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Interim Order In Writ Petition Challenging SARFAESI Proceedings Should Generally Not Be Passed Without Hearing Secured Creditors: SC

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The bench comprising Justices L. Nageswara Rao, Hemant Gupta and Ajay Rastogi opined that though the High Courts are well aware of the limitations in exercising their jurisdiction when affective alternative remedies are available, but a word of caution would still be necessary for the High Courts.

[C. Bright v. District Collector, CIVIL APPEAL NO. 3441 OF 2020]

“… Interim orders should generally not be passed without hearing the secured creditor as interim orders defeat the very purpose of expeditious recovery of public money.”

The court has upheld Kerala High Court’s decision holding that Section 14 of the SARFAESI Act, 2002 mandating the District Magistrate to deliver possession of a secured asset within 30 days, extendable to an aggregate of 60 days upon reasons recorded in writing, is a directory provision.