Read Time: 04 minutes
Upon inquiry by the court, the NBFC’s advocate informed the high court that they were forced to take possession under this condition due to the presence of an M.P. and M.L.A. at the site along with 30 to 40 people
The Bombay High Court has recently issued a show cause notice to a borrower explaining why contempt proceedings should not be initiated against them for trying to overreach the court’s order through extra-judicial pressure.
The division bench of the high court, comprising Justice BP Colabawalla and Justice Somaashekar Sundaresan, was hearing a plea wherein the high court had directed the borrower on 13th March to hand over the secured asset to the NBFC.
The high court then scheduled the matter for compliance on 22nd March 2024. On 22nd March, the high court was informed by the NBFC that possession was handed over through a letter but with the condition that the NBFC would not dispossess the property.
Upon inquiry by the court, the NBFC’s advocate informed the high court that they were forced to take possession under this condition due to the presence of an M.P. and M.L.A. at the site along with 30 to 40 people.
The NBFC submitted that the letter was only acknowledged by them and the condition to not dispossess the property was not accepted.
The bench said that since the secured asset is already sold to the successful auction purchaser and there was no stay granted by any court and the NBFC is bound to hand over possession of the secured asset to the successful auction purchaser, ignoring the letter of the borrower.
The high court observed that such an act of borrower cannot be tolerated even for a minute.
“From what has transpired in the above matter, we find that after giving a solemn undertaking to this Court, the borrowers have sought to put extra-judicial pressure on the authorised officer of the Petitioner-NBFC. This cannot be tolerated even for a minute. We are increasingly finding that borrowers are taking the law into their own hands,” the court said.
The high court issued a contempt notice to the borrowers and directed them to explain why action should not be taken against them for attempting to overreach the orders of the court.
Case title: Cholamandalam Investment & Finance Company Ltd vs State of Maharashtra & Ors
Please Login or Register
