SARFAESI Act:U/S 17 Aggrieved can approach DRT against District Magistrate’s Order

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July 10, 2018

Case name: Authorized Officer and Chief Manager v. Prafulla Kumar Maheshwari

In the case, the appellant, a secured creditor, invoked the jurisdiction of the District Magistrate under Section 14 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act).  Accordingly an order was passed by the District Magistrate.

The borrower, respondent herein, challenged the said order before the Debts Recovery Tribunal. However, the Tribunal dismissed the respondent’s application holding that an application under Section 17 of SARFAESI Act (provision for appeal) is not maintainable before the Debts Recovery Tribunal.

In appeal, the Single Judge of High Court set aside the District Magistrate’s order but granted liberty to the Bank to file fresh application under Section 14 of SARFAESI Act.

Thereafter, the Division Bench of High Court of Madhya Pradesh while relying on recent judgment in the case Sunil Garg v. Bank of Baroda[1] held that remedy of an aggrieved person against an order passed by District Magistrate is before Debts Recovery Tribunal as provided under Section 17 of SARFAESI Act.

The entire case can be accessed here.

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[1] W.P. No. 19028/2017