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2013 (4) TMI 742 - HC - Customs


Issues Involved:
1. Legality and jurisdiction of the Additional Chief Metropolitan Magistrate to pass orders under Section 14 of the SARFAESI Act, 2002.
2. Validity of the office order empowering the Additional Chief Metropolitan Magistrate to handle SARFAESI Act cases.
3. Petitioner's financial difficulties and efforts to settle the debt.
4. Alternative remedy under Section 17 of the SARFAESI Act, 2002.

Issue-wise Detailed Analysis:

1. Legality and Jurisdiction of the Additional Chief Metropolitan Magistrate:
The petitioner challenged the jurisdiction of the Additional Chief Metropolitan Magistrate, Ahmedabad, to pass the order dated 17th July 2012 under Section 14 of the SARFAESI Act, 2002. The petitioner argued that only the Chief Metropolitan Magistrate or the District Magistrate is empowered to take possession of secured assets under the said section. The court examined Section 14 of the SARFAESI Act and Section 17 of the Code of Criminal Procedure, 1973, which allows the High Court to appoint an Additional Chief Metropolitan Magistrate with powers similar to those of the Chief Metropolitan Magistrate. However, it was noted that there was no specific notification authorizing the Additional Chief Metropolitan Magistrate to exercise powers under Section 14 of the SARFAESI Act.

2. Validity of the Office Order:
The petitioner also contested the office order dated 4th February 2012 issued by the Chief Metropolitan Magistrate, Ahmedabad, which empowered the Additional Chief Metropolitan Magistrate to handle applications under the SARFAESI Act. The court found that the Chief Metropolitan Magistrate could not delegate such powers without a specific notification from the High Court conferring those powers on the Additional Chief Metropolitan Magistrate. Consequently, the office order and the subsequent order passed by the Additional Chief Metropolitan Magistrate were deemed to be without jurisdiction and void ab initio.

3. Petitioner's Financial Difficulties and Efforts to Settle the Debt:
The petitioner, a woman entrepreneur, faced financial constraints due to misappropriation by her nephews and her illness. Despite efforts to settle the debt by making partial payments and requesting a waiver of accrued interest, the bank proceeded with actions under the SARFAESI Act. The court acknowledged the petitioner's financial difficulties but focused on the jurisdictional issue rather than the merits of the petitioner's financial situation.

4. Alternative Remedy under Section 17 of the SARFAESI Act:
The respondent bank argued that the petitioner had an alternative remedy under Section 17 of the SARFAESI Act, which allows for an appeal to the Debts Recovery Tribunal. However, the court held that the availability of an alternative remedy does not bar the exercise of writ jurisdiction under Article 226 of the Constitution of India, especially when the order in question is without jurisdiction. The court emphasized that the discretionary nature of writ jurisdiction allows it to intervene in cases where orders are wholly without jurisdiction.

Conclusion:
The court quashed the office order dated 4th February 2012 and the order dated 17th July 2012 passed by the Additional Chief Metropolitan Magistrate, Ahmedabad, as they were without jurisdiction. The court clarified that the respondent bank could file a fresh application under Section 14 of the SARFAESI Act in the appropriate court, which should be decided within one week without being influenced by the observations made in this judgment.

 

 

 

 

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