KOTAK MAHINDRA BANK LTD Vs. DISTRICT MAGISTRATE

JUDGEMENT

(1.) BY way of this petition under Article 226 of the Constitution, the petitioner a Scheduled Bank within the meaning of Reserve Bank of India Act, 1934 and is holding banking licence under Banking Regulation Act, 1949, seeks to challenge the order dated 3.12.2010 passed by respondent No.1 District Magistrate, whereby the District Magistrate rejected the application preferred by the petitioner Bank under Section 14(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act) and thereby declined to provide necessary assistance and protection to the petitioner bank for taking over the possession of the secured assets of the principal borrower. Facts relevant for the purpose of deciding this petition, can be summarized as under:

(2.) THE petitioner is a Scheduled Bank within the meaning of Section 2(e) of the Reserve Bank of India Act, 1934 and is holding licence to carry out banking business issued by Reserve Bank of India under Section 22 of the Banking Regulation Act, 1949. Respondent No.2 is a partnership firm of which respondent Nos.3 and 4 are partners. THE petitioner bank sanctioned a loan of Rs.30 Lacs to respondent No.2 vide sanction letter dated 24.4.2008. Respondent Nos. 3 to 5 stood as guarantors. Respondent No.5 also offered his immovable property consisting of shops bearing Nos.213 to 220 in premises known as Shah Commercial Center by way of collateral security. Thus respondent Nos. 2 to 5 are borrowers as provided under Section 2(f) of the SARFAESI Act, 2002.

(3.) THE petitioner bank being a secured creditor, is entitled to take possession of the secured assets of borrowers as provided under Section 13(4)(a) of the SARFAESI Act, 2002, preferred an application dated 8.7.2010 under Section 14 of the SARFAESI Act, 2002, to seek assistance of respondent No.1 for the purpose of taking over the possession of the secured assets of respondent No.5.