In a major reprieve for banks and financial institutions, the Bombay high court, last week, directed all chief metropolitan magistrates (CMMs) and district magistrates (DMs) across the state to pass final orders within two months of receiving pleas seeking possession of secured assets.
The directive is expected to speed up the recovery of outstanding dues to banks and financial institutions through the sale of secured assets. The division bench of justice DY Chandrachud and justice Anoop Mohta has also directed all DMs (essentially district collectors) to maintain a record of applications received from banks and financial institutions seeking administrative assistance in taking possession of secured assets.
The bench took a stern note of the fact that more than Rs2.70 crores due to Saraswat Co-operative Bank was held up for more than four years because of an apathetic approach of the collector, Sangli.
The bank had moved the high court after the collector failed to pass a final order on six of its pleas contending the collector was not following any procedure for disposing of applications under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Under the proviso, the CMM or DM is required to take possession of the secured asset and hand it to the creditor for realisation of their outstanding dues.
Referring to an earlier ruling of the high court, the bench headed by justice Chandrachud, said the CMMs and the DMs are only required to ensure that a statutory notice is issued to the borrower and the secured asset falls within his jurisdiction, and that they are not required to adjudicate merits of the matter.
The court directed the collector, Sangli to decide all applications filed by Saraswat Co-operative Bank within a month.