KANAIYALAL LALCHAND SACHDEV AND ORS. versus STATE OF MAHARASHTRA AND ORS.

Citation: [2011] 2 S.C.R. 602 · Decided: 07-02-2011 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Dismissed
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Judgment (excerpt)

A 
B 
[2011] 2 S.C.R. 602 
KANAIYALAL LALCHAND SACHDEV AND ORS. 
v. 
STATE OF MAHARASHTRA AND ORS. 
(Criminal Appeal Nos.338-340 of 2011) 
FEBRUARY 7, 2011 
[D.K. JAIN AND H.L. DATIU, JJ.] 
Securitization and Reconstruction of Financial Assets and 
Enforcement of Security Interest Act, 2002: s. 17 - Default in 
C repayment of secured debt - Notice issued u/s. 13(2) to 
borrower to discharge liability -Application u/s. 14 by secured 
creditor before Magistrate for taking possession of mortgaged 
properties, allowed - Writ petition by borrower/ guarantors 
before High Court, dismissed on the ground that an 
D alternative remedy was available to them uls. 17 - On appeal, 
held: s.13(4) provides that if borrower fails to discharge his 
liability within the period specified in s. 13(2) then secured 
creditor may take recourse to action to recover his debt -
Secured creditor may, in order to enforce his rights uls.13(4) 
E take recourse to s. 14 of the Act - An action u/s. 14 constitutes 
an action taken after the stage of s.13(4), and, therefore, the 
same would fall within the ambit of s.17(1) - Thus, the Act 
itself contemplates an efficacious remedy for the borrower or 
any person affected by an action u/s. 13(4) by providing for an 
F appeal before the DRT - Ordinarily relief under Articles 2261 
227 of the Constitution is not available if an efficacious 
alternative remedy is available to any aggrieved person -
Therefore, High Court was fully justified in declining to 
exercise its jurisdiction under Articles 226 and 227 of the 
G Constitution - Constitution of India, 1950 - Articles 226 and 
227. 
Respondent no.3 had a.dvanced a loan amount of Rs. 
4.50 crores to appellant no.6 on an equitable mortgage 
by deposit of title deeds of certain properties. Appellant 
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602 
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KANAIYALAL LALCHAND SACHDEV AND ORS. v. 
oU3 
STATE OF MAHARASHTRA AND ORS. 
Nos.1 to 5 were the guarantors. Respondent no.3. issued 
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a notice under Section 13(2) of the Securitization and 
Reconstruction of Financial Assets and Enforcement of 
Security Interest Act, 2002. Thereafter, respondent no.3 
filed an application before the Chief Metropolitan 
Magistrate under Section.14 of the Act for taking 
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possession of the mortgaged properties. The Magistrate 
allowed the said application and directed the Assistant 
· Registrar to take possession of the mortgaged properties 
after issuing notice to the appellants. 
Aggrieved by such notice issued by the Assistant C 
Registrar, the appellants filed a writ petition before the 
High Court. The writ petition was dismissed on the 
ground that an alternative remedy was available to the 
appellants under Section 17 of the Act. The High Court 
also directed the respondents to maintain status quo in D 
the matter for a period of 10 weeks from the date of Its 
order, so as to enable the appellants to approach the 
Debt Recovery Tribunal under Section 17 of the Act. 
The appellants flied an application before the High 
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Court seeking an extension of the status quo period. The 
High Court rejected the said application. The Instant 
appeals were filed challenging the orders whereby the 
writ petition and the application were dismissed. 
Dlsmi~~lng the appeals, the Cciurt 
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HELD: 1.1. Section 13 of the Securltlsatlon and 
Reconstruction of Financial Assets- and Enforcement of 
Security Interest Act, 2002 deals with enforcement of 
security Interest, providing that notwithstanding 11hythlng G 
contained In Sections 69 or 69A of the Transfer of 
Property Act, 18lJ2, any security Interest created In favour 
of any secured credifor may be enforced, without the 
court's Intervention, by such creditor In accordance with 
H 
604 
SUPREME COURT REPORTS 
[2011] 2 S.C.R. 
A the provisions of the Act. Section 13(2) of the Act _ 
provides that when a borrower, who is under a liability 
to a secured creditor, makes any default in repayment of 
secured debt, and his account in respect of such debt is 
classified as non-performing asset, then the secured 
s creditor may require the borrower, by notice in writing, 
to discharge his liabilities within sixty days from the date 
of the notice, failing which the secured creditor shall be 
entitled to exercise all or any of the rights given in Section 
13(4) of the Act. Sectio1113(3) of the Act provides that the 
c notice under Section 13(2) of the Act shall give details of 
the amount payable by the borrower as ~lso the details 
of the secured assets intended to be enforced
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