Bombay High Court Recommends Removal Of DRT Nagpur Presiding Officer, Finds He Lacks Basic Legal Knowledge

The Bombay High Court at Nagpur on Thursday recommended that the Union government immediately remove Presiding Officer Pankaj Kumar from the Debt Recovery Tribunal (DRT), Nagpur. The bench found him unfit to continue in office and noted his wilful disobedience of the court's directions.Justices Anil S. Kilor and Raj D. Wakode, while recommending his removal, observed that Kumar was unfit to continue in the position."...the present respondent is not suitable for adorning the post of...

SARFAESI Sale Certificate Need Not Certify Physical Possession Or No Encumbrances: Calcutta High Court

The Calcutta High Court on 28 July held that a sale certificate issued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act need not record that the auctioned property is free from encumbrances or that physical possession has been delivered, as physical possession can be obtained even after issuance of the sale certificate. A Division Bench of Justices Sabyasachi Bhattacharyya and Supratim Bhattacharya modified the Civil Judge's...

Kerala High Court Refuses To Quash Cheque Dishonour Complaint Over Defect In Cause Title

The Kerala High Court has held that a cheque dishonour complaint cannot be quashed merely because the authorised representative's name appears before the complainant society's name in the cause title. Holding that such an objection was only technical, the court observed, "As held by the Hon'ble Supreme Court in Bhupesh Rathod's case (supra), such a defect, if at all, is merely technical and cannot defeat an otherwise maintainable prosecution." Justice C.S. Dias delivered the ruling while...

CJM Can Entertain Fresh SARFAESI Plea For Possession If Borrower Re-Enters Secured Asset: Kerala High Court

The Kerala High Court has ruled that a Chief Judicial Magistrate (CJM) exercising powers under Section 14 of the SARFAESI Act does not become functus officio after handing over possession of a secured asset to a secured creditor. The court held that the Magistrate can entertain a fresh request for assistance if the secured creditor is later unlawfully dispossessed of the secured asset.For context, Section 14 empowers a Chief Judicial Magistrate to assist a secured creditor in taking possession...

SARFAESI Rights Cannot Override Lessor's Right To Re-Enter Leased Land For Breach: Madras High Court

The Madras High Court on 29 July held that enforcement powers available to a secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act cannot override a lessor's contractual right to cancel a lease and resume possession of industrial land for breach of lease conditions. A Division Bench comprising Chief Justice Arvind Dharmadhikari and Justice G. Arul Murugan dismissed Karur Vysya Bank's petition challenging the State...

Housing Finance Companies Can't Invoke SARFAESI For Secured Debt Below ₹20 Lakh: Calcutta High Court

The Calcutta High Court has recently held that Tata Capital Housing Finance Ltd. as a housing finance company could not invoke the SARFAESI Act, as the secured debt was below the ₹20 lakh threshold prescribed under a Central Government notification. It accordingly set aside the enforcement measures initiated by the lender.Justice Smita Das De ruled that Tata Capital Housing Finance lacked jurisdiction to invoke the SARFAESI Act in the present case. The court observed, "In view of the above, this...

Effect of Part Payments On Dishonoured Cheques Cannot Be Decided In Revision Against Summoning Order: Delhi High Court

The Delhi High Court has ruled that whether dishonoured cheques continued to represent a legally enforceable debt after the drawer made admitted part payments is a disputed question of fact that must be decided at trial. Justice Madhu Jain observed that the issue depends on the evidence led by the parties and cannot be conclusively determined while exercising revisional jurisdiction against a summoning order. "Whether, in view of the admitted part payments, the statutory requirement under...

SARFAESI Auction Purchaser Can't Be Treated As Unauthorised Occupant Under State Eviction Law: MP High Court

The Madhya Pradesh High Court, Gwalior Bench, has dismissed a writ petition filed by the M.P. Industrial Development Corporation Ltd. (MPIDC). The court held that an auction purchaser under the SARFAESI Act cannot be treated as an unauthorised occupant under the M.P. Lok Parisar (Bedakhali) Adhiniyam, 1974 merely because disputes later arise over transfer of leasehold rights or liability for earlier dues.Justice Milind Ramesh Phadke observed, "Its possession, therefore, cannot be equated with...

NI Act Notice Not Invalid Merely Because Postal Acknowledgment Signature Differs From Cheque: Kerala High Court

The Kerala High Court has recently ruled that once a complainant shows that a legal demand notice in a cheque bounce case was sent to the accused's correct address, a trial court cannot treat the notice as invalid merely because the signature on the postal acknowledgment card differs from the signature on the dishonoured cheque.Justice A. Badharudeen said allowing such an approach would make it easy for accused persons to avoid liability. "If such a procedure is recognized in law, clever accused...

Denying Auction Purchasers Writ Remedy To Enforce S.14, SARFAESI Orders Would Be 'Travesty of Justice': Bombay High Court

The Bombay High Court has held that auction purchasers under the SARFAESI Act can invoke the writ jurisdiction to seek enforcement of orders passed by a Magistrate under Section 14 of the Act.Holding that auction purchasers have the locus to seek such relief, a division bench of Justices Manish Pitale and Shreeram V. Shirsat said refusing to entertain such petitions would erode public confidence in the rule of law."If the writ Court shuts its doors to the auction purchasers like the petitioners,...

Can A Mere Signature On A Cheque Trigger Presumption Of A Legally Enforceable Debt? Kerala High Court Explains

The Kerala High Court has recently held that signing, issuance and execution of a cheque are distinct legal concepts. It observed that the statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881 arise only when execution of the cheque is admitted or proved.Justice Mohammed Nias C.P. made the observation while setting aside a trial court judgment dismissing a money recovery suit. The Court remanded the matter for fresh consideration.“When courts say that...

Sole Proprietor's Family Members Can't Be Held Vicariously Liable U/S 141 NI Act: Calcutta High Court

The Calcutta High Court on 29 July held that vicarious liability under Section 141 of the Negotiable Instruments Act cannot be imposed on family members of a sole proprietor merely by alleging that they are partners of the proprietorship concern. Justice Uday Kumar quashed the criminal proceedings against Prakash Sharma, who was prosecuted under Sections 138 and 141 of the NI Act in connection with the dishonour of two cheques allegedly issued by S.R. Telematics. He held: "Section 141 of the...