Challenge: MS Powerage Industries faced imminent loss of their mortgaged property due to possession proceedings initiated by Punjab National Bank (PNB) under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act).
Action Taken: Akarsh Mathur & Associates represented MS Powerage Industries, taking swift action on multiple fronts:
- Filed Interlocutory Applications (IA): Filed two IAs before the Debts Recovery Tribunal (DRT) – IA 174/2024 for early hearing and IA 176/2024 to quash the possession proceedings.
- Challenged Possession under Section 14: Argued that only the Chief Judicial Magistrate (CJM) and Chief Metropolitan Magistrate (CMM) could obtain possession under Section 14, not the bank or police, highlighting potential legal violations.
- Leveraged Pending SARFAESI Section 17A Application: Pointed out a pending application under Section 17A before the DRT Delhi, arguing it should supersede the ongoing possession proceedings.
Court Order: Recognizing the legal arguments and potential injustice, the DRT:
- Granted Urgent Hearing: Scheduled an immediate hearing on the IAs.
- Temporarily Barred Possession: Directed PNB to halt the planned possession until the hearing.
Outcome:
- Major Recovery Achieved: Through negotiations and legal representation, Akarsh Mathur & Associates secured a significant financial recovery for MS Powerage Industries from PNB.
- Property Protected: The Court order prevented PNB from taking possession of the mortgaged property, saving MS Powerage Industries from potential financial hardship and operational disruption.
- Legal Precedent Established: The case potentially sets a precedent regarding the proper application of Section 14 by banks, emphasizing the role of the CJM and CMM in obtaining possession.
Key Takeaways:
- Proactive and Multi-Pronged Approach: Combining various legal strategies and swift action secured a positive outcome for the client.
- Understanding Legal Nuances: Leveraging knowledge of SARFAESI Act provisions and jurisdiction details proved crucial.
- Client-Centric Representation: Akarsh Mathur & Associates prioritized protecting the client’s interests and achieving a favorable outcome.
