Jodhpur:<\/strong> The Rajasthan High Court has held that a status quo order passed in a collateral civil dispute cannot stall recovery proceedings under the SARFAESI Act, particularly when the secured creditor was not a party to the civil suit.<\/p>\n\n\n\n Justice Sameer Jain held that the District Magistrate\u2019s role under Section 14 of the SARFAESI Act is limited to facilitating possession. The DM cannot put the Bank\u2019s recovery proceedings on hold simply because a related dispute is pending before a civil court.<\/p>\n\n\n\n The case concerned an industrial plot in RIICO Industrial Area, Pali, purchased by Kana Ram, proprietor of Laxmi Polyfab Industries, in 2016.<\/p>\n\n\n\n Kana Ram stood as a personal guarantor for a cash-credit facility of approximately \u20b97 crore and a car loan and mortgaged the property by depositing its original title deeds with PNB. After the borrower\u2019s account was declared an NPA, the Bank initiated SARFAESI proceedings and approached the District Magistrate for physical possession.<\/p>\n\n\n\n The property subsequently became the subject of a partition dispute and on which the civil court passed a status quo order concerning the property.<\/p>\n\n\n\n PNB sought to be impleaded in the civil proceedings, but its application was rejected as the Bank was held to be a non-necessary party. Despite this, the District Magistrate kept the Bank\u2019s Section 14 application pending, relying on the civil court\u2019s interim order.<\/p>\n\n\n\n Court observed that \u2018Bank Cannot Be Bound by an Order Passed in Proceedings to Which It Was Not a Party\u2019<\/p>\n\n\n\n The High Court held that since PNB was not a party to the civil proceedings, it could not be bound by the interim order passed therein.<\/p>\n\n\n\n The Court reiterated that proceedings under Section 14 SARFAESI Act are administrative and non-adjudicatory in nature. The authority handling the Bank\u2019s Section 14 application cannot decide ownership disputes or other issues pending in a separate civil case.<\/p>\n\n\n\n Finding a \u201cfundamental error of jurisdiction\u201d the Court allowed the writ petition and allowed the PNB to purpure possession proceedings.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Civil Court\u2019s Status Quo Order in Family Dispute Cannot Be Used to Stall Bank\u2019s SARFAESI recovery Proceedings against bank\u2019s secured asset, Rules Court Jodhpur: The Rajasthan High Court has held that a status quo order passed in a collateral civil dispute cannot stall recovery proceedings under the SARFAESI Act, particularly when the secured creditor was … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":9425,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wppp_is_locked":false,"_wppp_selected_plans":[],"footnotes":""},"categories":[69],"tags":[2959,2965,48,1321,1319,659,43,150,2960],"class_list":["post-9684","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rajasthan-high-court","tag-bank-recovery","tag-district-magistrate","tag-legal-news","tag-pnb","tag-punjab-national-bank","tag-rajasthan-hc","tag-rajasthan-high-court","tag-rajasthan-legal-news","tag-secured-asset"],"_links":{"self":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/comments?post=9684"}],"version-history":[{"count":1,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9684\/revisions"}],"predecessor-version":[{"id":9685,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9684\/revisions\/9685"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/media\/9425"}],"wp:attachment":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/media?parent=9684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/categories?post=9684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/tags?post=9684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Family Dispute Couldn\u2019t Stop PNB\u2019s Recovery<\/h4>\n\n\n\n
DM\u2019s Role Under Section 14 Is Administrative, Not Adjudicatory<\/h4>\n\n\n\n