2009 (4) TMI 1014 - HC - Indian Laws

Summary

Issues Involved:
1. Delegation of Powers u/s 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
2. Nature of Powers Exercised by District Magistrate or Chief Metropolitan Magistrate u/s 14.
3. Applicability of Precedents on Delegation of Powers.

Summary:

Delegation of Powers u/s 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act:
The appellants challenged the dismissal of their writ petition by the learned Single Judge, arguing that the powers u/s 14 of the said Act must be exercised solely by the District Magistrate and not by the Sub-Divisional Magistrate. They contended that the "District Magistrate" is a Persona Designata and cannot delegate these powers. The appellants relied on several judgments, including "Hari Chand Aggarwal v. The Batala Engineering Co. Ltd and Ors." and "State of M.P. v. Bhupendra Singh," to support their argument.

Nature of Powers Exercised by District Magistrate or Chief Metropolitan Magistrate u/s 14:
The court examined the provisions of Section 14, which empower the Chief Metropolitan Magistrate or District Magistrate to assist secured creditors in taking possession of secured assets. The court noted that these powers are purely executionery in nature and do not involve any quasi-judicial functions. The court referenced the judgment in "Trade Well and Anr. v. Indian Bank and Anr." to emphasize that the CMM/DM only needs to verify territorial jurisdiction and the issuance of notice u/s 13(2) of the said Act, without any adjudication.

Applicability of Precedents on Delegation of Powers:
The court distinguished the cases cited by the appellants, noting that those cases involved quasi-judicial or drastic powers requiring application of mind, unlike the executionery powers u/s 14 of the said Act. The court referred to the judgment in "Maharashtra State Financial Corporation v. Jaycee Drugs and Pharmaceuticals Pvt. Ltd. and Ors." to support the view that the District Magistrate is not a Persona Designata in this context.

Conclusion:
The court dismissed the appeal, holding that the District Magistrate or Chief Metropolitan Magistrate can delegate powers u/s 14 of the said Act, as these powers are executionery and do not involve quasi-judicial functions. The court rejected the appellants' request for continuation of interim protection.

Final Order:
The appeal stands dismissed, and the application for continuation of interim protection is rejected.