ASREC (INDIA) LTD. Vs. STATE OF PUNJAB

JUDGEMENT

(1.) The instant petition under Article 226/227 of the Constitution has been preferred by the petitioner Company seeking issuance of a writ for quashing the impugned order dtd. 26/5/2024 (Annexure P-14) passed by respondent No.2, allegedly in violation of the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI Act), with further prayer seeking writ of mandamus directing respondent No.2 to pass order under Sec. 14 of the SARFAESI, Act without entering into any adjudicatory process and in a time bound manner.

(2.) In nutshell, the case of the petitioner is that respondent No.3 through its proprietor respondent No.4 along with respondent No.5 as guarantor had availed extensive credit facilities from Allahabad Bank including different term loans, FITL etc. amounting to Rs.7,97,24,000.00 by mortgaging the property which was under exclusive charge of secured creditor. Since the respondent borrower did not maintain the financial discipline the account was declared Non-Performing Asset (NPA) on 26/6/2013 in accordance with RBI guidelines. Further, the original lender Allahabad Bank invoked measures under SARFAESI Act including demand notice and possession notice under Sec. 13(2) and 13(4) of the Act, respectively. The private respondent-borrower preferred petition before the learned Debt Recovery Tribunal under Sec. 17 of the Act whereas the original lender Allahabad Bank also filed its Original Application under Sec. 19 of the Recovery of Debts and Bankruptcy Act 1993, in OA NO. 767/2017. There is no dispute regarding the mortgage right of the secured creditor over the secured asset as the same stood upheld by the learned Debt Recovery Tribunal-III, Chandigarh vide judgment (Annexure P-4) dtd. 12/7/2017, and accordingly recovery certificate was issued with no challenge till date. The Allahabad Bank preferred an application under Sec. 14 of the Act before the respondent No.2 but the same was declined vide Annexures P-10 to P-14.

(3.) It is averred that the petitioner has entered into Assignment Agreement dtd. 27/2/2018 (Annexure P-1) registered on 16/4/2018 entered into between the original lender Allahabad Bank(now Indian Bank) whereby the financial asset/loan/debt of respondent No.3 has been assigned to the petitioner. The petitioner has therefore stepped into the shoes of original lender, Allahabad Bank, and is in possession of original documents including the title deed of the borrower guarantor. It is averred that on application moved by the petitioner under Sec. 14 of the Act, the Additional District Magistrate, Ludhiana passed impugned order dtd. 26/5/2024 (Annexure P-14) dismissing the application under Sec. 14 of the SARFAESI Act. Hence the petition.