- (1.) JUDGEMENT In all these writ petitions, the petitioners have raised question of applicability of the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short the Act of 2002) for securitising the mortgaged assets secured for recovery of the financial assistance given by Indiabulls Housing Finance Limited (in short, IHFL) prior to the notification dated 19-9-2007 by the Central Government issued declaring IHFL a financial institution under sub clause (iv) of clause (m) of sub-section (1) of Section 2 of the Act of 2002.
(2.) THE Act of 2002 was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto, w.e.f. 17-12-2002 replacing the Ordinance notified on 21-6-2002. A secured creditor under Section 2(zd) is defined to mean any bank or financial institution or any consortium or group of banks or financial institutions and includes (i) debenture trustee appointed by any bank or financial institution; or (ii) securitisation company or reconstruction company, whether acting as such or managing a trust set up by such securitisation company or reconstruction company for the securitisation or reconstruction, as the case may be; or (iii) any other trustee holding securities on behalf of a bank or financial institution, in whose favour security interest is created for due repayment by any borrower of any financial assistance. The financial institution is defined under Section 2 (m) of the Act to mean :- "(m) "financial institution" means - (i) a public financial institution within the meaning of section 4A of the Companies Act, 1956 (1 of 1956); (ii) any institution specified by the Central Government under sub-clause (ii) of clause (h) of section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993); (iii) the International Finance Corporation established under the International Finance Corporation (Status, Immunities and Privileges) Act, 1958 (42 of 1958) (iv) any other institution or non-banking financial company as defined in clause (f) of section 45-1 of the Reserve Bank of India Act, 1934 (2 of 1934), which the Central Government may, by notification, specify as financial institution for the purposes of this Act;"
(3.) IN Writ Petition No. 28054 of 2009 Pradeep Kumar Gupta and Anr. v. State of UP and others, the petitioners were sanctioned and disbursed Rs. 24.40 lacs by IHFL on 31.3.2007 under loan agreement No. 4, and Rs. 10 lacs under loan agreement No. 2. The petitioners defaulted in payment of instalments on which a notice under Section 13(2) of the Act of 2002 was sent by to the petitioners on 22.1.2008. The District Magistrate, Agra passed an order for possession of secured asset on a petition under Section 14 on 30-1-2009. The petitioners filed a Writ Petition No. 16622 of 2009 in the High Court on the ground that the Additional District Magistrate has no power as per Division Bench judgment of Kerala High Court in the case of Ameena v. Sub Divisional Magistrate Palakkar and others AIR 2009 Ker 01. The Court was of the view that it was desirable that the District Magistrate, upon hearing the parties, will finalize the issue within two weeks and to take into consideration of the questions at the time of passing of the order. A correction application to change the description of the Additional District Magistrate as Additional Collector/Additional District Magistrate (FandR) Agra instead of District Magistrate is pending. The District Magistrate has, by his order dated 4-5-2009, rejected the objections on the ground that under Section 14-A (3) of the U.P. Land Revenue Act, an Additional Collector can exercise such powers and discharge such duties of a Collector in such cases or class of cases as the Collector concerned may direct. He has allowed the proceedings to continue in the Court of Additional District Magistrate (F/R).;