government in the Ministry of Finance (Department of Economic Affairs Banking Division). The petitioner during the course of its business has disbursed housing loans. The loans are secured inter alia by mortgage of immovable properties and the petitioner claims to have an enforceable security interest.Upon a default by a borrower, the loan account is classified as a non-performing asset.Under the Act, which was enacted by Parliament in 2002, statutory provisions have been enacted to provide a speedy mechanism for the recovery of amounts due to financial institutions without the intervention of the Court.
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Section 14 of the Act empowers the secured creditor to move the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction a secured asset or other documents relating thereto may be situated to take possession of a secured asset, if the asset is required to be sold or transferred under the provisions of the Act. The second and third respondents are District Magistrates respectively at Thane and Raigad, who have been vested with the responsibility of discharging functions under Section 14.
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The petitioner invoked the provisions of Section 13(2) against several borrowers. Despite repeated notices, the borrowers having failed and neglected to repay the dues, the petitioner sought to initiate measures under Section 13(4), but was unable to do so as a result of resistance offered by the borrowers, or as the case may be, occupants of immovable properties. Accordingly, second and third respondents were moved for initiating action under Section 14. It has been averred that the petitioner furnished copies of the loan documents, title deeds/documents in support of the creation of mortgage and of the demand notices issued under Section 13(2) together with postal acknowledgment cards and newspaper publication, with each application. At Exhibit "B" to the petition is a list of applications which have been filed under Section 14. Exhibit 'D' is tabulated statement containing a list of applications which are...
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