No Bar of Appointment of Advocates as Receivers under SARFAESI Act: High Court [Read Order]

The Delhi HC held that no Bar of appointments of advocates as receivers under the Securitisation & Reconstruction of Financial Assets & Enforcement of Securities Interest Act, 2002 (also known as the SARFAESI Act).

The petitioner relied upon the judgment of the Division Bench 2002 of the Bombay HC dated 06.11.2019, passed in W.P. (C) No. 28480/2019, titled Subir Chakravarty & Ors. vs. Kotak Mahindra Bank Ltd.

The receiver has been appointed by the learned CMM vide order dated 05.12.2019 & has appointed an advocate to take possession of the secured asset & Counsel for the petitioner doesn't dispute the fact that the receiver appointed by the learned CMM has taken possession of the subject secured asset on 16.01.2020.

The petitioners contended that the appointment of an advocate as a receiver was contrary to the provisions of Section 14 (1A) of the Securitisation & Reconstruction of Financial Assets & Enforcement of Securities Interest Act, 2002 &, therefore, that part of the order passed by the learned CMM should be set aside as was done by the Bombay HC in the aforementioned matter.

Justice Rajiv Shakdher observed that after the insertion of sub-section (1A) in Section 14, the only change that has been brought about is that the District Magistrate/CMM has now the discretion to appoint even their subordinate officers as receivers.

While dismissing the petition, the Court observed that provision vests discretion in the District Magistrate/CMM & as long the discretion is exercised with due care & caution, the appointment of advocates as receivers can't be faulted.

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