ASREC (India) Ltd Vs State of Punjab And Ors (Punjab and Haryana High Court)
The writ petition was filed under Articles 226 and 227 of the Constitution challenging an order dated 26.05.2024 passed by the Additional District Magistrate, Ludhiana, whereby an application under Section 14 of the SARFAESI Act, 2002 was dismissed. The petitioner sought quashing of the impugned order and a direction to the authority to pass an order under Section 14 without entering into any adjudicatory process and within a time-bound manner.
The case arose from credit facilities amounting to ₹7,97,24,000/- availed by the borrower from Allahabad Bank, secured by mortgage of immovable property. Due to failure to maintain financial discipline, the account was declared a Non-Performing Asset on 26.06.2013, and SARFAESI measures were initiated, including issuance of notices under Sections 13(2) and 13(4). Proceedings before the Debt Recovery Tribunal culminated in an order dated 12.07.2017 upholding the secured creditor’s rights and issuance of a recovery certificate, which remained unchallenged.
Subsequently, under an Assignment Agreement dated 27.02.2018, the loan and financial asset were assigned to the petitioner, who claimed to have stepped into the shoes of the original lender. On this basis, the petitioner moved an application under Section 14 of the SARFAESI Act for assistance in taking possession of the secured asset. The application was dismissed by the Additional District Magistrate on the grounds that earlier applications had been rejected, certain prohibitory orders existed, and, crucially, that the Assignment Deed relied upon by the petitioner had not yet been approved by the competent forums, including the Debt Recovery Tribunal.
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