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2026 DAILYLAW 44684 (CAL)

SHALIMA SEKH AND ANR. v. UNION OF INDIA AND ORS.

WPA/27539/2026 · 2026-09-29

Partha Sarathi Chatterjee

body2026

Judgment text

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IN THE HIGH COURT AT CALCUTTA (CONSTITUTIONAL WRIT JURISDICTION) APPELLATE SIDE Present : The Hon’ble Justice Partha Sarathi Chatterjee WPA 27539 of 2026 Shalima Sekh @ Selima Sekh & Anr. Vs. Union of India & Ors. For the petitioners : Md. Nure Zaman. For respondent nos. 2 to 6 : Mr. Sayak Ranjan Ganguly Ms. Srijani Ghosh Ms. Simrin Hussain. Heard on : 29.09.2026 Judgment on : 29.09.2026 Partha Sarathi Chatterjee, J.:- 1. Affidavit-of-service filed in Court today is taken on record. 2. Invoking the extraordinary jurisdiction of this Court by way of the present writ petition, the petitioners have called in question the legality and validity of the measures initiated by the Secured Creditor, being the respondent no. 2 herein, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI Act”). The 2 petitioners have, in particular, assailed the legality of the notices issued by the respondent no. 2 under Sections 13(2) and 13(4) of the SARFAESI Act, as also the order passed by the learned Additional Chief Judicial Magistrate, Kalna, Purba Medinipur, under Section 14 of the SARFAESI Act in respect of the secured assets. 3. Mr. Nure Zaman, learned Advocate appearing for the petitioners, submits that the petitioners had availed of a house-building loan to the tune of Rs.6,34,553/- on 14th August, 2016 from the Burdwan Branch of the respondent no. 2. It is submitted that, owing to certain difficulties faced by the petitioners and for reasons beyond their control, they could not adhere to the stipulated repayment schedule. Subsequently, the outstanding dues were settled by way of a one-time payment of Rs.3,00,000/- on 31st March, 2022. Notwithstanding such settlement, the respondent no. 2 proceeded to initiate measures under the SARFAESI Act in respect of the secured asset, being the residential house of the petitioners. 4. Mr. Zaman further submits that the respondent no. 2 is a housing finance company and a non-banking financial company within the meaning of clause (f) of Section 45-I of the Reserve Bank of India Act, 1934 (hereinafter referred to as “the 1934 Act”). According to him, in view of the notification dated 12th February, 2021, the respondent no. 2 could not have initiated any measure under the SARFAESI Act in respect of the secured asset, the amount of the loan being below the prescribed threshold of rupees twenty lakhs. It is, therefore, contended that all measures initiated by the respondent no. 2 under the SARFAESI Act and the consequential steps taken pursuant thereto, including the issuance of notices under Sections 13(2) and 13(4) of the SARFAESI Act and the order passed by the learned Additional Chief Judicial Magistrate, Kalna, Purba Medinipur, under Section 14 3 thereof, are wholly unsustainable in law. Mr. Zaman, accordingly, prays for quashing of the aforesaid notices as well as the order passed under Section 14 of the SARFAESI Act. 5. In support of his contention, Mr. Zaman has placed reliance upon the notification dated 12th February, 2021, as also the list of non-banking financial companies published by the Reserve Bank of India (in short, “RBI”), to demonstrate that the name of the respondent no. 2 finds place at serial no. 52 thereof. To invigorate his submission, he cites an unreported decision by the Hon’ble Division Bench of this Court in FMA 161 of 2026 (Piramal Capital & Housing Finance Limited & Ors. vs. Golam Sabir & Ors.). 6. In rebuttal, Mr. Ganguly, learned Advocate representing the respondent nos. 2 to 6, denies and disputes the contentions advanced on behalf of the petitioners by Mr. Zaman. Referring to Section 2(1)(m)(iv) of the SARFAESI Act, he submits that the expression “financial institution” includes “any other institution” or “non- banking financial companies, as defined in clause (f) of Section 45-I of the 1934 Act”, which the Central Government may, by notification, specify as a financial institution for the purposes of the said Act. He further submits that the respondent no. 2 falls within the expression “any other institution” as contemplated under the aforesaid provision. It is, therefore, contended that, for the respondent no. 2 to avail itself of the provisions of the SARFAESI Act, a notification to that effect by the Central Government is necessary. 7. Mr. Ganguly, placing on record the Certificate of Registration of the respondent no. 2, submits that the respondent no. 2 was registered under Section 29A of the National Housing Bank Act, 1987 (in short, “the 1987 Act”). Referring to 4 the notification dated 13th August, 2019 issued by the Reserve Bank of India, he further submits that, by virtue of the said notification, Housing Finance Companies (HFCs) were brought within the regulatory framework applicable to Non-Banking Financial Companies (NBFCs) and were henceforth to be treated as one of the categories of NBFCs for regulatory purposes. He further submits that the respondent no. 2 has accordingly been classified as a Non-Banking Financial Company for regulatory purposes and, therefore, its business and affairs are subject to the regulatory framework and guidelines issued by the Reserve Bank of India. According to Mr. Ganguly, it is for this reason that the name of the respondent no. 2 finds mention at serial no. 52 in the list of Non-Banking Financial Companies published by the Reserve Bank of India. 8. Mr. Ganguly places reliance upon the notification dated 17th June, 2021 issued by the Department of Financial Services, Ministry of Finance, Government of India, and submits that, by virtue of the said notification, issued in exercise of the powers conferred by sub-clause (iv) of clause (m) of sub-section (1) of Section 2 of the SARFAESI Act and in supersession of certain earlier notifications, the Central Government has specified housing finance companies registered under sub-section (5) of Section 29A of the National Housing Bank Act, 1987, having assets of rupees one hundred crores and above, as financial institutions for the purposes of the said Act. It is, therefore, contended that the respondent no. 2, being a housing finance company satisfying the conditions stipulated in the said notification, is competent to initiate measures in respect of the secured asset under the SARFAESI Act. The notification dated 17th June, 2021 is taken on record. 5 9. Mr. Ganguly submits that the notification dated 24th February, 2020, as subsequently amended by the notification dated 12th February, 2021, whereby the threshold limit was ultimately prescribed at rupees twenty lakhs and above, has no application to the respondent no. 2, since the respondent no. 2 does not fall within the ambit of a non-banking financial company as defined under clause (f) of Section 45-I of the 1934 Act. He contends that the threshold limit of rupees twenty lakhs is applicable only to such NBFCs as are covered by clause (f) of Section 45-I of the 1934 Act. In the aforesaid conspectus of facts and circumstances, Mr. Ganguly submits that the respondent no. 2 is competent to initiate measures under the SARFAESI Act and, consequently, the measures taken by the Secured Creditor, including the issuance of notices under Sections 13(2) and 13(4) and the order passed under Section 14 of the SARFAESI Act, are valid and sustainable in law. He further contends that the petitioners have invoked the writ jurisdiction of this Court without availing themselves of the efficacious alternative statutory remedy available under the SARFAESI Act and, accordingly, the present writ petition is not maintainable. 10. Heard the learned Advocates appearing for both the parties and perused the materials on record. 11. Therefore, having regard to the submissions advanced by the learned Advocates appearing for the respective parties, it transpires that this Court is called upon to determine, in the present writ petition, whether the notification dated 24th February, 2020, as subsequently amended by the notification dated 12th February, 2021, is applicable to the respondent no. 2 and, if so, whether the respondent no. 2 is competent to initiate measures under the SARFAESI Act in respect of a loan 6 where the amount involved is below the threshold limit of rupees twenty lakhs. This Court is also required to consider whether the notices issued by the respondent no. 2 under Sections 13(2) and 13(4) of the SARFAESI Act, as also the order passed under Section 14 thereof, are sustainable in law. 12. Undisputedly, the respondent no. 2 was registered under Section 29A of the 1987 Act. It would be apposite to note that sub-clause (iv) of clause (m) of sub- section (1) of Section 2 of the SARFAESI Act contemplates two categories of financial institutions, namely, “any other institution” and “non-banking financial companies, as defined in clause (f) of Section 45-I of the 1934 Act”, which the Central Government may, by notification, specify as financial institutions for the purposes of the said Act. 13. As noticed hereinbefore, by virtue of the notification dated 17th June, 2021, housing finance companies registered under sub-section (5) of Section 29A of the 1987 Act and having assets of rupees one hundred crores and above were specified as financial institutions for the purposes of the said Act. Thus, upon satisfying the conditions stipulated in the said notification, the respondent no. 2 can be regarded as a financial institution within the meaning of sub-clause (iv) of clause (m) of sub- section (1) of Section 2 of the SARFAESI Act. Consequently, the notification dated 24th February, 2020, as subsequently amended by the notification dated 12th February, 2021, whereby the threshold limit in respect of non-banking financial companies, as defined under clause (f) of Section 45-I of the 1934 Act, was ultimately fixed at rupees twenty lakhs and above, has no application to the respondent no. 2. 7 14. There can be no manner of doubt that the judgment dated 9th April, 2026 passed by the Hon’ble Division Bench of this Court in FMA 161 of 2026 (Piramal Capital & Housing Finance Limited & Ors. vs. Golam Sabir & Ors.) constitutes a binding precedent. However, the said judgment does not come to the aid of the petitioners in the facts and circumstances of the present case. As the threshold limit of rupees twenty lakhs and above, prescribed under the notification dated 12th February, 2021, has no application to the respondent no. 2 herein, the contention of the petitioners that the measures initiated by the respondent no. 2 in respect of the secured asset are without authority of law cannot be sustained. Consequently, the challenge to the notices issued under Sections 13(2) and 13(4) of the SARFAESI Act, as also to the order passed by the learned Additional Chief Judicial Magistrate, Kalna, Purba Medinipur, under Section 14 of the SARFAESI Act, is devoid of merit. 15. Accordingly, the writ petition being WPA 27539 of 2026 stands dismissed. 16. However, it is clarified that this order shall not preclude the petitioners from approaching the appropriate forum for redressal of their grievances in accordance with law, and the petitioners shall be at liberty to raise all issues before such forum. 17. Since no affidavits have been filed by the respondents, the allegations made in the writ petition shall be deemed to have not been admitted by the respondents. 18. There shall be no order as to costs. 19. Let urgent Photostat certified copy of this order be made available to the parties, if applied for, upon compliance of usual formalities. (Partha Sarathi Chatterjee, J.)