Mumbai:  The Bombay High Court has directed all the Collectors and District Magistrates across the state to dispose of within two months the pending applications of various banks seeking possession of the secured assets of defaulters for recovery of loans.

Saraswat Bank had sought directions to Collector and Magistrate in Sangli district of the state to provide administrative assistance under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act for taking possession of secured assets of defaulters.

Justice Anoop Mohta and Justice D Y Chandrachud also directed the Sangli Collector to expeditiously conclude all such pending applications within a period of one month.

"We also direct that in future, all the Collectors and District Magistrates shall maintain a record of such applications and endeavour to conclude the hearing and pass final orders thereon within two months", the bench observed.

Accordingly, the judges disposed of the petition filed by Saraswat Bank alleging failure of the Sangli Collector to adhere to the law in relation to the exercise of owers under section 14 of the Securitisation Act.

Saraswat Bank contended that six applications, some of them for several years, are pending with the office of the District Collector and despite this, the collector has not initiated any expeditious steps under Section 14. As a result, recovery of a large amount of Rs 2.70 crore has been held up.

The bank pleaded its Deputy General Manager of Sangli branch had personally met the Sangli Collector who allegedly declined to render administrative assistance as required under the law. The bank further argued that the Sangli Collector was not following procedures in law in disposing of applications under section 14 of the act. No dates are fixed for attendance of bank officers and no communication is furnished regarding the status of applications.

On many occasions, the bank argued, the defaulters were allowed to intervene and their applications were entertained. In several cases, the proceedings were found to be missing and no information could be provided by the staff of collector's office, the high court was told.

On July 20, the High Court after considering the record was prima facie of the view that the conduct of the one Collector was in clear breach and disregard of law.

The court observed the IAS officer was duty bound to act in accordance with the letter and spirit of the legislation under section 14 of Securitisation Act. The respondents also filed replies justifying their acts in some cases.

However, the HC noted that it would not go into all the cases cited by them. "It would suffice to note that in several such cases, the Sangli Collector had not taken action for nearly three years. In certain cases, action was not taken merely on the ground that a suit was pending.