PHOENIX ARC PVT. LTD. Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The present Writ Petition impugns an order dtd. 27/8/2021 ("impugned order") passed by Respondent No.1 (Additional District Magistrate, Nashik) in an application filed by Petitioners under Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act') seeking assistance of Respondent No.1 to recover possession of the properties mortgaged ("secured asset") by Respondent Nos. 3 to 8 (Borrowers) in favour of Petitioner. By the impugned order not only has Respondent No.1 failed and neglected to assist Petitioner in recovering possession of the secured asset, but has effectively granted relief in favour of Borrowers and Respondent No.2 (a Third Party).

(2.) We are constrained to note that the impugned order is yet another instance of the Designated Authorities ("DA") under Sec. 14 of the SARFAESI Act not only failing and/or neglecting to exercise the jurisdiction vested in them under Sec. 14 of the SARFAESI Act, but instead, and regrettably acting in excess of the jurisdiction vested in them under Sec. 14 and also contrary to Sec. 14 of the SARFAESI Act. We find that such conduct on the part of the DA is now common place and is being impugned repeatedly before this Hon'ble Court. This is despite the fact that the scope of Sec. 14 as also the jurisdiction of the DA thereunder is not only clear from a plain reading of Sec. 14 but has since been emphasized in several judgements of the Hon'ble Supreme Court as well as this Hon'ble Court. Before we advert to the same, it is necessary to set out the facts of the present case leading upto the passing of the Impugned Order.

(3.) In or about September 2014, Borrowers had approached one Religare Finvest Limited ('Religare') for a loan of Rs.6.00 Crores. Religare by its sanction letter dtd. 30/9/2014 issued the said loan to Borrowers. The said loan was secured by a registered mortgage created by Borrowers in favour of Religare in respect of the following properties, i.e., the secured assets :-