Arbitrator Has No Jurisdiction To Set Aside Sale Notice Issued By Secured Creditor Under Section 13(4) Of SARFAESI Act: Delhi High Court
1 year, 10 months ago

Arbitrator Has No Jurisdiction To Set Aside Sale Notice Issued By Secured Creditor Under Section 13(4) Of SARFAESI Act: Delhi High Court

Live Law  

The Delhi High Court has ruled that the Arbitrator has no jurisdiction to set aside the sale notice issued by the secured creditor under Section 13 of the SARFAESI Act, 2002, seeking to enforce its “security interest”. Since a specific right is vested in a “secured creditor” to enforce a “security interest”, by issuance of a sale notice under Section 13 of the SARFAESI Act, that specific right cannot be ousted by an order made by an arbitral tribunal, the Court held. The Court thus concluded that since a specific right is vested in a “secured creditor” to enforce a “security interest”, by issuance of a sale notice under Section 13 of the SARFAESI Act, that specific right cannot be ousted by an order made by an arbitral tribunal. Noting that the respondents have a specific remedy under Section 17 of the SARFAESI Act before a specialised tribunal, i.e., the DRT, against the sale notice issued under Section 13, the Court said that the doctrine of election is not available to a party to choose between the DRT or the arbitral tribunal, as a forum to oppose enforcement of the security interest.

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History of this topic

Mere Possession Over Assets Of Corporate Debtor Under SARFAESI Act Does Not Bar Filing Of Petition U/S 7 Of IBC: NCLT Kolkata
3 weeks, 5 days ago

Mere Possession Over Assets Of Corporate Debtor Under SARFAESI Act Does Not Bar Filing Of Petition U/S 7 Of IBC: NCLT Kolkata

Live Law  

The NCLT Kolkata bench of Ms. Bidisha Banerjee and Shri Arvind Devanathan have held that mere possession over assets of the corporate debtor under the SARFAESI Act does not prevent the financial creditor from preferring an application under section 7 of the IBC. Whether Mere Possession Of Assets Of The Corporate Debtor Under SARFAESI Act Bars Filing Of Petition Under …

Mere Possession Over Assets Of Corporate Debtor Under SARFAESI Act Does Not Bar Filing Of Petition U/S 7 Of IBC: NCLT Kolkata
3 weeks, 5 days ago

Mere Possession Over Assets Of Corporate Debtor Under SARFAESI Act Does Not Bar Filing Of Petition U/S 7 Of IBC: NCLT Kolkata

Live Law  

The NCLT Kolkata bench of Ms. Bidisha Banerjee and Shri Arvind Devanathan have held that mere possession over assets of the corporate debtor under the SARFAESI Act does not prevent the financial creditor from preferring an application under section 7 of the IBC. Whether Mere Possession Of Assets Of The Corporate Debtor Under SARFAESI Act Bars Filing Of Petition Under …

Property Of Personal Guarantors Cannot Be Sold Under SARFAESI Act During Moratorium Period U/S 96 Of IBC: NCLT Mumbai
1 month ago

Property Of Personal Guarantors Cannot Be Sold Under SARFAESI Act During Moratorium Period U/S 96 Of IBC: NCLT Mumbai

Live Law  

The NCLT Mumbai bench of Mr. Charanjeet Singh Gulati and Justice Lakshmi Gurung has held that once a petition under section 95 of the IBC is filed, the interim moratorium under section 96 is triggered. Brief Facts This application has been filed by, Raghavendra Joshi under Section 60 r/w Section 60 of the Insolvency and Bankruptcy Code, 2016 read with …

[SARFAESI Act] Nature Of Secured Asset Continues To Remain Same Even After Being Purchased By Secured Creditor: Kerala High Court
5 months, 2 weeks ago

[SARFAESI Act] Nature Of Secured Asset Continues To Remain Same Even After Being Purchased By Secured Creditor: Kerala High Court

Live Law  

The Kerala High Court held that a 'secured asset' continues its nature of 'secured asset' even after it is bought by the secured creditor. High Court held that this would mean that the character of the property as a 'secured asset' will continue for the purpose of the SARFAESI Act. The High Court referred to ITC Limited v Blue Coast …

Consumer Commission Has No Jurisdiction To Entertain Matters Coming Under Purview Of SARFAESI Act: Orissa High Court
5 months, 3 weeks ago

Consumer Commission Has No Jurisdiction To Entertain Matters Coming Under Purview Of SARFAESI Act: Orissa High Court

Live Law  

The Orissa High Court has held that the Consumer Commissions do not have jurisdiction to entertain any suit or proceeding which is subject matter of adjudication by Debt Recovery Tribunal or Appellate Tribunal under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Clarifying the jurisdictional issue, the Division Bench of Justice Debabrata Dash and …

[S.14 SARFAESI Act] District Magistrates Can't Adjudicate On Application For Taking Possession Of Secured Assets, Constantly Breaching Law: Punjab & Haryana HC
7 months, 4 weeks ago

[S.14 SARFAESI Act] District Magistrates Can't Adjudicate On Application For Taking Possession Of Secured Assets, Constantly Breaching Law: Punjab & Haryana HC

Live Law  

The Punjab & Haryana High Court has made it clear that the District Magistrate under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is only an executing functionary and not empowered to make any adjudication on the application made by the creditors for taking possession of the secured assets.Observing. The Punjab …

Defaulter Can't Initiate Criminal Proceedings Against Creditor/Auction Purchaser Against Auction Held Under SARFAESI Act, Must Go To DRT: Allahabad High Court
8 months ago

Defaulter Can't Initiate Criminal Proceedings Against Creditor/Auction Purchaser Against Auction Held Under SARFAESI Act, Must Go To DRT: Allahabad High Court

Live Law  

While quashing criminal proceedings against officers of M/s Himri Estate Private Limited and Indiabulls Housing Finance Ltd. initiated by Shipra Group, the Allahabad High Court held that defaulter cannot initiate criminal proceedings against creditor/auction purchaser against the auction conducted under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Criminal proceedings cannot be …

Secured Creditor Registered With CERSAI Will Have Precedence Over VAT Authorities Against Proceeds Of Enforcement: Bombay HC
8 months, 3 weeks ago

Secured Creditor Registered With CERSAI Will Have Precedence Over VAT Authorities Against Proceeds Of Enforcement: Bombay HC

Live Law  

The Bombay High Court recently clarified that in a sale of a mortgaged asset, where the mortgage in favour of a secured creditor is registered prior in time with CERSAI, and the MVAT Authorities too have a charge, the proceeds of the enforcement of the mortgage would first go towards discharging the dues owed to the secured creditor. Colabawalla observed …

SARFAESI Act | Right Of Redemption Cannot Be Taken Away By Insufficient Notice: Allahabad High Court
11 months, 1 week ago

SARFAESI Act | Right Of Redemption Cannot Be Taken Away By Insufficient Notice: Allahabad High Court

Live Law  

The Allahabad High Court has held that right of redemption under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is an important right which cannot be taken away or breached by the authorities by insufficient notice. While observing that it is settled law that service of notice upon the borrower is mandatory under Rule …

SARFAESI Act | MP High Court Issues Guidelines To Magistrates For Expeditious Disposal Of S.14 Applications Moved By Secured Creditors
1 year ago

SARFAESI Act | MP High Court Issues Guidelines To Magistrates For Expeditious Disposal Of S.14 Applications Moved By Secured Creditors

Live Law  

Madhya Pradesh High Court has recently taken serious note of the inaction by Chief Judicial Magistrates on applications under Section 14 of the SARFAESI Act. While allowing the application filed by the secured creditor, the court also underscored that there are only two aspects that a Chief Judicial Magistrate must consider before passing an order u/S 14 of the SARFAESI …

SARFAESI Act | As per Unamended S.13(8), Borrower Has Right To Redeem Available Till Sale Certificate Is Registered & Possession Is Handed Over : Supreme Court
1 year, 2 months ago

SARFAESI Act | As per Unamended S.13(8), Borrower Has Right To Redeem Available Till Sale Certificate Is Registered & Possession Is Handed Over : Supreme Court

Live Law  

The Supreme Court, while deciding an appeal, settled the issue of right of redemption of a mortgaged property by a borrower under the unamended Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. The Bench comprising of Justices Vikram Nath and Rajesh Bindal clearly held that as per the unamended Section 13 …

SARFAESI Act No License For Bank Officers To Act Against Law : Supreme Court
1 year, 3 months ago

SARFAESI Act No License For Bank Officers To Act Against Law : Supreme Court

Live Law  

In a recent judgement, the Supreme Court underlined that all litigants, including banks, were duty bound to follow provisions of law and that banks would not be treated on a different footing than other litigants. The Court said that the the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 does not give any "license to …

Borrowers Should Avail Statutory Remedies Under SARFAESI Act Before Invoking Article 226 Against Recovery Proceedings: Delhi High Court
1 year, 4 months ago

Borrowers Should Avail Statutory Remedies Under SARFAESI Act Before Invoking Article 226 Against Recovery Proceedings: Delhi High Court

Live Law  

The Delhi High Court recently observed that the SARFAESI Act provides statutory remedies for borrowers, including the right to appeal, and that the court should not interfere in recovery proceedings unless there is a clear violation of law. Justice Purushaindra Kumar Kaurav reiterated that the borrower will have to wait till measures under Section 13 of the SARFAESI Act for …

Priority Of The Secured Creditor Over Govt. Dues Under SARFAESI Act, 2002: Bombay High Court
1 year, 5 months ago

Priority Of The Secured Creditor Over Govt. Dues Under SARFAESI Act, 2002: Bombay High Court

Live Law  

The Bombay High Court held that priority belongs to the secured creditor in respect of the dues of the Central government, state government, or local authority under Section 26-E of the SARFAESI Act, 2002.The bench of Justice B. P. Colabawalla and Justice M.M. The Bombay High Court held that priority belongs to the secured creditor in respect of the dues …

Challenge To Recovery Notice U/S 13(2) SARFAESI Act Lies Before DRT And Not Civil Court, Unless Plaint Alleges Fraud: Bombay High Court
1 year, 6 months ago

Challenge To Recovery Notice U/S 13(2) SARFAESI Act Lies Before DRT And Not Civil Court, Unless Plaint Alleges Fraud: Bombay High Court

Live Law  

The Bombay High Court recently held that once a secured creditor issues demand notice under section 13 of the SARFAESI Act, 2002, the civil court’s jurisdiction is barred, and any challenge to the notice comes under the domain of the Debts Recovery Tribunal. Justice MS Jawalkar rejected a borrower’s civil suit alleging that the bank violated Guidelines on Fair Practices …

Merely Because The Borrower Is An MSME, It Would Not Be Governed By The Arbitral Mechanism Provided Under MSMED Act: Gujarat High Court
1 year, 9 months ago

Merely Because The Borrower Is An MSME, It Would Not Be Governed By The Arbitral Mechanism Provided Under MSMED Act: Gujarat High Court

Live Law  

The Gujarat High Court has ruled that merely because the borrower is an MSME, it would not be governed by the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, including the arbitral mechanism envisaged under the said Act. The bench of Justice Biren Vaishnav observed that though, as per the mechanism provided under the MSMED Act, the …

Challenge Under Section 17 Of The SARFAESI Act Against Action Taken By Secured Creditor, Would Not Bar Arbitration Proceedings: Delhi High Court
2 years, 1 month ago

Challenge Under Section 17 Of The SARFAESI Act Against Action Taken By Secured Creditor, Would Not Bar Arbitration Proceedings: Delhi High Court

Live Law  

The Delhi High Court has reiterated that arbitration proceedings and proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests Act, 2002 can go hand in hand. The single bench of Justice V. Kameswar Rao held that even if a party intended to take action under Section 17 of the SARFAESI Act by filing a petition …

Bar On Civil Court Jurisdiction U/Sec 34 SARFAESI Applicable Only In A Case Where DRT/DRAT Is Empowered To Decide The Matter: Supreme Court
2 years, 1 month ago

Bar On Civil Court Jurisdiction U/Sec 34 SARFAESI Applicable Only In A Case Where DRT/DRAT Is Empowered To Decide The Matter: Supreme Court

Live Law  

The Supreme Court observed that the bar on Civil Court jurisdiction under section 34 of the SARFAESI Act shall be applicable only in a case where the Debt Recovery Tribunal and/or Appellate Tribunal is empowered to decide the matter under the SARFAESI Act.In this case, the Bank secured a property in exercise of powers under the provisions of the SARFAESI …

Initiation Of Proceedings Under The SARFAESI Act Does Not Bar The Arbitration Of Disputes: Delhi High Court
2 years, 2 months ago

Initiation Of Proceedings Under The SARFAESI Act Does Not Bar The Arbitration Of Disputes: Delhi High Court

Live Law  

The Delhi High Court has ruled that the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 provides a remedy in addition to the adjudication under the Arbitration and Conciliation Act, 1996 and hence, initiation of proceedings under the SARFAESI Act does not bar the arbitration of disputes. The petitioners invoked the arbitration …

'Not Manifestly Arbitrary': Delhi High Court Upholds Constitutional Validity Of Chapter II Of SARFAESI Act
2 years, 2 months ago

'Not Manifestly Arbitrary': Delhi High Court Upholds Constitutional Validity Of Chapter II Of SARFAESI Act

Live Law  

The Delhi High Court has upheld the constitutional validity of Chapter II of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 observing that it is not manifestly arbitrary and is not in violation of Article 14 of the Constitution of India.A division bench of Chief Justice Satish Chandra Sharma and Justice Subramoniuam Prasad passed. …

[S.14 SARFAESI Act] Jurisdiction Of DM Purely Ministerial In Nature; Not Empowered To Hear Borrower/ Third Parties: Bombay High Court
2 years, 3 months ago

[S.14 SARFAESI Act] Jurisdiction Of DM Purely Ministerial In Nature; Not Empowered To Hear Borrower/ Third Parties: Bombay High Court

Live Law  

Observing that the jurisdiction of the District Magistrate is limited only to assisting secured creditors in taking possession of secured assets under the SARFAESI Act, the Bombay High Court held that the DM isn't empowered to hear the borrower or third parties while deciding application filed by secured creditor. "The jurisdiction of the CMM/DM under Section 14 of the SARFAESI …

Claim Of Secured Creditor Under SARFAESI Act Not Affected By Attachment Under Karnataka Protection Of Deposits Act: High Court
2 years, 4 months ago

Claim Of Secured Creditor Under SARFAESI Act Not Affected By Attachment Under Karnataka Protection Of Deposits Act: High Court

Live Law  

The Karnataka High Court has held that the attachment of a secured asset under the Karnataka Protection of Interest of Deposit in Financial Establishment Act, 2004, would have no priority over the claim of the Bank, to recover dues made under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. A single judge bench of …

Quantum Of Debt Not To Be Decided At The Stage Of Admission Of A Section 7 Petition Under IBC: NCLAT,Delhi
2 years, 8 months ago

Quantum Of Debt Not To Be Decided At The Stage Of Admission Of A Section 7 Petition Under IBC: NCLAT,Delhi

Live Law  

The National Company Law Appellate Tribunal Bench comprising of Justice Ashok Bhushan, Dr. Alok Srivastava and Ms. Shreesha Merla, while adjudicating an appeal filed in the matter of Rajesh Kedia v Phoenix ARC Pvt. 1 issued a Demand Notice dated 09.02.2016 to the Corporate Debtor under Section 13 of the SARFAESI Act, 2002, demanding an amount of Rs. 1 had …

Arbitral Award Is To Be Executed At A Place Where Judgment Debtor Resides, Carries Business Or Has Assets: Delhi High Court
2 years, 10 months ago

Arbitral Award Is To Be Executed At A Place Where Judgment Debtor Resides, Carries Business Or Has Assets: Delhi High Court

Live Law  

The Delhi High Court recently dismissed an execution petition filed under Section 36 of the Arbitration & Conciliation Act by a Decree Holder for an arbitral award because the the Judgment Debtor was carrying out its business in Chennai and it did not have any office or asset within Delhi jurisdiction. The affidavit of assets filed by the Judgement Debtor …

SARFAESI Proceedings Not Invalidated On Mere Failure Of Bank In Giving Reply To Objections If Borrower's Proposals Were Otherwise Considered : Supreme Court
3 years ago

SARFAESI Proceedings Not Invalidated On Mere Failure Of Bank In Giving Reply To Objections If Borrower's Proposals Were Otherwise Considered : Supreme Court

Live Law  

The Supreme Court held that failure to furnish reply by the creditor as per the mandate of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 would not entitle the debtor of discretionary relief, if the Court is satisfied that the creditor has considered the debtor's representation and granted it sufficient opportunity …

Whether PMLA Prevails Over SARFAESI Act? Supreme Court To Hear SBI's Plea On October 20
3 years, 2 months ago

Whether PMLA Prevails Over SARFAESI Act? Supreme Court To Hear SBI's Plea On October 20

Live Law  

The Supreme Court will hear on October 20th plea filed by State Bank of India challenging the Punjab and Haryana High Court's decision that Prevention Of Money Laundering Act prevails over the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act A Bench comprising Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice. The Supreme Court will hear …

DRT Cannot Adjudicate Civil Rights Claimed Vis-a-Vis Security Interest Which Are Outside Sec 13/17 SARFAESI : Bombay High Court
3 years, 8 months ago

DRT Cannot Adjudicate Civil Rights Claimed Vis-a-Vis Security Interest Which Are Outside Sec 13/17 SARFAESI : Bombay High Court

Live Law  

A division bench of the Bombay High Court has delivered an elaborate judgment on the issue of the jurisdiction of the civil courts vis-a-vis the Debts Recovery Tribunal with respect to the security interest under the SARFAESI Act.A division bench comprising Justices SB Shurke and Avinash G Gharote was deciding the following question which was referred to in view of …

[SARFAESI] Time Limit Stipulation For District Magistrates To Deliver Possession Of Secured Asset Is Not Mandatory: Supreme Court [Read Judgment]
4 years, 1 month ago

[SARFAESI] Time Limit Stipulation For District Magistrates To Deliver Possession Of Secured Asset Is Not Mandatory: Supreme Court [Read Judgment]

Live Law  

The Supreme Court has held that time limit stipulation in Section 14 of the SARFAESI Act mandating the District Magistrate to deliver possession of a secured asset, is directory and not mandatory and that the inability to take possession within time limit does not render the District Magistrate Functus Officio.The bench comprising Justices L. Nageswara Rao, Hemant Gupta and Ajay …

Trivial Procedural Lapses Not A Ground To Nullify SARFAESI Proceedings Initiated By Secured Creditor If No Substantial Prejudice Was Caused To Borrower: SC [Read Judgment]
4 years, 1 month ago

Trivial Procedural Lapses Not A Ground To Nullify SARFAESI Proceedings Initiated By Secured Creditor If No Substantial Prejudice Was Caused To Borrower: SC [Read Judgment]

Live Law  

The Supreme Court has observed that proceedings initiated under the SARFAESI Act by the Secured Creditors cannot be nullified merely on the ground of technical defects and procedural lapses unless substantial prejudice was caused to the defaulter. In this case, the Debt Recovery Tribunal quashed the demand notice served on the borrower under Section 13 of the Securitisation and Reconstruction …

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