ASHOK TIWARI Vs. CANARA BANK

JUDGEMENT

(1.) This petition seeks to challenge the proceedings under Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short 'SARFAESI Act, 2002') initiated by the respondents being SA No.15/2023, before the Additional Chief Metropolitan Magistrate- 01, New Delhi District, Patiala House Courts, New Delhi (in short 'ACMM').

(2.) It is noted that at the instance of respondent No.1-Canara Bank, the proceedings in SA No.15/2023 filed under Sec. 14 of the SARFAESI Act, 2002 have been initiated against the petitioners vide order dtd. 1/2/2023. The learned ACMM appointed Shri Virender Kumar, Advocate as the Receiver to take possession of the mortgaged property i.e. Residential Flat No. E-4/6, Ground Floor, Vasant Vihar, New Delhi.

(3.) Learned senior counsel appearing for the petitioners states that the initiation of the instant proceedings is completely without jurisdiction in as much as the respondents do not fall within the definition of 'secured creditor' as defined under Sec. 2(1) (zd) of the SARFAESI Act, 2002 as the entire debt has already been converted into equity resulting in the entire debt itself being discharged. Therefore, the proceedings under Sec. 14 of SARFAESI Act, 2002 cannot be initiated. He states that petitioner No.3 is the son of petitioner Nos.1 and 2. According to him, petitioner No.1, who is a renowned engineer, had set up the company, namely, M/s Vayam Technologies Limited. The said company was established to provide comprehensive IT services at macro and micro level and has a large clientele throughout the country. For the purpose of expansion of the business, the said company had taken loans from time to time from the respondent-Banks who had formed a consortium. Pertinently, DBS Bank chose to stay out of the consortium. According to him, in the course of business, there were certain delays in payment by some clients to the company and the company went into financial distress. Owing to the same, there were certain lapses in maintaining the time line for repayment of the loans.