Is taking physical possession of a secured asset an independent and separate measure not connected to the sale of the asset?

This High Court case examines whether the act of taking physical possession of a secured asset is an independent legal action, separate from the eventual sale of that asset. The petitioners challenged an order that refused to stay a District Magistrate's direction for assistance in obtaining physical possession. The Debts Recovery Tribunal had previously set aside an auction sale and later refused to halt the possession proceedings, prompting this revision petition.

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved On : 23.11.2020
Delivered On : 01.12.2020
CORAM:
THE HONOURABLE MR.JUSTICE M.SATHYANARAYANAN
and
THE HONOURABLE MRS.JUSTICE R.HEMALATHA
CRP (PD) No.2037 of 2020 &
CMP.No.12816 of 2020

1.Shanmugadurai I
2.Gnanadeepam ...Petitioners

vs.

Authorised Officer,
ASREC (India) Limited,
Room No.3, III Floor, Wellingdon Estate,
53, Ethiraj Salai, Egmore,
Chennai 600 008. ...Respondent

Prayer: Civil Revision Petition filed under Article 227 of the Constitution of India praying to set aside the order of the Debts Recovery Tribunal-1, Chennai dated 27.10.2020 in IA.No.527 of 2020 in SA.No.142 of 2020.

For Petitioners : Mr.P.Raghunathan
for M/s.Antony L.X. Selvam

O R D E R

(Order of the Court was made by R.HEMALATHA, J.)

The petitioners have prayed for setting aside the order of the Debts Recovery Tribunal - I, Chennai dated 27.10.2020 in IA.No.527 of 2020 in SA.No.142 of 2020.

2. The case of the petitioners is that they owed Karnataka Bank a sum of Rs.31.60 Crores along with interest from 02.05.2016 (NPA date) and that the debt was assigned to the respondent Asset Reconstruction Company (ARSEC) India Limited on 27.03.2017 itself. The auction sale effected by the respondent Company on 26.10.2018 was set aside by the Debts Recovery Tribunal - I,Chennai on 07.09.2020 in SA.No.136 of 2019. In the meanwhile, the respondent Company had also moved the District Collector, Chennai for assisting in obtaining physical possession as envisaged under Section 14 of Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act), 2002. The District Magistrate vide his order dated 13.03.2020 ordered for assistance in getting physical possession which was challenged by the petitioners in SA.No.142 of 2020. The Debts Recovery Tribunal - I, Chennai in its order dated 27.10.2020 refused to stay the District Magistrate's order dated 13.03.2020, but at the same time gave specific direction to the respondent how to proceed further in the recovery proceedings. Irked by this order, the present Civil Revision Petition has been filed by the petitioners.

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