Decide on bank’s plea seeking assistance in 30 days, Himachal DMs told

Legal Correspondent

Advertisement

Shimla, December 20

The HP High Court has directed the District Magistrates of the state to decide the applications filed by the bank for seeking assistance in taking over possession of the secured assets under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest 2002, Act within 30 days. It further clarified in its order the period can be extendable up to 60 days but only after recording reasons for delay.

The court passed this order on petitions filed by the State Bank of India alleging therein that while deciding the applications of the bank for seeking assistance in taking over possession of the secured assets, the District Magistrates are not complying with the mandatory provisions of the Act.

Allowing the petitions, a division bench comprising Justice Tarlok Singh Chauhan and Justice Bipin Chander Negi further observed, “We find that the District Magistrates under Section 14 of the Act claim powers, which they do not possess or enjoin and proceed to pass orders, which are not only contrary to provisions of Section 14, but void ab initio and against the very object and purpose of the Act.

While passing this order the court further observed that “however, the matter cannot be left to rest here, for our experience has been otherwise as we find that in several cases, that have come before the court, the District Magistrates are disposing of applications under Section 14 of the Act without granting assistance to secure creditors in recovering possession of their secured assets and what is still worse is that the District Magistrates are granting relief (s) directly or indirectly to borrowers or third parties in flagrant and blatant violation of law, more particularly, when the borrowers or third parties have not even contested the steps taken by the secured creditors under Section 13 of the Act for enforcement of their securing interest by filing any application before the concerned Debt Recovery Tribunal (DRT) under Section 17 of the Act.”

It further observed that “It is high time that the District Magistrates put their respective houses in order.”

The court further ordered that the copy of this order be sent to the Chief Secretary for onward circulation to all the District Magistrates and the authorities concerned.