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TMI Blog2008 (4) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... ecurity Interest Act, 2002 ( NPA Act for brevity's sake). The applications are rejected by learned CJM with common line of reasons and we quote the observations: Therefore, by this application, Petitioner has prayed for assistance in taking possession of secured assets. Heard learned Counsel for the applicant. He relied on 2007 (1) Bom. C.R. (Cri.) 783. On perusal of judgment cited it is seen that there was decree passed by D.R.T. in favour of said Petitioner, who had prayed for such assistance in taking possession of secured assets by filing application before C.M.M. Admittedly, in our case nowhere Petitioner has come with the case that, he has obtained decree in his favour from competent court D.R.T. and in execution of same he is in need of assistance of this criminal Court. 4. Because of the writ petitions filed by the petitioner, we are required to consider the issue; Whether, a creditor requesting assistance under Section 14(1) of the NPA Act is required to be armed with a decree for recovery of dues from the borrower, from competent court or D.R.T.? It appears that the judgment rendered by Division Bench at Bombay of this High Court, in the matter of Trade W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction of CMM/DM before whom application under Section 14 is made. The bank and financial institution shall also consider before approaching CMM/DM for an order under Section 14 of the NPA act, whether Section 13 of the NPA Act excludes the application of Sections 13 and 14 thereof to the case on hand. (2). CMM/DM acting under Section 14 of the NPA Act is not required to give notice either to the borrower or to the 3rd party. (3). He has to only verify from the bank or financial institution whether notice under Section 13(2) of the NPA Act is given or not and whether the secured assets fall within his jurisdiction. There is no adjudication of any kind at that stage. (4). It is only if the above conditions are not fulfilled that the CMM/DM can refuse to pass an order under Section 14 of the NPA Act by recording that the above conditions are not fulfilled. If these two conditions are fulfilled, he cannot refuse to pass an order under Section 14. Even on going through all ten conclusions, we do not find the court laying down ratio as understood by learned CJM, Aurangabad. In fact, in taking a view as recorded by learned CJM, Aurangabad, he has practically set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial institutions to realise long term assets, manage problem of liquidity asset liability mismataches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction. Section 13, which is regarding enforcement of security interest and more particularly Sub-section (1) of it, reads thus; 13. Enforcement of security interest: (1). Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882 (4 of 1982), any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or tribunal, by such creditor in accordance with the provisions of this Act. Sub-section (2) of Section 13 of the Act, requires the creditor to give a notice to borrower whose debt is classified by the secured creditor as NPA, inviting the borrower to discharge, in full; his liabilities to the secured creditor, within sixty days from the date of notice and failing which, the secured creditor is held entitled to exercise all or any of the rights under Sub-section (4). Sub-section (3) requires the secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer a cause of action to approach DRT under Section 17. It is only after the secured creditor takes steps under Section 13(4) that the borrower can approach DRT, by an appeal against such an action by secured creditor. On going through the text of the NPA Act, it is evident that no judicial forum comes into picture till that stage. 7. We feel that the statement of objects and reasons in enacting the NPA Act and the provisions quoted hereinabove, are self-eloquent and clearly indicate that the secured creditor is not required to obtain a decree from a competent court/DRT, before being entitled to take steps as permitted by NPA Act for the purpose of enforcement of recovery, by taking steps against the secured assets. We must, therefore, say that the learned CJM, Aurangabad, was completely on wrong foot in observing that the assistance cannot be sought unless there is a decree in favour the secured creditor. In fact, we may also usefully reproduce Sub-section (1) of Section 14 and more particularly its opening part, just to confirm that even this Sub-section does not speak of requirement of decree in favour of secured creditor. Chief Metropolitan Magistrate or District Magis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Magistrate . There is no reference to Chief Judicial Magistrate . We have, therefore, posed a question to Advocate Shri Gangakhedkar for the Petitioner that Section indicates assistance from CMM and DM, within whose territorial limits the secured assets or documents relating thereto are situated at the time secured creditor desires taking possession of the secured assets. There is no reference to the CJM. We have, therefore, expressed that it would be the CMM, so far as metropolitan area is concerned and where there is a CMM appointed and posted. So far as other area is concerned, there being no post and appointment of CMM, secured creditor desirous of availing benefit of Section 14(1), will have to approach DM. Advocate Shri Gangakhedkar has not been able to point out any provision in the NPA Act, or Cr.P.C. which will compel us to accept his proposition that, although words used in the section are CMM/DM , sofar as area beyond metropolitan area is concerned, the words CMM can be read as CJM . The legislature does not seem to have intended to entrust the function to CJM outside the metropolitan area, although the function is entrusted to CMM, a judicial officer, in metr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the request of secured creditor for assistance to take possession of secured assets, is evident from the conclusions at serial Nos. 1 to 4 drawn by the Division Bench at Bombay in the matter of Trade Well (supra) and which we have already reproduced in earlier part of this judgment. To state in brief, CMM or DM acting under Section 14, will not be required to serve a notice upon the borrower or a third party. But, the authority will have to verify from the bank/financial institution/secured creditor that the notice under Section 13(2) of the NPA Act is served; that the secured assets are within territorial jurisdiction of the authority concerned; that the borrower has not discharged liability as indicated in the notice under Section 13(2) and that the secured creditor has communicated reasons for rejection of representation, if any, of the borrower. If all these things are fulfilled by the secured creditor, CMM/DM will not be in a position to refuse assistance under Section 14(1) to the secured creditor. 11. We, therefore, dispose of the writ petitions, by confirming refusal by CJM, Aurangabad, of assistance under Section 14(1), not because the petitioner-creditor was not ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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