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Bombay High Court: Proceedings under Section 14 of SARFAESI Act do not require compliance with the principles of natural justice

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A Division bench of the Hon’ble Bombay High Court (HC), comprising of Hon’ble Mr. Chief Justice Dipankar Datta and Hon’ble Mr. Justice M.S. Karnik, in their judgment dated 23.03.2022 in CA Manisha Mehta & Ors. v. The Board of Directors of ICICI Bank (represented by its Managing Director) & Ors., held that the language of Section 14 of SARFAESI Act is clear and unambiguous- it does not prescribe any requirement of complying with natural justice during Section 14 proceedings before CMM/DM. The HC further observed that proceedings under Section 14 of SARFAESI Act (seeking physical possession of mortgaged assets before CMM/DM) are not independent of action taken under Section 13(4) of SARFAESI Act. Hence, if a borrower has no right of hearing when the secured creditor takes possession under Section 13(4), no hearing can be granted before CMM/DM when the borrower does not surrender possession to such creditor. However, the borrower is entitled to approach the DRT, in terms of section 17 of SARFAESI Act, on initiation of action under Section 13(4) of SARFAESI Act.


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