Give details of pending cases under SARFAESI Act, Additional CS told

Saurabh Malik

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Chandigarh, June 2

Taking cognisance of the alleged delay by the district magistrates in executing proceedings under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, the Punjab and Haryana High Court has called for district-wise details in the matter from the Haryana Additional Chief Secretary.

Empowering banks to recover NPAs

• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act was formulated with intent to empower the banks to recover non-performing assets (NPAs) without the intervention of a court
• The Act allows the banks and other financial institutions to auction commercial or residential properties to recover a loan, when a borrower fails to repay the amount
• Section 14 of the Act provides for judicial assistance to the creditors in enforcing their security interest

He has been asked to specify the number of matters pending for more than four months. The Bench has also sought the reasons for the delay. The direction by Justice Deepak Sibal of the HC is significant as the SARFAESI Act was formulated with intent to empower the banks to recover non-performing assets without the intervention of a court.

Among other things, the Act allows the banks and other financial institutions to auction commercial or residential properties to recover a loan, when a borrower fails to repay the amount. Section 14 of the Act provides for judicial assistance to the creditors in enforcing their security interest.

The direction by Justice Sibal came on a petition filed against a district magistrate and other respondents by HDFC Bank Ltd. through counsel Abhinav Sood. As the matter came up for preliminary hearing before the Bench, Justice Sibal issued notice of motion to the respondents, while fixing the case for further hearing on July 31.

Accepting the notice, the state counsel prayed for time to file a reply in the matter.

Before parting with the case, Justice Sibal observed several cases were coming up before the HC, in which there were complaints of unnecessary delay by the district magistrates concerned in executing proceedings under Section 14 of the Act.

“Let the Additional Chief Secretary, Department of Revenue, Government of Haryana, file an affidavit as to how many matters, after culmination of proceedings under Section 14 of the Act, are pending in each district of Haryana and where the same have been pending beyond four months. The affidavit shall also contain reasons for such delay,” Justice Sibal asserted in his detailed order.