Hon'ble Judges/Coram:
Rohinton Fali Nariman and Navin Sinha

JUDGMENT

Rohinton Fali Nariman, J.

1. Leave granted.

2. These matters come to us from a Full Bench judgment of the Allahabad High Court dated 06.02.2018. By an order of reference dated 19.09.2017, a learned Single Judge noticed divergent opinions expressed by two different Benches of the Allahabad High Court on the question whether an application Under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as the "SARFAESI Act" or the "Act"), at the instance of a borrower, is maintainable even before physical or actual possession of secured assets is taken by banks/financial institutions in exercise of their powers Under Section 13(4) of the Act read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the "2002 Rules"). After discussing the various provisions of the Act, the 2002 Rules and judgments of the Supreme Court, the Full Bench summarised the true legal position according to it as follows:

29. The upshot of legal position that emerges from the judgments of the Supreme Court, insofar as the question referred to for our consideration is concerned, briefly stated, is as under:

(a) The remedy of an application Under Section 17(1) is available only after the measures Under Section 13(4) have been taken by the Bank/FIs against the borrower.

(b) The issue of notice Under Section 13(2) to the borrower and communication contemplated by Section 13(3-A) stating that his representation/objection is not acceptable or tenable, does not attract the application of principles of natural justice. In other words, no recourse to an application Under Section 17(1), at that stage, is available/maintainable.

(c) The borrower/person against whom measures Under Section 13(4) of the Act are likely to be taken, cannot be denied to know the reason why his application or objections have not been accepted, as a fulfilment of the requirement of reasonableness and fairness in dealing with the same.

(d) One of the reasons for providing procedure Under Section 13(4) read with Rule 8 for taking possession is that the borrower should have a clear notice before the date and time of sale/transfer of the secured assets, in order to enable him to ........