GOYAL STEELS Vs. UNION OF INDIA

JUDGEMENT

(1.) IN all the above mentioned writ petitions the petitioners raised challenge to the legality and constitutional validity of various provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act"), as well as Rules framed thereunder being The Security Interest (Enforcement) Rules, 2002. All the petitioners are the persons or bodies corporate who had taken financial assistance from various financial institutions. According to the Financial Institutions the petitioners had committed defaults in repayment of their dues. They are in huge defaults. Having not been to recover their dues, they have taken recourse to the provisions and the rules afore-noticed particularly Section 13 of the Act, vide which they have attached the properties and are intended to take possession or sell the said properties, mortgaged and/or hypothecated by way of security to the financial institutions. In some of the cases they have even taken possession of the industrial units.

(2.) THE petitioners are mainly aggrieved from the action of the respondents where in a most arbitrary manner they are taking recourse to the stringent provisions of the Act and or even dispossessing the petitioners or their family members from possession of the residential houses.

(3.) IN C.W.P. No. 4387 of 2003, even the averments have been made that the petitioners had not executed any documents mortgaging the properties in question in favour of the financial institutions. In fact the documents have been created by the institutions in a most improper manner. It is submitted that the respondents are playing a fraud upon the statute by taking recourse to such provisions which are unguided and unfettered. It is also the case of the petitioners that no guide-lines have been provided by the Union of India and or/Reserve Bank of India for exercise of arbitrary powers vested in the nominated authority/officer.