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The writ petition is dismissed by HIGH COURT OF MADHYA PRADESH AT INDORE in the case of SMT. MISHRI BAI V. SHUBH LAXMI MAHILA COOPERATIVE BANK LTD. through HON’BLE JUSTICE VIVEK RUSIA

FACTS OF THE CASE
The facts of the case are that the Respondents No.4 and 5 took financial assistance of Rs. 35,00,000/- each (two loans) from respondent No.1/Bank. The petitioners have stood as guarantors by mortgaging the property situated at EB-250 (Old No.BB-1), Sector-B, Scheme No.94, Near Bombay Hospital, Indore (M.P.) (hereinafter referred to as ”mortgaged property”) as a security against the said two loans. In the month of January 2018, the aforesaid two loan accounts were classified as None-Performing Assets (in short ‘NPA’) by the respondent No.1/Bank followed by the issuance of notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘ the SARFAESI Act). After receipt of notice under Section 13(4) of the SARFAESI Act, the petitioners approached respondent No.1/Bank showing a willingness to clear the outstanding dues of respondent No. 4 & 5 by way of the schedule prepared by the Bank. The respondent No.1/Bank did not agree with the proposal and decided to proceed under the SARFAESI Act by filing an application under Section 14 of the SARFAESI Act before respondent No.2. Vide order dated 20.09.2019, the respondent No.2 has allowed the application filed by the respondent No.1/ Bank. In compliance with the aforesaid order, on 28.01.2020, the physical possession of the mortgaged property was taken by respondent No.3 and handed over to respondent No.1/Bank.

JUDGEMENT
In this case, after taking possession of the secured assets under subsection (4) of Section 13 of the SARFAESI Act. Under sub-section (6) of Section 13 of the SARFAESI Act, all the rights in, or in relation to, the secured asset vests with the secured creditor. The secured creditor gets the right to recover all the dues, costs, charges and expenses by the sale of secured assets by way of auction. Under sub-section (10) of Section 13 of the SARFAESI Act where dues of the secured creditor are not fully satisfied with the sale proceeds, the secured creditor may file an application in the form and manner as may be prescribed to the DRT. Therefore, the borrower, as well as the guarantor, shall not be discharged from liability to repay the loan amount to the Bank unless the bank recovers the entire outstanding amount by the sale of the secured assets under the provision of the SARFAESI Act, 2002. The secured creditor is not required to approach again and again before the District Magistrate or DRT for recovery of the amount, once the order has been passed under section 14 of SARFAESI Act until unless the entire outstanding amount is recovered, the order remains valid, therefore, the Tehsildar has not committed any error of law or he does not become functus officio unless the entire outstanding amount is recovered by the Bank. It is settled law that any order passed by the Authority, quasi-judicial authority or the Court or Tribunal remains valid unless reviewed, recalled, cancelled by the same authority or court or set aside by the Higher Court/ Tribunal, thus the order passed by District Magistrate is still valid and Respondent No.1 /Bank is free to take steps thereafter until the entire outstanding amount is cleared.
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JUDGEMENT REVIEWED BY SHREYA NIDHI