SARFAESI Act: Impact of death of borrower/ guarantor on pending proceedings

Legal representatives cannot say that they are not covered by the definition of “borrower” because Section 2(2) of the SARFAESI Act provides a reference that the definition and expressions under the Transfer of Property Act are expressly applicable, and a “borrower” being admittedly the mortgager, his liability under the SARFAESI Act cannot be said to have been wiped off on account of his death and his legal representatives are equally bound and stand covered by the definition of the “borrower” under the SARFAESI Act

Category: Sarfaesi Act   Posted on: September 11, 2022

SARFAESI Act: Can a Writ Petition under Article 226 be filed to stall recovery proceedings?

A writ petition against the private financial institution – ARC – under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lent the money to the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable

Category: Sarfaesi Act, Sarfaesi judgements   Posted on: September 10, 2022