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Court of the Presiding Officer

Date: 22.09.2023

Present:

Sh. Akshat Kulshrestha, Ld. Counsel for the Applicant

Order on IA no. 1524/2023

In the present matter an IA no. 15234/2023 was filed by SA

applicant on 26.07.2023 seeking stay on the fact effect and

operation of order dated 16.05.2022 passed by Ld. CMM,

Jaipur Metropolitan, Jaipur-II through which the Court has

authorized the Authorized Officer of the Bank to take physical

possession the subject mortgaged property with the help of

local police authority and Ld. Counsel argued that the said

order is against the provisions of Section 14(1A) of the Act of

2002.

Reply to the said IA was filed by respondent bank on

26.07.2023 vide Dy. No. 1086.

Ld. Counsel for the Respondent bank opposed the prayer and

Bank has enclosed the copy of order dated 18.11.2022 passed

by this Tribunal in SA no. 441/2022.

Heard arguments and perused the Judgments filed by Ld.

counsel for the Respondent Bank, carefully and also perused

Section 14 of the Act of 2002.

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As per provisions contained in Section 14(1A) of SARFAESI

Act of 2002, following are the Powers, given to District

Magistrate/Ld. CMM –

“14. Chief Metropolitan Magistrate or District Magistrate

to assist secure creditor in taking possession of secured

asset. – xxx xxx

xxx

(1A) The District Magistrate or the Chief Metropolitan

Magistrate may authorize any officer subordinate to him,

– (i) To take possession of such assets and documents

relating thereto; and (ii) To forward such assets and

documents to the secured creditor.”

So, from the bare perusal of abovesaid provision, it is clear

that the District Magistrate/CMM, either can take possession

or can authorized to their subordinate and this amendment

was brought in the year 2013, but the Judgement as referred

by Ld. counsel for the Respondent Bank do have, a reference

of challenge of Order U/s 14, passed by District Magistrate on

10.11.2010 and it seems that the main objection taken by the

borrower as petitioner was that, before passing Order U/s 14,

no opportunity was granted of being heard.

Ld. counsel for SA Applicant filed Judgement of Hon’ble High

Court of Punjab & Haryana dt. 11.03.2022, passed in the

matter of Shriram Housing Finance Ltd. Vs State of Haryana

& Ors. and Judgement of Hon’ble Apex Court dt. 27.07.2022,

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in the matter of M/s R.D. Jain & Comp. Vs Capital First Ltd.

& Ors. on 01.11.2021, vide D.No. 8731.

Ld. counsel for SA Applicant referred paras no. 8.1 argued

that as per latest verdict of Hon’ble Apex Court, provision of

Section 14 (1-A) of SARFAESI Act of 2002, is to be followed.

Heard arguments and perused the Judgement of Hon’ble Apex

Court and Hon’ble High Court very carefully. Para No. 8.1 of

the Judgement, is being reproduced hereunder for ready

reference –

“8.1 However, for taking physical possession of the secured

assets in terms of Section 14(1) of the SARFAESI Act, the

secured creditor is obliged to approach the CMM/DM by way of

a written application requesting for taking possession of the

secured assets and documents relating thereto and for being

forwarded to it (secured creditor) for further action. The

statutory obligation enjoined upon the CMM/DM is to

immediately move into action after receipt of a written

application under Section 14(1) of the SARFAESI Act from the

secured creditor for that purpose. As soon as such an

application is received, the CMM/DM is expected to pass

an order after verification of compliance of all formalities by the

secured creditor referred to in the proviso in Section 14(1) of the

SARFAESI Act and after being satisfied in that regard, to take

possession of the secured assets and documents relating

thereto and to forward the same to the secured creditor at the

earliest opportunity. As mandated by Section 14 of the

SARFAESI Act, the CMM/DM has to act within the stipulated

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time limit and pass a suitable order for the purpose of taking

possession of the secured assets within a period of 30 days

from the date of application which can be extended for such

further period but not exceeding in the aggregate, sixty days.

Thus, the powers exercised by the CMM/DM is a ministerial

act. He cannot brook delay. Time is of the essence. This is the

spirit of the special enactment. As observed and held by this

Court in the case of NKGSB Cooperative Bank Ltd. (supra), the

step taken by the CMM/DM while taking possession of the

secured assets and documents relating thereto is a ministerial

step. It could be taken by the CMM/DM himself/herself or

through any officer subordinate to him/her, including the

advocate commissioner who is considered as an officer of

his/her court. Section 14 does not oblige the CMM/DM to go

personally and take possession of the secured assets and

documents relating thereto. Thus, we reiterate that the step to

be taken by the CMM/DM under Section 14 of the SARFAESI

Act, is a ministerial step. While disposing of the application

under Section 14 of the SARFAESI Act, no element of quasi-

judicial function or application of mind would require. The

Magistrate has to adjudicate and decide the correctness of the

information given in the application and nothing more.

Therefore, Section 14 does not involve an adjudicatory process

qua points raised by the borrower against the secured creditor

taking possession of secured assets.”

So, after having careful perusal of Judgment of Hon’ble Apex

Court dt. 27.07.2022, I am of the view that the provision of

Section 14(1-A) of SARFAESI Act of 2002, is required to be

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following strictly, and as also observed in para 8.1 of the

Judgement, possession of secured assets can be taken by

Chief Metropolitan Magistrate/ District Magistrate of through

any officer subordinate to him/her, including the advocate

commissioner who is considered as an officer of his/her

Court.

Accordingly, in my considered opinion, Authorized Officer of

the Bank , is not entitled to take possession of secured assets,

in the light of Order dt. 01.08.2022, passed by Distt.

Magistrate.

Respondent Bank is at liberty to get fresh Order U/s 14 of the

Act of 2002, strictly, in the line of provisions as contained in

Section 14 (1-A) of the Act of 2002.

With these observations, IA No. 1524/2023 stands disposed

of.

Put up before Registrar for completion of pleadings on

18.10.2023, Interim Relief shall continue till further orders.

Vivek Saxena
Presiding Officer
DRT, Jaipur

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