Gupta Hardware Store and others V/s Union of India and others

Gupta Hardware Store and others V/s Union of India and others

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(A) Securitisation and Reconstruction Assets of Financial and Enforcement of Security Interest Act, 2002 Section13(4) and Rule8 of Security Interest (Enforcement) demand Notice Rules, 2002Symbolic possessionQuashing of Notice of possession qua the demised premises

Jurisdiction and Applicability of SARFAESI proceedingsBinding of notificationNBFC issued demand notice of Rs.18,45,198/Whether the financial company is justified in resorting to provisions of SARFAESI Act for recovery of the outstanding dues from the petitioners, when it is lower than the monetary threshold of Rs.20 LacsHeld-NoClaim of the NBFC is less then threshold of Rs. 20 lacs, the proceedings initiated under the SARFAESI Act are not maintainableThat, once the NBFC seek to enforce the claim under the SARFAESI Act, as such, they are bound by the notificationDemand notice under Section 13(2) of the SARFAESI Act, are quashed and set asidePetition allowed. (Paras 18&21)

(B) Constitution of India, 1950 Article226 read with Section-13(4) Securitisation and Reconstruction Assets of Financial and Enforcement of Security Interest Act, 2002MaintainabilityAlternate remedyHeldThat, the when the questions of jurisdiction are raised to the maintainability of any proceedings or pure questions of law arise with respect to existence, exercise of power by any authority/Tribunal created under a statute, then alternate remedy is no bar and is rendered a mere technicalityproceedings initiated under the SARFAESI Act are not maintainable. (Paras 13&14)

Published on
31 January 2025
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09-05-2025
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