Petition of unsustainable appeal adverse processes by banks: SC

Petition of unsustainable appeal adverse processes by banks: SC

A bench of Justices M R Shah and B V Nagarathna, while referring to an earlier judgement delivered by the top court, opined that filing of writ petitions by the borrowers before the HC under Article 226 of the Constitution in the case was an “abuse of process” of the court.

The Supreme Court on Wednesday said borrowers, distressed by procedures started under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI) 2002 by the bank or the assets reproduction organization (ARC), need to benefit the cure under this law and no writ petition would be viable. The apex court held this while vacating the order passed by the Karnataka High Court (HC) which had directed support of status quo with regard to ownership of mortgaged properties subject to the borrowers making an payment of Rs 1 crore with the ARC concerned.

“If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable,” the bench said.

The apex court delivered its judgement on the pleas filed by the ARC challenging the order passed by the HC, which had entertained the writ petition and passed interim order directing for maintaining status quo with regard to the proposed action under the SARFAESI Act.

The bench said the HC orders directing to maintain status quo with respect to possession of secured properties on payment of Rs three crore in all is “absolutely unjustifiable” as the dues are to the extent of approximately Rs 117 crores.

“Filing of the writ petition by the borrowers before the high court is nothing but an abuse of process of court. It appears that the high court has initially granted an ex-parte ad-interim order mechanically and without assigning any reasons,” it said.

“Even otherwise, it is required to be noted that a writ petition against the private financial institution – ARC – appellant herein under Article 226 of the Constitution of India against the proposed action/actions under section 13(4) of the SARFAESI Act can be said to be not maintainable,” the apex court noted.

The bench said the HC ought to have appreciated that by such an interim order, the rights of secured creditor to recover the due amount have been seriously prejudiced.

It said the secured creditor or its assignor have a right to recover the amount due and payable to it from borrowers. “The stay granted by the high court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the high court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters,” the bench said.

Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
Electrolux files $85 million fee related to fourth-quarter tariff case
Electrolux files $85 million fee related to fourth-quarter tariff case
Electrolux will charge $85 million to profit in the final quarter after an appeals panel upheld a U.S. Department of Commerce choice in regards to duties ...
With Current Community Spread, Chances of Finding COVID Positive People Are High |  News
With Current Community Spread, Chances of Finding COVID Positive People Are High | News
That reprieve may be temporary, however, as the next variant, Omicron 2, has already been identified. Little is known about how the mutation will impact ...
For Rs 672 crore, ReNew Power sells 117 MW of its roofing portfolio to Fourth Partner Energy
For Rs 672 crore, ReNew Power sells 117 MW of its roofing portfolio to Fourth Partner Energy
“Strong capital discipline is a core value for ReNew. This sale illustrates the value that can be released through sale of assets and enhances our ability to ...
In the third quarter, Wockhardt reported a net profit of Rs 1.77 crore
In the third quarter, Wockhardt reported a net profit of Rs 1.77 crore
“The objective of the Issue is to, inter alia, meet the company’s financing needs for repayment of subordinated debt due, financing research and development ...
The Xbox Game Pass for Shredders has been leaked on the Microsoft Store
The Xbox Game Pass for Shredders has been leaked on the Microsoft Store
Shredders Xbox Game Pass Release Date Leaked On MS Store 2 The game is coming to PC too, supposedly both on the Windows Store and Steam, but the console ...
Gas stoves impact climate change and public health, study shows
Gas stoves impact climate change and public health, study shows
For nitrogen oxides, or NOx, which pose an especially harmful risk to children and the elderly, Lebel said they found the emissions are directly proportional ...
Second local child dies of COVID-19 |  local news
Second local child dies of COVID-19 | local news
The death comes amid skyrocketing case levels from the fast-spreading omicron variant. Even though deaths among the younger set remain rare, children are ...
The city of Amsterdam has placed a moratorium on the construction of “dark store” distribution centers
The city of Amsterdam has placed a moratorium on the construction of “dark store” distribution centers
However, “with those companies there are also coming a growing number of complaints from the direct neighbourhood.” The spokesperson cited noise and scooter ...
How Brazil is reforming a public fund to finance broadband expansion
Stockton wants to rebrand itself as a ‘business-friendly city’
The plan focuses on rebranding the city, supporting small businesses and attracting new business to the area.  “Telling our story, our rich history here in the ...
Economic indicators flash early warning signal for India's recovery
Economic indicators flash early warning signal for India’s recovery
The reading probably worsened this month as omicron-fueled Covid-19 cases spiked, forcing some Indian states to resort to virus-control measures including ...
Show next
We will be happy to hear your thoughts

Leave a reply

Compsmag - Latest News In Tech and Business
Logo