Jasti Chelameswar JUDGMENT
Jasti Chelameswar, J.
1. Leave granted.
2. Since both the appeals raise a common question of law, the same are being disposed of by this common judgment. For the sake of convenience, we shall refer to the facts in Criminal Appeal arising out of Special Leave Petition (Criminal) No. 2038 of 2011.
3. This appeal arises out of judgment and order of the High Court of Judicature at Madras in Writ Petition No. 4600 of 2010 dated 23rd January, 2003.
4. The first Respondent is a guarantor of the borrower to loan transaction whereby the second Respondent borrowed money from the Appellant herein. The undisputed facts are that the first Respondent created a mortgage on certain property (Land and building comprised in Re-survey No. 493/2 lying within the sub-registration district of Saidapet hereinafter referred to as the "secured asset") owned by him to secure the abovementioned loan.1
5. On 15.11.2007, a notice under Section 13(2)2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the SARFAESI Act") demanding the repayment of the loan amount along with interest within a period of sixty days was issued inter alia to the borrower as well as the guarantor (Respondent Nos. 2 and 1 herein). The said notice also advised the Respondents to comply with the demand in order to avoid further action under the Act. The first Respondent neither made the payment nor raised any objection to the said demand.
6. Consequent upon the failure of the Respondents to make the payments the Appellant herein made an application under Section 143 of the SARFAESI Act in the Court of Chief Judicial Magistrate, Chengalpattu requesting him to take possession of the secured asset and to handover the same to the Appellant.
7. Pursuant to the abovementioned application, the Chief Judicial Magistrate, Chengalpattu by his proceeding dated 14.12.2009 appointed an Advocate commissioner to take possession of the secured asset and to handover the same to the Appellant herein.
8. Challenging the legality of the proceedings dated 14.12.2009 the first Respondent approached the High Court. By the judgment under appeal, the first Respondent's writ petition came to be allowed by a Division Bench setting aside the order impugned therein.
9. The High Court recorded the submissions made before it as follows:
3. The learned Counsel appearing for the Petitioner raised two contentions, viz.:
(i) The bank cannot bypass Section 13(4) of the SARFAESI Act and invoke the provisions of Section 14. He would submit, before invoking Section 14, that notice under Section 13(4) is necessary, otherwise the provisions of appeal under Section 17 will become illusory, particularly when the proceedings under Section 14 canno........