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2008 (8) TMI 943 - HC - Companies LawJurisdiction - Powers and jurisdiction of Chief Judicial Magistrate to deal with application u/s 14 of SARFAESI Act - Powers of the Chief Judicial Magistrates in non-metropolitan areas and in metropolitan areas - Doctrine of implied powers - constitutional validity of the section 14 - HELD THAT - We note that the Hon'ble Supreme Court has in Mardia Chemicals Ltd. etc. v. Union of India and others 2004 (4) TMI 294 - SUPREME COURT upheld the validity of the provisions of the Securitisation Act except sub section 2 of section 17 which was declared ultra vires Article 14 of the Constitution of India. Thereafter, the Act was amended by Amendment Act 30 of 2004 and requirement of deposit of 75% of the amount claimed was deleted. In view of the this, it is not possible for the petitioners to challenge the constitutional validity of the section. A reading of the statutory provisions would show that u/s 14 of the Securitisation Act, the Magistrate is only rendering assistance to the secured creditor in taking possession of the secured assets as provided u/s 13(4) of the Securitisation Act. After 60 days' notice as prescribed u/s 13(2), secured creditor can approach the Magistrate for taking possession of the land. Magistrate has no power to refuse the request, but, before taking action, he can verify whether 60 days' notice as prescribed u/s 13(2) was issued or not and whether secured asset is identifiable. Powers of the Chief Judicial Magistrates in non-metropolitan areas and Chief Metropolitan Magistrates in metropolitan areas are one and the same. Here, in this case, there is no casus omissus also. Chief Judicial Magistrates in metropolitan areas are designated as Chief Metropolitan Magistrates and vice versa mutatis-mutandis by implication and by reference to the area of jurisdiction. Chief Judicial Magistrate in a non-metropolitan area stands in the same footing as Chief Metropolitan Magistrate in metropolitan area and, their designations are used synonymously to denote the authority depending upon where one is situated, in a metropolitan area or a non-metropolitan area and, therefore, we agree with the view of the learned single Judge that in non-metropolitan areas, apart from the District Magistrate, the powers can be exercised by the Chief Judicial Magistrate also. A similar view was taken by the Madras High Court in The Dhanalakshmi Bank Limited v. Kovai Foods and Beverages 2006 (12) TMI 544 - MADRAS HIGH COURT . An express grant of statutory powers carries with it by necessary implication the authority to use all reasonable means to make such grant effective. Thus in ITO v. M.K. Mohammad Kunhi held that the Income Tax Appellate Tribunal has implied powers to grant stay, although no such power has been expressly granted to it by the Income Tax Act. Similar examples where this Court has affirmed the doctrine of implied powers are Union of India v. Paras Laminates (P) Ltd., 1990 (8) TMI 140 - SUPREME COURT , RBI v. Peerless General Finance and Investment Co. Ltd. 1996 (1) TMI 332 - SUPREME COURT , CEO Vice-Chairman, Gujarat Maritime Board v. Haji Daud Haji Harun Abu, 1996 (11) TMI 467 - SUPREME COURT , J.K.Synthetics Ltd. v. CCE 1996 (8) TMI 110 - SUPREME COURT , State of Karnataka v. Vishwabharathi House Building Coop. Society 2003 (1) TMI 707 - SUPREME COURT , etc. An overall reading of the section shows that the power of the Magistrate is to render assistance to the secured creditor in taking possession of the secured assets. He can also appoint a Commissioner for identification of the secured assets and taking possession of the secured assets etc. and if there is any resistance, ask for police assistance and take any effective steps to have possession of the secured assets taken over. Therefore, we dismiss the writ appeal, the writ petitions and the Crl. R.P.
Issues Involved:
1. Jurisdiction of Chief Judicial Magistrate under Section 14 of the Securitisation Act. 2. Constitutional validity of Section 14 of the Securitisation Act. 3. Authority of Chief Judicial Magistrate to appoint a Commissioner for taking possession of secured assets. 4. Interpretation of "Chief Metropolitan Magistrate" and "Chief Judicial Magistrate" under Section 14 of the Securitisation Act. Issue-wise Detailed Analysis: 1. Jurisdiction of Chief Judicial Magistrate under Section 14 of the Securitisation Act: The main argument by the petitioners was that the Chief Judicial Magistrate (CJM) does not have the power and jurisdiction to handle applications under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Securitisation Act). Section 14 outlines the procedural role of the Chief Metropolitan Magistrate (CMM) or District Magistrate (DM) to assist secured creditors in taking possession of secured assets. The court clarified that the CJM in non-metropolitan areas and the CMM in metropolitan areas have similar powers and functions, and these terms are used interchangeably depending on the area of jurisdiction. Therefore, the CJM can exercise the powers under Section 14 in non-metropolitan areas. 2. Constitutional validity of Section 14 of the Securitisation Act: Although the constitutional validity of Section 14 was challenged in some writ petitions, no arguments were raised regarding this issue during the proceedings. The court referenced the Supreme Court's decision in Mardia Chemicals Ltd. v. Union of India, which upheld the validity of the Securitisation Act, except for sub-section 2 of Section 17, which was declared ultra vires Article 14 of the Constitution. The court concluded that it is not possible for the petitioners to challenge the constitutional validity of Section 14. 3. Authority of Chief Judicial Magistrate to appoint a Commissioner for taking possession of secured assets: The petitioners contended that even if the CJM has jurisdiction, they cannot appoint a Commissioner to take possession of secured assets. The court held that under Section 14(2) of the Securitisation Act, the Magistrate can use necessary force, including police assistance, to take possession of secured assets. This includes the authority to appoint a Commissioner for identification and taking possession of the assets. The Magistrate's role is to assist the secured creditor in executing their rights under Section 13(4) of the Act. 4. Interpretation of "Chief Metropolitan Magistrate" and "Chief Judicial Magistrate" under Section 14 of the Securitisation Act: The court examined whether the term "Chief Metropolitan Magistrate" in Section 14 includes "Chief Judicial Magistrate" in non-metropolitan areas. The court referred to the definitions and provisions in the Code of Criminal Procedure (Cr.P.C.), which equates the powers and functions of the CJM in non-metropolitan areas to the CMM in metropolitan areas. The court emphasized that the terms are used synonymously, and the CJM in non-metropolitan areas can exercise the powers under Section 14. The court rejected the petitioners' argument that only the DM can exercise these powers in non-metropolitan areas. Conclusion: The court dismissed the writ appeal, writ petitions, and criminal revision petitions, affirming that the CJM has jurisdiction under Section 14 of the Securitisation Act, can appoint a Commissioner for taking possession of secured assets, and that the terms "Chief Metropolitan Magistrate" and "Chief Judicial Magistrate" are used interchangeably depending on the area of jurisdiction. The constitutional validity of Section 14 was upheld, and the court emphasized that the Magistrate's role is to assist the secured creditor without adjudicating disputes.
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