Notice under section 12(2) of SARFAESI Act to be dismissed if doesnot fall under jurisdiction of Jammu and Kashmir : High Court Of Jammu and Kashmir

The question as to whether a writ petition against a notice under section 12(2) of the SARFAESI Act be valid , was examined by THE HIGH COURT OF JAMMU AND KASHMIR , consisting of Justice B.S Walia in the matter of  Mr. Ind. Swift Limited Vs. UOI  [AIR 2017 J&K 95] on 16.02.2017.

The facts of the case are a notice u S.13(2) of SARFAESI was issued to  Ind Swift Lts , a company registered under the Companies Act, 1956 . The petitioner has sought issuance of a writ of certiorari and writ of mandamus against the said notice and for the respondents to adhere to the provisions applicable to the state of Jammu and Kashmir. the grievance of the petitioner is that the Bank had proceeded to issue the impugned notice despite fully knowing that SARFAESI was not applicable to the State of Jammu and Kashmir, that in view thereof, the Bank was not entitled to recover the loan from the petitioner by taking recourse to the provisions of the Act.

since part of the cause of action arose within the State of Jammu and Kashmir and the proposed action of the Bank initiated u/S. 13 (2) of the Act was going to affect the working of the petitioner Company’s unit at Samba which may have consequential effect of disturbing the entire chain of commercial activity of the petitioner Company, therefore the petitioner had challenged the notice issued by the respondent Bank along with others.

The learned Counsel for the petitioner contented that  High Court of Jammu and Kashmir held that  the SARFAESI ACT was not enforceable in the state of Jammu and Kashmir .

 The learned counsel on behalf of the respondent contended that none of the property that has been issued under section 13(2) of the SARFAESI Act are situated within the state of Jammu and kashmir and the writ petition challenging the impugned notice on the ground that the provisions of the Act were not applicable to the State of Jammu and Kashmir was wholly misconceived. The Hon’ble Supreme Court has also declared the provisions of the act legal and valid.

The High Court of J&K contended that the writ petition under the SARFAESI is dismissed as the very judgment based on which the challenged was sought is dismissed by the Hon’ble Supreme Court of India. However, the aforementioned averments are contrary to the record and the same is evident from the note to the notice impugned in the writ petition that the notice did not cover Bank/FI/ARs claim/Charge over any property whether immovable or movable including Stock/Book Debt/Plant and Machinery/Furniture/Fixture etc., whether present or future relating to the State of Jammu and Kashmir. By filing the writ petition of false averments, the petitioner has tried to over reach the process of law to obtain undue benefit of stalling recovery proceedings by the Bank running into crores of rupees of public funds. Therefore it is a fit case where the writ petition should be dismissed with costs.

By Reetasa Samal


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